Seller Beware

/p> Judging by the excited buzz of hundreds of women seated around the long catwalk in the glitzy ballroom, you’d almost expect Naomi Campbell to come striding out in Valentino. But here, on this runway in Toronto’s Fairmont Royal York Hotel, you won’t find supermodels — only superwomen.

This is the national conference and 20th anniversary of Weekenders, the home-party clothing company that’s the Tupperware of the fashion world. Tonight the born-in-Canada company will unveil its new line of cotton-polyester separates to 1,100 women who have come from St. John’s, Victoria, Yellowknife and everywhere in between to cheer collectively at the mere mention of “stretch denim knit!” or “detachable hood!” As the models make their grand appearance, you notice they’re regular-looking women in all sizes, as you might see in the mall — except that every one of them is grinning to beat the band.

And no wonder. These are the top-selling salespeople — oops, “independent wardrobe coordinators” — who have built successful careers, one home party and one new sales recruit at a time. Even company president Lia Keeping started at the bottom, joining Weekenders in 1985 for grocery money when her children were two and four. As tonight’s emcee, she tells the cheering audience, “The women of Weekenders are royalty!”

And indeed, some of them are pulling down queenly six-figure incomes. But many women in this audience are making a barely subsistent $5,000 to $10,000 a year from Weekenders. Absent tonight, however, are the hundreds of women who tried to make a go of it and gave up. Weekenders is a direct sales company like Discovery Toys, The Pampered Chef, Mary Kay and a host of others. In all of them, salespeople deal directly with customers without the need for stores. And in the world of direct sales, nothing is guaranteed. Income is based largely on commissions from how much merchandise you sell or how many new salespeople you recruit. For every rags-to-riches story, there’s a sad tale of a dropout who could barely recoup her start-up costs.

Here’s a look at four of the best-known direct sales companies in Canada, along with personal tales from the triumphant and the fallen.

Weekenders Canada
weekenders.ca
(905) 886-5995

The concept: “Clothes with a context.” A twice-yearly line of 25 pieces from $35 to $114.

Signature product: Jacket that folds into a tote bag ($114).

Background: Founded in Toronto in 1984. About 5,500 salespeople in Canada with sales of $50 million.

The promise: “Earn as much as you want, the way you want.” Incentives include jewellery and vacations.

Start-up costs: Minimum $150, but $299 “entry pak” is recommended.

Success story: With a grade 12 education and a background as a customer service rep in a bank, Debbie Webber of Newmarket, Ont., has parlayed her Weekenders business into a marketing juggernaut. She heads up a team of 220 women with total sales last year of $3.2 million, from which she personally grossed well over $100,000.

Webber had never even seen the clothes when she first heard about Weekenders in 1987. She saw the company as an opportunity to run her own business while being a full-time mom to her daughters, then five and 11. “I wanted to work, but I also wanted to have the kids home for lunch, volunteer at their schools and bake cookies,” she says.

It was tough at first. “I’m a very, very shy person; to stand in front of a group of three or four ladies was nerve-racking,” Webber recalls. But her confidence grew along with the number of customers and potential recruits.

Downfall: Heather Gamblin also got involved in 1987, shortly before she was pregnant with her second child. But it was difficult going out to do parties evenings and weekends, when her family needed her. And she didn’t like the financial insecurity: “You could have a party of eight people with $900 in sales, or a party of 15 people with $100 in sales — you never knew.”

In her best years Gamblin did one party a week and averaged annual commissions of $5,000. When she moved from Newmarket to Guelph, Ont., she had trouble serving her old customers and couldn’t find many new ones. “People are getting partied out, and they only have so much money to go around,” she says. “And Weekenders clothes are expensive.” She gave up in 2001, when carpal tunnel prevented her from carrying racks of clothes, and is now the manager of a retail store. “At this point in my life, I like knowing exactly how much money I’m going to make each week.”

Discovery Toys
discoverytoysinc.com
1-800-341-TOYS

The concept: “Making a difference, one child at a time.” About 200 toys, games, books and software, $3.99 to $149.

Signature product: Measure Up Cups ($15.99).

Background: Began in California in 1978, came to Canada in 1985. More than 30,000 salespeople in North America. Won’t reveal sales figures.

The promise: “ Satisfaction of a job well done. Recognition, awards, incentives. Earn fabulous vacations.”

Start-up costs: $229 for the starter kit, rebated if you meet certain criteria.

Success story: Suzanne DeRome of Ile Perrot, Que., joined Discovery Toys to get discounted toys for her six-month-old son. She certainly did not want to sell anything. “I’m not a salesperson and I don’t like salespeople,” she says.

But when DeRome went back to her part-time work as a registered nurse, she hated the hours. After her fourth child, she decided to try selling Discovery Toys. “I called everybody I knew and told them I had a goal — to be promoted to management level within two months. They could help me either by booking a party or joining my team.”

It worked. Now, 11 years later, DeRome heads a team of 680. Last year she netted over $40,000 — not bad for a half-time job for which she usually works 15 hours a week.

Downfall: Mary Blanchard found Discovery Toys a good excuse to get out and socialize, but not an easy way to make money. “The cold calls were brutal,” says the mother of three boys in Hamilton, Ont. “If people were iffy, I wouldn’t call back. I didn’t have the knack or the tact to push them or to tactfully convince them that hosting a party was a good idea.”

