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

Autor: Cristina Rosca

28.03.2011, 23:42 17

Avon Romania, the biggest cosmetics direct sales company, has340 employees and 140,000 distributors, who do not have an employeestatus with the company, but who account for 1.5% in Romania'soverall active population.

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

Amid the current challenging economic conditions, there has beena shift in the consumption behaviour, with Romanians choosingcheaper products. Though cosmetics consumption is half the level ofother European countries, Romanians are mature consumers, who donot 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 equallywary of buying very expensive products. Romanians want cheaperproducts", Diraţian says.

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