Avon is still benefiting from the 30% cap on the transformation of outlets

As of now, Avon has 90% of its stores transformed into service outlets, and the corresponding transformation is still in progress.

This week, Zhong Bin, Chairman and CEO of Avon Global, once again communicated with the heads of service outlets in Beijing and Shanghai. Yesterday, Zhong Binxin told the "First Financial Daily" that these responsible dot-coms who have been transformed from dealers can already accept the cooperation model between franchised stores and direct sellers. Zhong Bin thinks that the cooperation model between direct sellers and sales outlets has been very successful.

At the same time, Avon believes that the 30% cap is still profitable.

Store transformation business outlets

"At present, the transformation from specialty stores to outlets is still ongoing," said Gao Shoukang, president of Avon China. He told reporters that in addition to normal retail, the store must provide return and ordering services for all direct sellers in its service area. From the strategic model, in the future, we will focus on specialty stores, continue to do the original retail, and serve their customers. On this basis, the store will add a new direction to service outlets and serve direct sellers and direct sales in the region. Customer.

“These service outlets maintain normal retail sales on the one hand; on the one hand, they provide services to the direct sellers in the region, and the company will have some profit supplements. As a result, the relationship between direct sellers, Avon and service outlets has changed in recent months. Slowly build up and form." Gao Shoukang said.

According to reports, Avon is currently making some profit supplements to its business outlets. Second, in order to ensure the profitability of outlets, the company is planning to diversify its business outlets. To this end, Avon will launch a fourth-generation store this year, allowing the store to replace furniture as much as possible without spending money. In the future, it may also be possible to carry out updates on some specialty stores. At the same time, there is a substantial increase in advertising efforts.

Gao Shoukang said that there are now Avon stores that sell extra products at the same time they do extra fees for beauty. This will be the direction of the next diversified development.

“We also have a lot of persuasion work. We have more than 5,700 service outlets. We must talk about it and we must solicit their consent. It takes time.” Gao Shoukang said that 10% of the stores still need to persuade.

30% ceiling is still profitable

Statistics as of the end of June: Avon has recruited more than 110,000 direct sellers, and this number is still increasing. Gao Shoukang revealed to reporters that there are currently more than 30,000 sales staff who do not have perfect registration materials, and recruitment efforts will increase in the second half of the year. There are currently no specific plans for recruiting numbers.

"In terms of profitability, I also believe that there are many opportunities in the multi-level and single-tier, and now (China) is a single-tier, and this model is still profitable." Zhong Bin said.

At the same time, Gao Shoukang explained that 30% of the compensation is also feasible for salespersons: “If Avon’s direct seller orders are more than 2,000 yuan, they can get up to 30% of the profits. If it is 2,000 yuan, it’s 600 yuan. This is the minimum wage in many cities."

Gao Shoukang believes that direct marketing used to be the development of the offline and team rewards, and now China’s “new direct sales” is through the channels of direct sellers, and the products are delivered to consumers in the fastest and most “no intermediate exploitation” channels.

For this year's financial estimate, Zhong Bin said that in 2004 sales of 223 million US dollars, while last year's sales were 207 million US dollars. From the first quarter of this year's financial data, sales are still falling. However, stores in the first quarter remained profitable, so Avon will continue to support stores.

“The decline in sales was due to the fact that we are in a transition, and now franchise stores are waiting for the continuous development of the direct sales model. Everyone is watching. Now we have to do is provide continuous support, especially to provide support for franchise stores, and we will also Actively recruiting salesmen." Zhong Bin said.