In 1946, Earl Tupper released his first patented airtight container, which he called 'Tupperware'. He felt that the best way to make sales was to demonstrate how the new concept worked, and how it could be used.
By 1949, his idea for demonstrating products had evolved into the direct selling model we now know as the 'Tupperware Party'. It did not take long for Tupperware to become known as the ideal opportunity for stay at home moms looking to make a little extra income.
When it comes to network marketing, we think you can't make money with multi-level marketing. Tupperware has a distinct advantage over most MLMs in that there is a noticable retail market for Tupperware. Like most married men, I can say that I've seen more than a few dollars worth of Tupperware in my own kitchen. This lead me to wonder if Tupperware was different, maybe the ladies hosting the parties were making a good living. We decided it was time to take a streetonomic review of Tupperware to see if the sales force is making money.
Is Tupperware Better than other MLMs
The key difference between Tupperware and most other direct marketing companies is that their business model focuses on making retail sales. The goal of the Tupperware party is to sell Tupperware products to retail customers. This gives them a significant advantage over other MLMs who rely mostly on their members to consumer their products.
Tupperware products are good quality and last a long time, I know this from personal experience. A selection of Tupperware containers appeared in my kitchen a little over 2 years ago. Despite the frequent use all of our Tupperware containers are still in perfect condition, with all lids still locking on as tightly as ever, we have not had to replace any of our Tupperware.
Unlike most MLMs that we have looked at, Tupperware doesn't try to pretend that the business is not about making sales. When new members join the Tupperware sales force, they are given a copy of the Tupperware Business Binder, which contains some basic sales training. Tupperware consultants know that to be successful in MLM, you need to sell lots of product.
Unlike most MLMs, Tupperware does not sell products which need to be replaced on a regular basis. Most MLMs focus on products such as cosmetics or diet products, which if used, will need to be replaced regularly. The company can make repeat sales to the same customer every month until they stop being a customer. Tupperware products do not require frequent replacement so it will be unlikely that you will have customers who make regular purchases. In order to make regular sales, Tupperware consultants need to constantly prospect for new customers
Are Consultants Making Money with Tupperware
To answer this question we started on the Tupperware Investor Relations page, which shows some of the financial highlights achieved by Tupperware in 2015. One of the slides shows that Tupperware made $2.3 Billion worth of sales, and had a sales force of 3.1 Million consultants. We then went back to the Tupperware business binder and found that consultants can earn up to a maximum of 35% commission on their personal sales.
After doing some calculations, we believe that most Tupperware consultants are not making enough sales to earn a substantial income. Even if they all earned 35% on every sale, then the average commission paid to Tupperware consultants in 2015 would have been $260 for the entire year. That's less than $22 a month. The Tupperware financial data and our calculations are shown in the table below:
Tupperware offers a well recognized high quality product, and keeps the focus on making sales. Despite this, most consultants are not making money. We believe that this is because multi-level marketing does not work unless you are at the top of the pyramid. It is however very profitable for the company selling the products with high margins.
The 35% commission on personal volume is only part of what you can earn with Tupperware. There is also the opportunity to earn royalty bonuses from the sales made by any new members you recruit. We wanted to know if anyone in the Tupperware network is making a profit. We looked at the Canadian edition of the 2016 Tupperware Income Disclosure Summary. We found that 96.88% of Canadian Tupperware consultants were paid less than $500 in 2016.
There are some Tupperware consultants who are earning a good living in Canada. The same income disclosure summary showed that a total of 22 consultants earned more than $50,000 over the same time when 96.88% earned less than $10 a week. The consultants who earned this level of income represent 0.06% of the Canadian Tupperware Sales Force. Statistically, your chances of earning a good income with Tupperware are 1 in 1,667
Why is it Difficult to Make Money with Tupperware
Despite having quality products and a culture which focuses on retail sales, most Tupperware consultants will not make a significant income. We believe that this is because network marketing does not make money for members. The system is great for the product providers. They get a loyal customer base who is willing to buy directly from them and pay significantly more than what a traditional wholesaler would pay for the same products.
Like all MLMs, recruitment of new members plays a large part in the Tupperware compensation system. Once you start building a team, your potential to earn income is no longer based on just your own sales. You can also make commission from the sales made by those who you have introduced to the system. The more members you recruit, the greater your opportunity to earn from their sales activities.
Network marketing companies are willing to let anyone sign up and 'become part of the opportunity'. Existing members have a vested interest in recruiting as many new members as possible. This inevitably results in the MLM sales force grows at an unsustainable rate. There are too many salespeople, and not enough customers. For most consultants there won't be enough sales to earn a decent living.
In their training, Tupperware will teach new consultants to prospect their parties for both sales and for opportunities to sign up new recruits. Ironically, signing up new members is not what's best for their own business. Every time a new consultant joins Tupperware, they are competing with all the existing Tupperware consultants to find customers, host parties, and sell Tupperware. Every new recruit reduces your chances of making future sales.
For example, if you have successfully run a party, and recruit a new Tupperware consultant from the attendants, then your chances of making direct sales or getting referrals from this group has halved because the new recruit will be trying to make sales within the same circle of influence. You could make some commission if the new recruit makes sales, but you'd earn more if you make the sales yourself.
Is Tupperware Like a Franchise
Network marketing companies often compare themselves to successful franchises such as McDonald's. They'll explain that when you join, you can duplicate the successful business model and leverage off the success of the existing brand name. While this is partially true, the network marketing model is different from franchising in key areas.
First of all, getting a franchise is not as easy as joining a Multi-Level Marketing company. Before you can open a new franchise, your application will need to be approved. The company will make sure that you are a suitable applicant with the necessary business skills, and they will need to approve the location of any new franchises.
If franchises operated the same way as direct marketing companies, then they'd let anyone open a new franchise anywhere they chose, even right next to existing stores. If Subway allowed three stores to open side by side, do you think any of them would turn a profit?
Network marketing companies make money when members buy their products. They don't care if the members themselves are making any profit. They will claim that their system can offer financial freedom to everyone, but they do nothing to ensure that everyone gets a fair share of the market or a designated territory. MLMs enable their members to cannibalize the market with too many sellers and limited buyers.
Are Tupperware Products Better Than Others
There is no doubt that Tupperware sell very high quality products. The only problem is that they are also very expensive. I could buy a small lunch container from Tupperware for $17, or I could buy a similar one from K-Mart for $3. Both products have lock on lids, are BPA free, and are microwave and freezer safe. The K-Mart option is slightly larger and is more than 80% cheaper.
Tupperware products might be stronger, last longer and have a lifetime guarantee, but they get lost just as easily. For Tupperware products to make financial sense, they'd have to last more than 5 times longer than the K-Mart alternative. I'd rather take my chances with the K-Mart brand. At least with them I can take them out of the house without getting a lecture about the importance of bringing them back home.
My Final Say
Tupperware is a great option if you want high quality plastic storage. If you are looking for an opportunity to earn a good income, then it is unlikely that you will find this from Tupperware. Like all direct marketing companies, there are a few people near the top of the system who are making a good living, but the majority of people who join will never earn enough to support themselves.