Party plan
Encyclopedia
The party plan is a method of marketing
products by hosting what is presented as a social event
at which products will be offered for sale. It is a form of direct selling
. The primary system for generating sales lead
s for home party plan sales is the home party itself: the salesperson uses the home party business model as a source for future business by asking attendees if they would like to host selling parties, too.
Direct selling through the party plan typically uses multi-level marketing
(salesperson is paid for selling and for sales made by people he recruits or sponsors) rather than single-level marketing (salesperson is paid only for the sales he makes himself).
This plan has been used primarily to sell items whose main appeal is to women by women, such as kitchen utensils, home decor items, jewelry, cosmetics, handbag
s, and similar products. Recent additions to the field include lingerie
and sex toys
. Sometimes a combination party is held, at which a wide variety of such merchandise is offered for sale.
At the event, the salesperson displays and demonstrates various products. She then takes orders from attendees. The salesperson is almost always paid solely a commission
on sales. If the salesperson has recruited other sales people into the organization, then she also receives a commission based on her recruits' sales.
, who developed it for the Tupperware
company in the early 1950s. The success of Tupperware was widely emulated.
Purse parties differ, however, from these other parties in that the merchandise at purse parties consists of counterfeit knock-offs of popular, name-brand purses. Merchandise at American purse parties is usually bought in bulk from smugglers
in New York's Chinatown or in Los Angeles' garment district and sold to unsuspecting customers at a significantly higher price, although still lower than the retail price of the legitimate product. These inferior smuggled goods have been linked to organized crime
and the funding of terrorism
, so purse parties have become of interest to law enforcement
. Selling such purses, with an imitation designer label, is a US federal crime called trafficking in counterfeit goods, even if the seller tells the buyer that the purse is a fake.
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
products by hosting what is presented as a social event
Party
A party is a gathering of people who have been invited by a host for the purposes of socializing, conversation, or recreation. A party will typically feature food and beverages, and often music and dancing as well....
at which products will be offered for sale. It is a form of direct selling
Direct selling
Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location. Peddling is the oldest form of direct selling. Modern direct selling includes sales made through the party plan, one-on-one demonstrations, and other personal contact arrangements as...
. The primary system for generating sales lead
Sales lead
A sales lead, or Sales Lead, is the identification of a person or entity that has the interest and authority to purchase a product or service. This step represents the first stage of a sales process. The lead may have a corporation or business associated with the person. Sales leads are generic...
s for home party plan sales is the home party itself: the salesperson uses the home party business model as a source for future business by asking attendees if they would like to host selling parties, too.
Direct selling through the party plan typically uses multi-level marketing
Multi-level marketing
Multi-level marketing is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation...
(salesperson is paid for selling and for sales made by people he recruits or sponsors) rather than single-level marketing (salesperson is paid only for the sales he makes himself).
This plan has been used primarily to sell items whose main appeal is to women by women, such as kitchen utensils, home decor items, jewelry, cosmetics, handbag
Handbag
A handbag, or purse in American English, is a handled medium-to-large bag that is often fashionably designed, typically used by women, to hold personal items such as wallet/coins, keys, cosmetics, a hairbrush, pepper spray, cigarettes, mobile phone etc....
s, and similar products. Recent additions to the field include lingerie
Lingerie
Lingerie are fashionable and possibly alluring undergarments.Lingerie usually incorporates one or more flexible, stretchy materials like Lycra, nylon , polyester, satin, lace, silk and sheer fabric which are not typically used in more functional, basic cotton undergarments.The term in the French...
and sex toys
Sex toy party
A sex toy party is a usually female-only gathering where participants learn about and buy sex toys. It is a type of party plan, similar to Tupperware parties....
. Sometimes a combination party is held, at which a wide variety of such merchandise is offered for sale.
How it works
In this system, representatives of the sales organization, almost invariably women, approach other women about hosting a social event in their homes during which a product will be demonstrated. In consideration, they will be given hostess gifts and a portion of the proceeds from the amount of goods sold. Frequently all in attendance will be given a token item of nominal value as an incentive to attend.At the event, the salesperson displays and demonstrates various products. She then takes orders from attendees. The salesperson is almost always paid solely a commission
Commission (remuneration)
The payment of commission as remuneration for services rendered or products sold is a common way to reward sales people. Payments often will be calculated on the basis of a percentage of the goods sold...
on sales. If the salesperson has recruited other sales people into the organization, then she also receives a commission based on her recruits' sales.
History
The party plan is regarded as primarily the invention of Brownie WiseBrownie Wise
Brownie Wise was a pioneering American saleswoman largely responsible for the success of Tupperware through her development of the "party plan" system of marketing....
, who developed it for the Tupperware
Tupperware
Tupperware is the name of a home products line that includes preparation, storage, containment, and serving products for the kitchen and home, which were first introduced to the public in 1946....
company in the early 1950s. The success of Tupperware was widely emulated.
Criticism
The party plan is criticized for exploiting social conventions in ways that embarrass "guests" into buying things they did not want.Purse parties differ, however, from these other parties in that the merchandise at purse parties consists of counterfeit knock-offs of popular, name-brand purses. Merchandise at American purse parties is usually bought in bulk from smugglers
Smuggling
Smuggling is the clandestine transportation of goods or persons, such as out of a building, into a prison, or across an international border, in violation of applicable laws or other regulations.There are various motivations to smuggle...
in New York's Chinatown or in Los Angeles' garment district and sold to unsuspecting customers at a significantly higher price, although still lower than the retail price of the legitimate product. These inferior smuggled goods have been linked to organized crime
Organized crime
Organized crime or criminal organizations are transnational, national, or local groupings of highly centralized enterprises run by criminals for the purpose of engaging in illegal activity, most commonly for monetary profit. Some criminal organizations, such as terrorist organizations, are...
and the funding of terrorism
Terrorism
Terrorism is the systematic use of terror, especially as a means of coercion. In the international community, however, terrorism has no universally agreed, legally binding, criminal law definition...
, so purse parties have become of interest to law enforcement
Law enforcement agency
In North American English, a law enforcement agency is a government agency responsible for the enforcement of the laws.Outside North America, such organizations are called police services. In North America, some of these services are called police while others have other names In North American...
. Selling such purses, with an imitation designer label, is a US federal crime called trafficking in counterfeit goods, even if the seller tells the buyer that the purse is a fake.