Business model bringing Avon 15% profit margins: 140,000 Romanians sell cosmetics of 70 euros/month each

Autor: Cristina Rosca 28.03.2011

Avon Romania, the biggest cosmetics direct sales company, has 340 employees and 140,000 distributors, who do not have an employee status with the company, but who account for 1.5% in Romania's overall active population.

"The number of representatives rose in 2010, during the crisis. In late 2009 we had somewhat fewer representatives, but their number was close to 140,000," said Răzvan Diraţian, commercial manager with Avon Romania and Moldova. Each Avon distributor has an average of 15-25 products per order, and the monthly average of sales is put by ZF at 70 euros for each distributor.

Amid the current challenging economic conditions, there has been a shift in the consumption behaviour, with Romanians choosing cheaper products. Though cosmetics consumption is half the level of other European countries, Romanians are mature consumers, who do not make impulse purchases, believes Diraţian.

He says the same behaviour can be noticed in 2011 as well.

"It's very hard to say whether 2011 will be better than 2010. From my point of view, the crisis is not over. Clients are equally wary of buying very expensive products. Romanians want cheaper products", Diraţian says.