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How Avon Uses the Economy to Grow (and How You Can Too)

How Avon Uses the Economy to Grow (And How You Can Too)Do you by any chance pull up your nose at the mention of Avon? The company is worth $70 billion, with sales last year of over $10 billion. How much did you sell last year?

The secret to their success is surprisingly simple: in a recession, people get laid off. Those folks have time, and need money. That’s when outfits like Avon and Amway pounce. They offer the jobless masses a way to make money and be self-employed.

And they grow like crazy. Through outfits like Avon, Tupperware and May Kay, people with their own direct sales businesses sell around $30 billion per year.

Serious money.

That could be you. Seriously.

Wait! Am I suggesting you’re into multilevel marketing? Not at all. You’re helping individuals get ahead, financially or otherwise. In the past, the primary method for that happened to be multilevel marketing.

But things change.

Online marketing is replacing multilevel marketing in many ways. It’s the new way to offer individuals the chance to sell something to their own customers.

What You Can Learn From Multilevel Marketing

Online marketing is much better: it frees you from the constraints of geography and from the limited range of products you can sell. Instead of door to door, it’s phone to phone (or tablet to website – you get the picture).

Most of you are in the business of generating income from the internet and/or helping others do the same, and there’s something you can learn from those who figured out how to make multilevel businesses a $30 billion industry.

No, it’s not using deceptive or high-pressure tactics.

It’s the way they utilize the economy to grow.

Multilevel marketers get their highest growth in times of recession, and so could you. Nothing motivates someone to look for ways to make money like losing their job. And that’s what you offer, right?

So, you should be licking your chops for the next recession.

But wait, aren’t we still in one? Nope. Far from it. In fact, we’re closer to the next one than the last one. See for yourself:

Four season strategy economic cycle

Economic cycles through the years (click image to enlarge)

You’ll notice four things:

  1. The duration of a single cycle (bottom to bottom) is 7-10 years, almost like clockwork.
  2. The downturn leading to the bottom happens about 2 years before the bottom.
  3. The last bottom was in 2009.
  4. The next downturn should therefore start 5-8 years after 2009.

You’re good at math: when is 5 years after 2009? That’s right — we’ve just entered the window for the next downturn.

Will the economy hit a downturn this year, then? Nobody can ever tell for sure. But I don’t think so, mainly because it has taken us so long to get out of the last recession.

But being prepared beats wishing it never happened, right?

How do you prepare?

Playing Recession Defense

The number one killer in a recession is debt. You can cut your expenses by living with family and eating bread and water, but you can’t cut your debt payments. So the number one preparation for the coming recession is getting rid of your debt, and not add any more.

The second defensive thing to do as an entrepreneur is be careful how you expand your business. Taking on overhead is as bad as taking on debt. Your revenues might drop when your customers’ incomes get hurt. If that happens, you’re going to have to let some of the people you just hired go.

And what are you going to do about that expensive new software service you signed up for? What’s done is done, but you need to be careful about adding any new overhead until the next recession has passed.

How will you know what to expect and when to expect it? The Four Season Strategy offers you a free description of how to look at the economy and figure out what to expect. We also offer a quarterly newsletter (paid) which keeps you abreast of the economy.

Here’s the big problem with this thing we call the economy: your business moves at the speed of light. But the economy moves like a glacier: infinitely slowly, but crushing everything in its path. Watching it is like watching paint dry. “Everyone” thinks they can pull that off — the same “everyone” who got blindsided by the last recession.

We watch the glacier and give you ample warning of where it is, what’s coming, and how to get the most out of it.

Playing Recession Offense

My buddies who dig the Four Season Strategy all started out appreciating the defensive value of the program. But what they like most today is the value for offense: if you know what to do in each phase of the economy, you can triple or quadruple your net worth in times of recession.

Example: my good friend Steve (amazing how friends become good friends when you help them like this) has followed the Four Season Strategy for more than twenty years, and has (literally) made millions. Recently he and his family sold one of the biggest shopping centers in Idaho in the proper season of the economy, only because he used the Four Season Strategy. Last week he told me he can buy it back for just over half what he sold it for.

When you view the phases of the economy with an offensive mind, you know when to expand, and how to do it at the lowest cost, while your competitors hurl themselves in the path of the glacier.

As you saw above, the next recession is going to bring you masses of people hungrily looking for new ways to make money. Avon and Amway launch major recruitment drives in a recession. How can you do that? What does a recruitment drive look like for your business?

Now is the time to be on offense.

Just by following the Four Season Strategy, you can double or quadruple you business for next to nothing. This tactic ends up being even more valuable than the defensive value of sidestepping the recession glacier.

But you need to know where you are in the economic cycle in order to prepare for it’s shifts.

Preparing for Your Bonanza

How do you prepare to reap the coming bonanza?

