Party Plans on Fire
December 9, 2014 Leave a comment
by Andrea Tortora
Ignited by emotional connections forged with customers, access to products once only available at expensive salons and an embrace of social media, a handful of party plan companies are seeing their business boom—with no signs of a slowdown.
Nail wrap creator Jamberry, beauty products firm Younique, personalized jewelry maker Origami Owl and two newcomers—jewelry boutique Chelsea Row and nontoxic cosmetics maker Beautycounter—are experiencing significant advances in profits and popularity at a time when overall growth for the party plan model is stuck in a plateau.
Data from the U.S. Direct Selling Association’s 2014 growth and outlook report reveals that between 2008 and 2013, party plans dropped from 26 percent to 23 percent of market share as a direct selling platform.
“Home parties in terms of their success are fairly cyclical,” says DSA President Joe Mariano. “When we think it is hitting a low point that is when we see a rebirth.”
These five standout companies are evidence of that resurgence. Two of them—Jamberry and Younique—are in the Top 10 six-month trend rankings at HomePartyRankings.com and MLMRankings.com, which track public interest and Internet popularity of most party plan direct sellers.
Jamberry reports revenue is more than $10 million a year. Younique’s distributors have said the company sold more than $25 million in September, up from $1 million in December 2013.
Origami Owl is consistently listed in the Top 5 for overall rankings at both sites. It posted 2013 revenue of $233 million and grew by 870 percent for the year. As a reflection of this growth it was ranked at No. 50 on the 2014 DSN Global 100 and received the DSN Bravo Growth Award Based on Percentage this year.
Chelsea Row, launched in September 2014, is too new to have its own rankings. A spinoff of e-commerce selling platform company Kitsy Lane, Chelsea Row is turning the traditional home party on its head with vParty—a truly immersive, real-time virtual party that lets guests shop together online while being connected on audio and video.
Beautycounter launched in March 2013 and offers a safe and nontoxic line of skincare products that work. The company now counts 4,000 consultants in more than 44 states, with 23 percent average monthly revenue growth. Between January and October 2014, Beautycounter posted 424 percent sales growth.
Embracing Social Media
The founding philosophies of these companies are rooted in a desire to better the lives of women by empowering them with products that aid self-expression and by providing the flexibility, resources and training needed to build a career. Each utilizes social media such as Facebook to drive sales, although the strategy is different for each business.
To maintain growth, diving deep into social media selling is likely to yield even larger dividends. Here’s why: An analysis by marketing firm Vocus projects that by 2015, half of all web transactions will occur through social media, accounting for an estimated $30 billion in sales. While 40 million business-related fan pages exist on Facebook, only 17 percent are equipped to sell directly through the social media channel. This is where direct selling has an edge.
The Power of Virtual Parties
Jamberry, Younique and Origami Owl use the Facebook event model to host virtual parties.
Younique sells almost exclusively on social media. Jamberry and Origami Owl independent consultants use Facebook events to supplement the home party experience. Origami Owl Chief Sales Officer Sandy Spielmaker says the technology “extends the reach of the home party.”
Best known for its 3D fiber lashes, Younique built its selling model on virtual parties for two reasons, Co-Founder Melanie Huscroft says. “The overall feeling among women was they are so over the traditional home party and having to clean the house, make the food and send their husband and kids away,” she says. “The virtual platform allows the invite list to be limitless, and location doesn’t matter.”
Virtual parties typically run for seven to 10 days, with independent consultants making frequent posts to encourage interest and spotlight products. Consultants do not carry inventory. They sell through their own branded e-commerce websites.
Many consultants also create videos or use those provided by Younique, Jamberry or Origami Owl to explain how to use the products and suggest ways to mix them up to create new styles. Guests link to these videos through the Facebook event page for their specific party.
The model is working for Younique. In the near future, its virtual party model will also work on other social media platforms, such as Twitter and Pinterest. At 2 years old, Younique now counts 121,285 presenters in five markets. When it entered the U.K. on Oct. 1, 999 presenters signed up within 26 minutes.
Huscroft says people want to sell Younique because of its “simple and generous” compensation plan. Younique pays presenters within three hours of making a sale. Each presenter receives a bank account and a Younique debit card.
“It doesn’t matter what the compensation plan is from a corporate perspective. Everyone pays out … Click here to read the full article