Avon.Com

The Avon brand is one of the leading cosmetics brands in the world. When it started in the late nineteenth century and throughout the middle of the twentieth, their target market was mostly housewives. Since it started as door-to-door selling, it is only logical that their consumers are the ones left at home. However, after much development in society and economy, with the progression of women, their target market also extended to working women.

Today, Avon's products are designed to appeal to the mass market of women aged 25-50 with average to below-average household incomes. Through their representatives, they are able to reach millions of women, roughly 25 million in the United States alone. Direct Selling also allows them to keep the prices down, to be able to cater to average earning women and even below average ones.

Avon's Direct Selling model is a good strategy for it not only differentiates them from their competitors; rather, it is one of the main reasons for their success. Their brand is the fifth largest beauty company overall with annual sales of over $5 billion dollars. When asked if Avon should sell directly to the consumers, the answer is yes, because it works for them.

Since other beauty companies rely on malls and stores for their sales, Avon directly goes to you whether you are in the office or in the comfort of your own home. And with this, the company is able to sell not just to the mall goers but almost to everyone in their target market having 500,000 sales representatives in the United States. The product goes directly to you.

By doing Direct Selling, Avon is able to lessen the costs in terms of rent and wages that a normal company utilizes for their sales in the mall or store. There are particularly no costs attributed to these factors. Another thing is that since the company relies on the sales representatives to make the orders during their selling cycles, they minimize inventory costs such as storage and warehousing.

Direct Selling mainly relies on the sales representative to conduct sales, so these sales representatives can easily sell to their families and friends at the start. And after trying out the product, they are sure to appreciate the quality of the products at the low price. These families and friends in turn may recommend to other people to buy, thus, expanding the network.

Basically, the business selling process of Avon is Direct Selling where in they recruit sales representatives who will be the one in charge of dealing with the customers directly. There are two types of sales representative profiles, those who sell part time and full time. Full time sales representatives are also called President's club members. There are also part-time sellers who are usually in their 30's and 40's who are also employed in other companies. Selling Avon products is just their second job. However, this is also an advantage because they are able to reach a new market, the working women, who can be easily tapped by these part time sellers.

All of the representatives are not employees of the company, thus they don't have to give them monthly salaries and other benefits. The sales representatives earn in proportion to what they are able to sell. Thus, these representatives use different styles and strategies to sell the Avon products. This is turn also contributes much to the advantage of Avon. Although, the problem with this is that since sales representatives are contracted, the turnover rates are high and since the customer lists are in the sales representative, once a representative leaves the selling business, she takes with her the customer list she owns. Avon has no way to trace who their end customers really are and take care of them in case they are "stranded."

There are 26 "two week selling campaigns." For each campaign, the company produces a 150 page full color brochure featuring the entire product line available for sale. Representatives have to purchase these brochures and give them out to their customers. After this, the representatives make a purchase order and receive these after 5 days. It is the responsibility of the representatives to sort the delivered items and deliver the items to their customers. Avon also gives a 100% satisfaction guarantee for consumers who were dissatisfied with their product, they can return them to the representative and the representative will be the one responsible for handling these items.

In terms of marketing, Avon does not put too much effort in advertisements as they only spent $45 million in advertisements in 1999. This can also be attributed to direct selling as the representatives themselves are the ones who finds the customers. Another thing is sampling. Through the representatives, Avon can easily reach to their customers and give samples.

Technically, the selling process can be done through the website. Customers can easily go to their URL (avon.com) and make an order. But logistics and after-sales wise, it is possible but rather costly. First, Avon will have a hard time in fulfilling an order of every customer especially when a customer makes a per-piece order rather than delivering the orders to the representative and the representative to give the orders to their customers. Another thing is after-sales. Avon offers a 100% customer satisfaction guarantee. With their e-commerce website, it would cost them thousands or even millions of dollars if there were a lot of product returns. So it would be impractical to use the e-commerce website to be the main channel for distribution and selling of Avon. Also, the e-commerce site eliminates any interaction between the customers and Avon (in this case the representatives). Thus, Avon will not be able to reach them with samples and talks or recommendations on what to buy for their skin type etc, as a representative could. However, the website of Avon can be used as a B2B e-commerce where in a representative can input their orders to Avon therefore minimizing the time for ordering and saving costs in purchase orders.

With the use of e-commerce, Avon can reach almost everyone;