Saturday, January 26, 2008

Party plan exploits

Outside my door sits a catalogue for some household products left by 'Ian' two weeks ago. Looks like Ian has forgotten to collect his catalogue or he has given up on selling.

I was first introduced to this form of selling/buying when I first came to this country, O, some 15 years ago.

This chap dropped off this catalogue. I found some things useful in there and ordered. He delivered. I paid by cheque. We chatted and he told me that his wife was expecting and he wanted to make some extra money.

These catalogues kept coming, but they were never from the same person. I quickly figured that while the big company will always make a profit from what it sells, the little persons dropping and collecting the catalogues cannot be making enough money to make this a worthwhile second income.

But it does not matter to the big company. So long as there are people out there hoping to make some commission and doing the legwork for them, products will be shifted.

I've been thinking of trying to expand my business via the party plan route: Women (they are usually women) host parties to give friends and neighbours a chance to view products. Orders are placed through the party agent (who may also be the host), and the host distributes the products. The party agent gets the commission, the host gets a gift.

My research, however, indicates that there is more to this. Like the catalogue droppers, party agents only make a tiny commission. In order to get a decent return, they have to recruit more party agents, from whom they earn a second tier of commission, and these party agents need to recruit other party agents, et cetera.

In the end this is nothing more than multi-level marketing. Like the catalogue droppers, party agents will leave the system because they are not making enough commission to bother any more. But it does not matter to the big company. All these 'little people', the ones who are reaching new markets all the time, are shifting the goods and the company will continue to make a profit.

Looking at this scenario in the unkindest way, the people at the end of the chain are merely being used (or abused?). Once their usefulness is exhausted, the company doesn't even have to sack them. Such people go on their own accord.

No fear of any legal comeback on that even. The company has nothing to lose. Even the catalogues and demo products have been paid for upfront by new agents.

That leaves me with a dilemma. How could I adopt the party agent route without 'exploiting' these agents because that is not, I sincerely feel, an ethical way to do business?

I have some ideas, but they need developing.

Back to Organic-Ally.

1 comment:

sabina moon said...
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