Avon’s Distribution Channels

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Excerpts....

Avon, being an international manufacturer and distributor of beauty, household, and personal care products, had believed in direct selling since its inception. It offered a wide range of beauty products, including skin care products, cosmetics, perfumes, spa treatments, make up, and everyday cosmetics & toiletries like shampoos,... deodorants, and body lotions. Its product line included many recognizable names such as Anew, Avon Color, Skin-So-Soft, and Advance Techniques. Avon Color was one of the leading cosmetic brands in the world. The products were mainly targeted at women in the age group of 25 to 50 years. The products were of high quality, were priced affordably, and positioned as products that provided value. .....

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Broadly, Avon’s distribution channel could be divided into three major categories: Direct Selling, Limited Retailers, and Online. Of these, direct selling was its primary channel while the other two were secondary channels of distribution. The direct selling channel was Avon’s core channel, one which the company had relied on since 1886 when its founder himself used to undertake door-to-door selling. ..........

The representatives were independent contractors and not employees of Avon. Once a person signed up to become an Avon Rep, the district manager, who was an employee of Avon, called on him/her to explain the process of selling the products. The new reps were required to remit a sign-up fee of $ 10 . They were given 20 brochures, sample products, sales books, order forms, etc. .........

In the early 1980s, retail outlets were gaining a strong hold on the market. Almost 80% of all beauty products were sold through retail stores and this market had become difficult to ignore. However, for Avon, selling its products through retail stores was difficult as it knew the move could alienate its sales representatives. In order to enter into department and specialty stores, Avon entered into a joint venture with Liz Claiborne (designer) and created fragrances and cosmetics line and made these products available in 2,000 stores. ..........

In 1997, Avon became the first cosmetic company to sell its products directly online. There was a dedicated Avon representative website which also informed consumers about new products in the industry. Though it was started in 1997, the electronic commerce strategy was not taken very seriously till 1999.........

Jung’s ventures to establish a retail channel and an online presence made customers and representatives alike feel that Avon was no longer a direct sales company, and that it was turning into a packaged goods company. Jung tried to position some products as premium cosmetics, but that plan did not work out, as the premium products were hard to sell through direct marketers. Similarly, restructuring efforts under her direction also prove unsuccessful. .........

Exhibit I:Principles Developed by David H. McConnell
Exhibit II:Products Offered by Avon
Exhibit III:Bonus Earned by Unit Leaders
Exhibit IV:Various Communities of Avon