Thinking outside the lunch box

Coffee, cake and bring your credit card plan marketing, whereby goods are offered for sale at a social event, was pioneered by the Tupperware company in the 1950s and is today used to push wares from vitamins to lingerie.

Coffee, cake and bring your credit card plan marketing, whereby goods are offered for sale at a social event, was pioneered by the Tupperware company in the 1950s and is today used to push wares from vitamins to lingerie.

Thousands of Australians work in the sector - but how are they doing with their in-home presentations and catalogues? Is party planning a nice little earner, or an express way to lose friends and alienate acquaintances when you lean on them to buy your wares?

So far, it's been the former, says Katherine Shaw, 33, who in June became a party plan consultant for sex toys and lingerie vendor April Nites.

A former teacher's aide, the Penrith mother of two was looking for a way to augment her diesel mechanic partner Shane's wages, which didn't involve arranging childcare for their two-year-old daughter, Charlotte.

The flexible hours and low start-up costs prompted her to try her hand. Tupperware was considered at first but rejected.

"It didn't suit my personality and there are so many people doing it ...I thought, 'What else is there?"' Shaw says.

She chose April Nites because of the help it offered rookies to organise parties. About half her events have come via company leads. Family and friends have also been happy to host, Shaw says - apart from one relative who baulked at the idea of a risque in-home demo.

Consultants must buy a demonstration kit for $400, which can be paid for in instalments. Shaw has averaged one party a week since taking delivery of hers. On commission of 20 per cent, she's pocketed about $165 an event, for between three and five hours work.

Limiting her catchment to an hour's drive from her home has kept a lid on travel costs and made it practical to hand-deliver rather than post clients their discreetly wrapped purchases.

While no substitute for a full-time job, it's a good top-up, which covers extras for her children and provides an opportunity to get out of the house, Shaw says. Her sentiments are shared by many other stay-at-home mothers. Party planning is a predominantly female domain, on both the buying and the selling side - "come over for wine and cheese and we can look at plastic containers together", said no man ever - and more than 80 per cent of consultants are women.

Less than 5 per cent do it full time.

Globally, the direct sales sector, which also encompasses network marketing and catalogue merchants, such as Avon, was worth more than $147 billion in 2011.

In Australia, direct sales consultants make about 2 million home visits a month, and generate average annual sales of $2200 each, according to the Direct Selling Association of Australia.

Most women get into the game after going to a party and falling in love with the products, according to Lyndsey Baigent, a consultant to the party plan industry.

Low set-up costs - they range from $99 to about $2500 for some jewellery and clothing businesses - make it easy to enter and exit the market. The churn rate is high, with many consultants dropping out within weeks.

"The reality of what's needed to grow a business kicks in ...loving the product just doesn't cut it," Baigent says.

Commissions range from 20 per cent to 45 per cent and most companies offer incentives for those who exceed monthly sales targets. A party generating 20 per cent commission on sales of $1000 is viewed as a decent haul, Baigent says. Typically it entails around five hours work. "People would see that as a good night's earning gives a sense to party planners that they've done it right."

The industry can be a good source of pin money for those who stick the course, says David Sharp, a partner at Sydney accounting firm DFK Richard Hills, who fields several calls a year from women thinking of giving it a crack. Typically they're wives of clients who have been out of the workforce for several years and are looking to rebuild their skills and do something that fits in with family commitments. "It works well if it revolves around a night out and it doesn't offend your friends," Sharp says.

Consultants must register as sole traders but can't claim expenses until they begin earning above the tax-free threshold of $18,200. Registering for GST is also unnecessary until annual sales exceed a total of $75,000.

Former hospitality worker Deanne Roumelliotis, 50, is one of the few who turns over more than this. The Melbourne mother became a consultant for Enjo cleaning products in 2001 when her now 17-year-old twins started school and, 12 years on, she's at the helm of a 70-strong team of consultants and pulling in around $150,000 a year.

An enthusiastic hostess herself before entering the sector, Roumelliotis researched several products, including cosmetics and designer clothing for children.

She was turned off the latter after learning consultants were required to spend $2000 every six months to buy the latest range. By contrast, Enjo had a start-up cost of about $400 and introduced very few new products.

Despite having low expectations for what she might earn - "I would have been happy with $50 a week" - Roumelliotis hit the ground running. She generated $1000 in commission, from sales of about $4500, in her first month and began holding up to eight parties a week. "The little part-time job became bigger and bigger," she says.

These days she does two parties a week, with average sales of $1200 a party. Commission is paid on a sliding scale of 20 per cent to 39 per cent and she averages about 34 per cent. The bulk of her earnings comes from her cut of sales made by her team.

Key to her success has been viewing direct sales as a business, rather than a hobby, from the outset, Roumelliotis says: "A hobby costs you money; a business makes you money."

More than pin money

Keen to try party plan and make more than pin money? Industry consultant Lyndsey Baigent has some tips:

1. Join a company that supports your lifestyle.

2. Research the company; don't just fall in love with the product.

3. Prepare to feel uneasy at times — making money means moving out of your comfort zone.

4. Get savvy with time management — know the difference between being busy and being productive.

5. Ask for help when you need it.

6. Set earnings goals and have a business plan.

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