The first year Blanchard made $4,000 within a couple of months, but in year two, after she’d tapped out her friends and neighbours, she couldn’t make more than $1,000. The monthly motivational meetings didn’t appeal to her. “The woman who recruited me seemed genuinely thrilled by the product. I could honestly say it was a good product, but I’d think, ‘How can you get so excited? It’s just toys.’” In the end Blanchard was left with unsold merchandise, which she gave away. “This business was not for me.”

The Pampered Chef
pamperedchef.com
1-800-342-2433

The concept: “The kitchen store that comes to your door.” 150 kitchen tools and cookware, $2 to $150.
Signature product: Stoneware, $20 to $60.

Background: Started in Illinois in 1980, came to Canada 1996. Almost 4,000 salespeople here with sales of $50 million.

The promise: “Are you working full-time, yet wish you could afford to stay home with your kids?... Does an unlimited income potential excite you?” Incentive trips and jewellery.

Start-up costs: $150.

Success story: Three weeks before Sue-Ann MacCara of North Vancouver had her second child, she shifted her focus to the home front. One problem: MacCara couldn’t stand cooking. That’s what attracted her to The Pampered Chef in 1996. She also recognized the marketing opportunity; her mother had become wealthy from selling Tupperware.

MacCara’s parties, which involve preparing dishes using Pampered Chef products, rarely go perfectly. “I’ve splashed tomatoes on my guests, forgotten ingredients,” she says. Once, a few weeks after her daughter was born, her milk let down in the middle of her presentation. “Women are so forgiving because we can all relate.”

These days, MacCara has a team of 100 and makes just under $90,000 a year working 30 hours a week. She doesn’t miss the corporate life. “This is my own corporate world — strategizing, training, public speaking, motivating, customer service. The only difference is I’m not in a three-piece suit.”

Downfall: Marilyn Browning started off beautifully. In 1998 she had no trouble booking her first half-dozen parties, and sales were encouraging. But she felt such gratitude for friends and family who hosted parties that she refused to let them pay for the ingredients she needed. “I often brought my own, so I was out-of-pocket before I started,” she says.

She began to do parties farther afield, sometimes 70 km from home. It meant leaving her husband and four kids, aged eight to 15, at dinnertime to prepare dishes for strangers. “I started thinking, ‘This is ridiculous.’”

She found the stoneware heavy to lug in and out of her car and worried about breakage. But she liked The Pampered Chef line and spent much of her commissions on new products, before packing it in after two years. “I couldn’t get beyond the idea that I was taking advantage of people,” says Browning, who has gone back to full-time teaching in an elementary school.

Mary Kay Cosmetics
marykay.ca
1-877-411-6279

The concept: “Inspiring beauty. Enriching women’s lives.” About 200 makeup and skin care products from $9 to $200.

Signature product: TimeWise Miracle Set, $230.

Background: Founded in Texas in 1963, came to Canada in 1978. About 35,000 salespeople in Canada with sales of $125 million.

The promise: “An inspiring career. Boundless earning potential. With Mary Kay, you can thrive as part of an international sisterhood.” Incentives include use of a pink Cadillac company car after your whole sales unit reaches $126,000 (wholesale) for two consecutive quarters.

Start-up costs: None. The $150 starter kit and $50 book are recommended.

Success story: Working only part-time, single mom Janice Connell of Waterdown, Ont., makes more than $100,000 a year and gets the Caddy. At age 27, she was living paycheque to paycheque as a pub manager when she began supplementing her income by selling Mary Kay cosmetics one or two nights a week. Within six years, her part-time Mary Kay income exceeded her pub salary. “This business is recession-proof because even in a bad economy women will still buy lipstick,” Connell says. When she her daughter, Katie, turned three, she quit the pub.

Despite painful flare-ups of fibromyalgia, Connell managed a few hours of Mary Kay work each week. She has been able to buy her own home and give Katie, now 16, a private school education, while being an at-home mom, Brownie leader and school volunteer. Although she’s self-employed, Connell will be eligible for Mary Kay’s family security (pension) plan when she retires.

Downfall: Jaye McKenzie had to give up selling Mary Kay not because she wasn’t good at it, but because she was too good. When one customer who could barely afford to feed her children agreed to buy $200 worth of cosmetics, McKenzie’s conscience got the better of her. “I backed right out and said, ‘You don’t need all this stuff.’”

Another obstacle was her lack of a car. She’d been told she wouldn’t need one, but lugging three heavy suitcases full of products on and off Toronto buses was a challenge. “I ended up spending a lot of my commission money on cabs,” she says.

She found the paperwork cumbersome too. “Running my own business and doing my own accounting — I was in over my head.” After a money-losing year, McKenzie cut her losses and eventually became a real estate agent.

Direct sales is a $1.6 billion industry in Canada. More than 80 percent of businesses are multilevel marketing companies, in which independent sales contractors build and manage their own sales teams. Legitimate multilevel marketing companies are not pyramid schemes, which are illegal scams.
How to tell the difference? Here are tips from the Direct Sellers Association (DSA) of Canada.

Multilevel Marketing Company (legal)
• Has a quality product
• Reasonable start-up costs
• Discloses information about start-up costs, average earnings
• May be a member of the DSA Pyramid Scheme (illegal)
• Little focus on product
• High entrance fees
• Avoids disclosure
• Is not a DSA member