1. Your Products

By products, I mean whatever it is you charge money for. You’re coming up on a quantum wave of people in the next recession wanting to start an online business. If you get your income from helping those people, now is the time to add offerings targeting people who just got laid off, which start off at a low price and, with success, works them “up the ladder” as they achieve success.

2. Your Exposure

Where will people who lose their jobs look to make extra money? Where do Avon and other network marketing firms advertise in the tough times? What’s the online equivalent of those media?

That’s where you need to be visible by commenting or guest posting.

People who lose income need to see your offerings. It’s your challenge to figure out where. The good news is you probably have a year or two to get established in those media as an expert.

But that also means you have to be patient as you build that source of business – those layoffs probably are not going to happen this year. When they happen, it’s too late to start, so now is the time to lay the groundwork.

3. Your Pricing

At the moment, you can probably price your offerings nice and high, because the economy is still good. Don’t fall too in love with your premium prices, though, because when times get tough many prospects will pass because they have to tighten their belts.

My wife likes to eat at the Bonefish Grill. In the recession, they ruthlessly cut their menu prices, not for a moment fearing that their brand image would be cheapened. Their restaurants were the only ones in our neck of the woods (besides McDonald’s) which were packed every week. As the economy recovered, their prices went back up, and they’re still packed (at least the ones around us are).

When the parrot hits the fan, don’t be afraid to offer specials to keep customers coming. But when the economy improves, don’t be afraid to line up those premium products and prices again.

In Summary

The economy affects your business more than you think. You’re probably doing well now. Don’t be lulled into sleep. Millions of business owners used to say “Oh, recessions won’t affect my business.” The only ones who say that now are the ones who started after the last recession did its damage (or were too small to be affected).

Never underestimate that glacier. As the old song says: “Many men did, and many men died.”

You can’t change the economy, but you can be smart and take advantage of every phase of each unfolding cycle. The ones who do make millions; the others wonder what hit them …

About William Cowie

William watches the slow-moving economy for fast-moving businesses through his Four Season Strategy website.

9 thoughts on “How Avon Uses the Economy to Grow (and How You Can Too)

  1. Hello William,

    Some brilliant insights presented here.

    Especially about the economic cycles, which for some reason
    people tend to forget.

    Cheers,

    Ray Khan

  2. Great points. As business owners we’ve gotta be forward looking at the economy – regularly scanning our external environment to see how it will effect both our customers and the way we operate our business. We can’t be so busy working, that we miss the signs.

  3. In Croatia, economy has been in downturn since 2008., and now you we could expect even bigger downturn? :S Plus, this year we’ve focused on foreign markets like US, etc., to pull up from the recession, and now I read this… Sorry for the comment, but we are cutting on our costs for years, and now are hoping to be able to breathe more freely… this wasn’t very encouraging :S

    • Mirta, I didn’t mean to sound pessimistic, because I’m not. Nobody knows the future, but I believe there are still a couple years left in this rebound.

      The point, however, is (as Sonia says) to look ahead and understand what’s going to happen in the future. Downturns always follow upturns, and upturns follow downturns.

      And smart businesspeople prepare to take advantage of whatever the economy throws their way…

  4. Hello William, thanks for this post. I must admit, this is the only time I even dared to understand what economic cycles are so I give you props for explaining it very simply.
    Another thing I really liked is how you used Avon’s strategy to inform people how they can take advantage of the recession too. It’s good information.
    Nonetheless, I feel dreary this 2014 knowing that the economy will take a dip this year. Oh well, we all just have to survive the year.

  5. I agree with Azalea, you explained this concept really well and it’s usually not something I understand. I really appreciate the fair warning and you’re absolutely right on about the actions to take.

    We were considering getting another new car payment this year now that our one car is paid off but I think we’ll play it cool and get a used one instead.

    But besides that I’ll be looking at ways to beat any downturn in my business too. Will definitely be prepared for this one. Thanks again!

  6. William, this is a very encouraging article. It is so true that most of the biggest and most powerful businesses in the world were actually started in the depths of recessions. I have to admit that up at the top there I was dreading an exhortation to start the multilevel marketing tactics that have given internet marketing such a bad reputation over recent years. I am so glad I carried on reading 🙂 There is an irony here that, as you so skillfully point out, in order to thrive in the face of a slow moving glacial process you need to be lean and agile! I picture a crampon equipped mountaineer clinging to the slippery face of the glacier that moves imperceptibly! 🙂 To extend the metaphore, you need to make sure you have plenty of belays and a good support team back at base camp but essentially the online world gives us the freedom to move anywhere at a moments notice to take advantage of the smallest hand-holds.

  7. Me, too. It is wonderful having a bit of understanding about this. I do grasp “buy low; sell high” which is the opposite of what we might end up doing.
    However, the predictability is news to me. I thank you!

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