The Prospecting Professor: Door-to-Door Selling

October 05, 2005

Door-to-Door Selling

Door-to-door sales has a rich tradition in this country. In the early years in America, The "Yankee Peddler" walked or rode from door-to-door or farm-to- farm. They sold items like pins, needles, hooks, scissors, combs, small hardware, and perfume. Those who walked carried their goods in tin trunks slung on their backs by a harness or leather strap. The more prosperous used wagons.

Today the direct selling tradition continues with more than 300 companies selling direct to customers through consultants and home parties. While direct sales is still just a small proportion of total retail sales (1%)...that is still a figure in excess of $30 billion annually.

The older direct selling companies are well-known, with names like: Amway, Fuller Brush, Mary Kay, Shaklee, and Tupperware. However, the industry is experiencing a growth spurt. There have been more start-ups within the past five years than have been seen in the previous twenty. The Direct Selling Association, www.dsa.org now has more than 150 active member companies.

Direct selling means low overhead and offers customers a chance to test, touch, and taste a product before buying. However the key to success appears to be the enthusiasm of the consultants...who use and believe in the products they sell. It's also about interaction and socializing, especially for those companies that emphasize the sales party as the primary selling vehicle.

The industry received a big boost from Warren Buffett. In 2002, Berkshire Hathaway purchased Pampered Chef ,which markets house and kitchenwares.

Doris Christopher founded the Pampered Chef in the basement of her Chicago home in 1980. The stay-at-home mom had a simple idea: offer professional-quality kitchen equipment directly to consumers through in-home cooking demonstrations performed by a sales force of "kitchen consultants". Let customers see how the product works, try it out, and taste the results.

Reportedly, Mr. Buffett's company paid Doris Christopher a cool $900 million. Not bad for a former home economics teacher.

October 05, 2005 in Selling | Permalink