Avon, is this really possible/sustainable?

[ImFree2doasiwant]

I discovered today that a friend is earning 5k a month from Avon. She's some sort of team leader, and started by selling about 18 months ago. She does work quite hard at it by all accounts.

I'll admit to being rather gobsmacked! I thought avon was just "Avon ladies" with catalogues, and now online, taking your orders.

Has anyone else got experience of this? I'm really not considering it for myself (I've seen her social media, it's not something I'd be good at I don't think! )

Often when MLM product is sold "at cost" we can see the price is at least double the retail price of a branded item of equivalent quality.

@BillMasen I have personally need how much if costs to manufacture that lipstick and a load of cardboard and paper?

Sorry. There is just no way. The company couldn't be in business if it's production costs were that high.

That was meant to say "u have personally seen"

@BillMasen

It's a shame, I used to quite like a mooch on Avon's website. It reminded me of the catalogues that my Mum would have lying around when I went to visit.

I know two ladies who earn a fortune from MLM companies. The way to earn massive amounts of money seems to be to recruit constantly, and encourage everyone you recruit to buy products for their own use, then get them to recruit, and do the same, and so on.

Both the ladies I know are very confident and OTT; one has a performing arts background so she is good at convincing people to sign up.

Right, clearly I’m not going to share costs of products but the lipstick rrp is £8 so I’ll let you guess a cost/margin on that

Add in packaging brochures and postage

Remember the 10 is inc vat so remove that

There’s not much profit in that specific kit. Pence

Rrp £8

So they’re making at least £2 profit on their new reps over and above any normal profit from that lipstick.

No profit my bum.

@Mumoftwoinprimary

The problem with any MLM is that it encourages abuse within the down line. Which the head office can then deny but the fact is that the methodology is still designed to encourage it.

For example - I have a team member Sally. She hasn’t sold anything. Sally is pretty obviously rubbish at selling and so perhaps should be encouraged to go and get a different job instead. I make no money from this. Or I could suggest to Sally that she might find it easier to sell if she buys some “stock” to show people. I make money from this. This is in my interests. But it isn’t in Sally’s interests. As she is now much poorer.

And that’s the problem. Avon can say they discourage this but what would happen to me if Avon found out. “I’m just trying to help Sally grow her business.” I say. “Excellent” says Avon and pays me my commission.

All this is fair. It’s a problem and yes I can 100% say we don’t want that but spotting and preventing pressure is a problem.

Perhaps we could do more.

Lipstick cost price is approx $2-3 if mass manufactured.

This is why it's risky when comments are stated as fact, like saying that Avon don't make profit on that £9 kit. They absolutely do!

If they made only pence profit on that despite the lipstick being the only non paper goods in said kit, and everything jn said kit being mass manufactured, their business would not be viable.

@Smallsteps88

Rrp £8

So they’re making at least £2 profit on their new reps over and above any normal profit from that lipstick.

No profit my bum.

How much do you think packaging costs? Postage? 10 brochures? Other things included like forms and bags?

Genuine question. I can’t share what they actually are as I’m sure you understand but you’ll see it adds up quickly

@youvegottenminuteslynn

Lipstick cost price is approx $2-3 if mass manufactured.

This is why it's risky when comments are stated as fact, like saying that Avon don't make profit on that £9 kit. They absolutely do!

If they made only pence profit on that despite the lipstick being the only non paper goods in said kit, and everything jn said kit being mass manufactured, their business would not be viable.

Let’s assume you’re right Add in post pack paper brochures and remove vat can you see how income of 8 ish and costs might be ckose

The £9 “kit” is literally just a lipstick in cardboard. There are no brochures or sales tools included in this “kit”. It is literally a case of Avon charging full rrp of £8 for the lipstick and £1 for cardboard and postage to the customer but calling them a rep. Because they get the added bonus of signing up and agreeing to sell a certain amount of their products for them. Good deal

How much do you think packaging costs? Postage? 10 brochures? Other things included like forms and bags?

