Trading Places

CAN homemakers be market-makers too? Apparently yes. The concept is catching on as companies like Time-Life and Lotus Learning, which for years have used housewives on their sales team, have now been joined by far more ambitious corporates. Kotak Mahindra Finance uses housewives in Bombay and Pune to sell fixed deposit schemes. Newly set-up Modicare will initially train 3,000 women in Delhi to sell its home-care products; Swedish multinational Oriflame is recruiting 200 women in Delhi and 200 in Bombay as its founder-distributors to push cosmetics. And pioneers of the housewife sales force concept, US-based cosmetics maker Avon and home-cleaning products maker Amway Corporation, are expected to set up Indian operations soon.

Housewives are not expected to make arbitrary calls; their clientele comprises friends, relatives and acquaintances. Both Oriflame and Modicare will have a multi-level sales force. The sales team starts with those directly nominated by the company, and extends down-line as they in turn nominate others. While the founder-distributors are trained at the company's expense, lower tiers are trained by the distributors themselves.

An enterprising upper middle-class housewife can really rake in the rupees. Initially she needs to pay a registration fee—around Rs 600 for most companies—attend a two-day training course on product features and sales techniques, and then, armed with a sales kit, she's on the job. The returns in multi-level marketing can be stupendous, feels Inderjit Sial, chairman, Oriflame. "A distributor for Oriflame could make Rs 20,000 to Rs 1 lakh a month." The earning from the 25-per cent mark-up on the company's wholesale price is supplemented with an overriding commission ranging from 3 per cent for sales worth Rs 15,000 a month to 21 per cent for Rs 1.4 lakh and more.

"In multi-level marketing, the company can share greater margins with the distributors as it saves on media costs, retailing, and training. One doesn't need to have the product endorsed by popular personalities, because the seller is a person familiar to the buyer," says K.K. Modi, chairman, Modicare.

 Says Raymond D'Costa, district manager, Tyres to become a distributor for the company: "At just 10 hours a week for 20 days a month, one can earn over Rs 5,000. This means selling about three sets of books a month." The company has grown from Rs 10 crore in turnover in 1991-92 to Rs 27 crore in 1994-95.

But would-be marketing superwomen should also worry about the problem of persuading without pestering. Those who choose to ignore the instruction to soft-sell may soon lose their friends.