The Party That Crashed Retailing.

WASHINGTON (D.C.); CINCINNATI (Ohio); OHIO; UNITED States

BERKSHIRE Hathaway Inc. 001024314 BRKA; PAMPERED Chef Ltd. 025691358 ; TOMBOY Tools Inc. ; BODY Shop International PLC ; MARY Kay Cosmetics Inc. 011508046 ; PURE Romance Inc.

The article reports on the success of direct selling at home parties. At a Cincinnati party, 11 women in their late 20s and early 30s will have laughed themselves silly and shelled out a total of $1,200 for the potions and nighttime power tools offered by a distributor for Pure Romance. The sex-toy purveyor, with sales of $30 million last year, is one of a large and varied collection of vendors who sell through multilevel marketing in private homes. Pâté, pet food, saws, scrapbooks, air filters, legal services, expensive apparel, wine and golf clubs are being sold the same way as Mary Kay cosmetics. While retailers try all sorts of tricks to lure people into stores, direct selling is on something of a tear, outpacing retail sales by an average of 1% a year over the past ten years. In 2003 direct sales hit $30 billion. Of that, party plans accounted for 28.5%, up from 26.3% five years before, says the Direct Selling Association in Washington, D.C. Some companies, such as the Pampered Chef, a cookware vendor owned by Berkshire Hathaway, use in-home parties as their sole sales channel. The Body Shop, with $712 million in fiscal 2003 sales, three years ago started signing on individual distributors and urging them to throw in-home parties as a way to market its soap and cosmetics--and distributorships--in the U.S. Cataloger Lillian Vernon now has a party operation. Products best suited to the party circuit are those that need explanation. Case in point: Tomboy Tools for women. Company President Sue A. Wilson knows women often feel uncomfortable buying hammers, drills and the like from huge hardware stores.