A bailout in sales

When De Ann Mensch was laid off last month for the second time in little over a year, she did not polish her resume.

Instead, the ex-bank teller (and ex-mortgage loan closer) burnished her sterling silver jewelry and her sales pitch. Now the softspoken Mensch, 44, of Pennsburg, spends several hours a week at house parties where she hawks the earrings, necklaces and other jewelry she loves to wear, earning about $250 a pop in commissions.

"I need the income," said the mother of two, who has a son in college. "I don't have to worry about being fired or laid off; I don't have to worry about the company being downsized."

In a weak economy, that promise is solid gold. As layoffs mount and the nation's unemployment rate hovers at 8.1 percent, many of those down on their luck have joined jewelry company Silpada, cosmetics maker Avon, or any number of other direct-sales companies to fill the income void.

The door-to-door pitch, or more often the house party, that peddles jewelry, cosmetics, pet items, health products, and such - known as direct sales - has consistently weathered economic storms, experts say.

"Whatever it is that makes someone feel better is a good candidate for that little splurge, and many direct-selling companies have products in that range," said Amy M. Robinson, spokeswoman for the Direct Selling Association.

Perhaps an entire outfit or a fancy vacation is out of the question, but a $4 lipstick can fit any budget, direct sellers say. Even a more expensive piece of jewelry can find takers who want a pick-me-up from the recessionary blues.

Silpada, for one, saw its sales force grow to 27,000 last year, up 13 percent over the previous year, and revenue jump 8 percent to $270 million - its best year ever, said Jerry Kelly, CEO and cofounder of the Kansas City company.

Besides, the social aspect of parties - where consultants talk up products while friends of the hostess sample items and compare notes, often while sipping wine and munching appetizers - encourages participation. It even offers a relatively cheap girls' night out.

"If you agree to attend one of your friend's parties, then you buy," said Stephen Hoch, a marketing professor at the Wharton School. "You may not buy much, but you buy some."

An analysis of the period from 1987 to 2007 found that during recessionary times, direct selling in the United States (adjusted for inflation) grew 4.5 percent on average, Robinson said. During the same slow years, the gross domestic product took a baby step of less than 1 percent, and retail sales fell 3.3 percent.

While 2008 numbers are not due until midyear, Robinson said anecdotal reports indicate the industry continues to prove "recession resistant. . . . The party-plan jewelry companies seem to be doing particularly well, as are some of the smaller companies that are still in a high-growth stage."

Karen Pressley, 42, of Bensalem, put all her energies into pushing Arbonne Swiss skin care products after she lost a part-time job this year as an intake coordinator for a psychology practice.

The other day, she touted face creams and cleansing regimens - crafting a pitch that shared her life story (she recently had surgery for cancer). "I use the detox every 30 days to get rid of any free radicals in this body of mine," she said.

Friend Robin Middleton, 41, a police officer, hosted the gathering in the Far Northeast with four guests. They tested creams and sniffed fragrances as they soaked their feet in tubs that contained a sudsy detox concoction.

It was a couple of hours to relax. Amid giggles and chatter, the women marveled at before-and-after pics before they made purchases. One joked that her buddy needed that eye cream for bags. Another said she could use a case of anti-cellulite kits.

By night's end, Pressley had sold $500 in products and earned $120 in commissions for herself.

While she isn't making her previous income, she's hopeful. "I'm going to work it as much as I can," said Pressley, who is married and has two children. "It's fun."

Hoch said the key to success is the ability to build a broad-based network, pyramid style.

A rep earns a commission on sales she makes - the business is overwhelmingly female - and often gets more by recruiting others to form a team under her. The larger the team, the more the leader earns.

Most direct sellers make modest wages, Hoch said. "But some are driving around in pink Cadillacs," he said, referring to the car incentive for top earners at Mary Kay Cosmetics.

"Direct selling really comes down to your ability and your desire," said Andrew Shure, founder of Chicago-based Shure Pets, which saw a threefold increase in new consultants from December to January for its pet products. "It comes down to people more dependent on their own efforts than on someone else's efforts."

Avon, the grande dame that first knocked on doors in 1886, is aggressively going after those struggling to meet the bottom line.

"Take Control of Your Finances and Make More Money in 2009," declares a promotional ad on its Web site. Before the Super Bowl game, the company plugged its earning opportunities, not its products. One smiling consultant touted the job security. "It's my business," she said. Another noted that Avon helps pay the bills.

In 2008, its North American sales force increased 2 percent from the previous year, even as the economy worsened, according to its earnings report.

For all its resilience, though, direct selling is not always a sure bet. Even though Avon's global revenue rose 8 percent last year, those numbers have slipped in North America, where revenue dropped 5 percent.

Still, these businesses have their attractions in uncertain times. Start-up costs are low (a few hundred dollars or less for starter kits), entry is easy (no resume or interview required), and that captain-of-your-own-ship philosophy has a nice ring to it.

"You get out of it what you put into it," said Mensch - from her kitchen table.

Then she handed a visitor a Silpada catalog.