Steeped Tea was featured, along with 2 other leading direct selling companies, in this National Post article about direct sales in the current economy. Says Steeped Tea founder, Tonia Jahshan, "It's wonderful to see Steeped Tea on the same page as two other major direct selling companies. This says a lot about our company, the products and the consultants who are a part of this growing company."
Laid off? Why not throw a party?
Direct selling firms doing well in economic downturn
Mary Teresa Bitti, Financial Post Published: Monday, May 25, 2009
One of the positive aspects of an economic downturn is a return to simple pleasures and entertaining at home, and that can only be good for direct sellers.
Mother and daughter, Sylvie Rochette and Amelia Warren and their team know that first hand. "We are conscious of what's happening in the world and we are in tune with the needs of our customers," says Ms. Rochette, who launched North Saanich, B. C.-based Epicure Selections in 1997. The 100% Canadian, family-owned, women-led party plan direct sales business now has $40-million in annual revenue, with about 6,000 consultants coast to coast -- and growing. Many of the new recruits are coming from southwestern Ontario, where the manufacturing sector has taken a hit and layoffs have left families struggling.
Its products, which include more than 200 spice blends and gourmet food products, are hitting all the right notes with consumers. "For our recipes and products to make the cut in the catalogue, they need to be affordable, healthy, fast, easy and delicious," Ms. Rochette says. "We are trying to make our main course no more than $3.50 per serving."
While economies around the globe are contracting, Epicure Selections continues to grow. Since 2001, the company has grown 1,269%; almost 40% a year. Revenue for this March rose more than 55%, compared with a year ago.
Epicure Selections sells more than three million products a year and recently was named Employer of the Year and Business of the Year by its local Chamber of Commerce. More importantly, it has given thousands of women a chance to become small business owners. "How much you earn is directly proportional to the amount of energy you put in to the business," says Ms. Warren, who joined the company three years ago. "Last year, our top consultant earned $280,000."
Ms. Warren, who serves as vice-president and runs the Epicure Foundation, which supports food security initiatives across the country, is proud to help grow a legacy that is part of her childhood . "There is no glass ceiling. We are making products that are healthy, wholesome, made by Canadians with integrity and at the same time we are empowering women, giving them more options and more freedom."
The direct selling model -- think Tupperware and Avon -- generally done through house parties led by consultants, is proving to be a bright light in dark times. According to the Direct Sellers Association of Canada, direct sales grew by 25% in the past two years, to $1.96-billion from $1.57-billion. In Canada, direct sales employ about 4,000 people full time and 1.3 million direct sellers. In this market, going direct to the consumer seems to make good business sense. And the party plan model seems to be tailored to women.
"If you have a retail environment, you have to get in your car and have consumers come to you," says Janice Gerol, vice-president and general manager of Pampered Chef Canada. "When we go out and host our cooking shows people come because its fun, they get to eat, they get to socialize with their friends and family. While they are there they get swept up in the opportunity. They see good value and at the end of the night, they can bring something home for their family." That something is Pampered Chef's line of cooking tools.
Ms. Gerol was a teacher for 12 years before entering the direct selling workforce and bringing U. S.-based Pampered Chef into Canada in 1996. She has clear thoughts on why direct selling is faring so well in the current market.
"Direct selling is resilient in [tough] economic times because our business is dependent on our consultants being excited and motivated." They are certainly motivated. At a time when layoffs are routinely announced, direct selling is looking for people, for example, she says Canadian recruitment at Pampered Chef is up 19%. And that translates into growth in sales.
"We offer a new consultant kit with tools, recipes, paperwork, apron -- everything you need to start your business and do your shows," Ms. Gerol says. For just $195 you're in business. "There is no inventory to carry, no hidden costs, no downside. You have to go out and do the shows to earn your commission. If you are willing to do two shows a week [at three hours each] you can earn $1,000 take home in a month. That's a concrete average. Worst case scenario: you have these products and you get to keep them. There are no sleepless nights."
Tonia Jahshan, founder of Hamilton-based Steeped Tea Inc., attributes the recent growth of her company to the down economy.
The business started as a hobby after a trip to Nova Scotia in 2006. "We were going through a difficult time," she says. "We had lost a baby to a miscarriage and wanted to get away. At our first [B&B] stop, the owner gave me a cup of Cream of Earl Grey which was fantastic. It was a loose tea. I had always been a tea drinker but this blew my mind."
The couple stocked up on loose tea from a little shop in Mahone Bay and brought it home. "I felt it was important to get the word out about loose tea and its health benefits -- it has more antioxidants than a tea bag. These are the things we talk about at our tea parties."
Ms. Jahshan drew up a five-year business plan based on the direct selling party model, something she was familiar with because she had been a direct selling consultant for years. Almost immediately after launching Steeped Tea in October, 2006, she was booking 15 to 18 tea parties a month. By the following May, she had reached her five-year goals and revised her business plan. She incorporated the business, hired a professional designer to make up the catalogue and hired her first consultant.
"We are now close to 100 consultants in less than two years," says Ms. Jahshan, who notes sales in 2008 were up 300% from a year earlier.
"We are one of the few companies offering jobs. Since January we have recruited almost 30 women. There are no startup costs. You have a starter party, one of our consultants will come to your house, you invite all your friends and family for a tea party, and the sales you generate at your party pay for your kit."
Consultants work on straight commission, earning 25% of everything they sell. They also earn a percentage of the sales from their recruits.
"I knew it was a good idea. I knew it was going to work. I didn't know it would happen this fast. That's why I had a five-year plan, but I met all my targets way before," Ms. Jahshan says. "Even with the recession, nobody is going to stop buying tea. Tea is one of the hottest selling beverages on the market and it's only going to get hotter."