Based on the £9 kit the postage and cardboard costs a maximum of £1. So that means the 10 brochures and forms cost £1 too? So a brochure and a form costs 10p to produce? Really? I highly doubt that.

Add in post pack paper brochures and remove vat can you see how income of 8 ish and costs might be close

Not close at all, nowhere near just 'a few pence' profit even after lipstick cost price for the paper goods (order forms and booklets), packaging, posting and VAT.

Let’s ignore the £9 or £10 cost, we know that the lipstick rrps at £8. That’s what they’re selling it at on their website and they make a profit at that cost- so it’s bollocks to say they make no profit from selling the exact same lipstick at the exact same cost to someone who signs a form when they buy it. They absolutely are making profit from selling “kits” to “reps”.

@Smallsteps88

How much do you think packaging costs? Postage? 10 brochures? Other things included like forms and bags?

Based on the £9 kit the postage and cardboard costs a maximum of £1. So that means the 10 brochures and forms cost £1 too? So a brochure and a form costs 10p to produce? Really? I highly doubt that.

Again can’t share actual numbers but postage by courier to new rep is more than £1. What do you pay for delivery when you order something online? It’s not far off that

Brochures more than 10p each too. Quite a lot more.

My mum used to be an Avon lady, she made a tidy profit as we lived in a small village and she had a monopoly at the primary school, church and baby group.

The model is outdated and its a lot of faff to buy items that could just be picked up in Boots. Instead of evolving to an online shop, it's evolved to a mlm recruitment model.

I think BillMasons brain washing from the head office Huns is firmly installed.

Brochures more than 10p each too. Quite a lot more.

So Avon are making a loss on recruiting new “reps”??? 😂😂😂

Pull the other one.

@Smallsteps88

Let’s ignore the £9 or £10 cost, we know that the lipstick rrps at £8. That’s what they’re selling it at on their website and they make a profit at that cost- so it’s bollocks to say they make no profit from selling the exact same lipstick at the exact same cost to someone who signs a form when they buy it. They absolutely are making profit from selling “kits” to “reps”.

Look you’re going to have to trust that throughout this thread I’ve been honest and I am telling you with as much transparency as I can on a public forum that starter kits are not profitable. I’m not “being told” that I literally have the cost breakdown in front of me as we speak. The margin on the £10 kit is pence. More on the £9 but not much, similar on the 28 and 30.

Posters who know can add up costs and see it’s reasonable. I can’t tell you base costs of products and brochures so I’m asking you to accept I’m genuine here

@Smallsteps88

Brochures more than 10p each too. Quite a lot more.

So Avon are making a loss on recruiting new “reps”??? 😂😂😂

Pull the other one.

Either a loss or a tiny profit. The value to Avon only comes when reps sell, and therefore earn too

Look you’re going to have to trust that throughout this thread I’ve been honest and I am telling you with as much transparency as I can on a public forum that starter kits are not profitable

Straight out of the recruitment textbook. “Trust me- you’ll make all your money back first month” “trust me- you’ll make £5k a month and have your own team in a year”

😂

Forgive me if I don’t.

If there is no profit why does someone have to buy a lipstick to become a rep? Is there a free sign up option?

Either a loss or a tiny profit.

But we know that’s rubbish because the lipstick is sold to online customers for £8 and that’s definitely making a profit. So how can it suddenly be making a loss or tiny profit just because it’s bought by someone else?

@Smallsteps88

Either a loss or a tiny profit.

But we know that’s rubbish because the lipstick is sold to online customers for £8 and that’s definitely making a profit. So how can it suddenly be making a loss or tiny profit just because it’s bought by someone else?

Because if you bought it online you’d pay delivery, and it’d be sent in cheaper packaging. We’d not make much on one lipstick

Pop it in better packaging, deliver it for free, pop some other bits in the box and the costs get close to the revenue

And I’d they’re making a loss on RRP then how on earth can Avon afford to sell all their products at 15% off to customers who sign forms?