Avon’s 2010 Annual Report

In March of 2011, Avon published its 114 page 2010 Annual Report. This article is not a listing of those figures, but a highlight of what Andrea Jung, the CEO of Avon wrote in her introduction to the report, along with how it affects me and other Avon representatives.

Andrea Jung, CEO of Avon

Jung’s rise to fame is a story in itself. In a male dominated business, she became the first female CEO of Avon. Now only 52 years old, she has been the CEO of Avon for eleven years. She has an impressive history of achievements including being listed at number eight in “Corporate America’s 50 Most Powerful Women” in 1998. She became chairwomen of Avon in 2001. Currently she is listed in the top three.

A $10,000,000,000 business

In 2005, Avon was an eight billion dollar business. In the six years I have been in Avon , it has grown to be an eleven billion dollar business. Avon currently has more than 6.5 million representatives in more than 100 countries. In February 2011, Avon announced a “comprehensive management realignment to enhance the company’s operational rigor and better position us to execute more effectively across the portfolio.” This is not new in the United States as management changes have been taking place for a couple of years. This has streamlined Avon management and made Avon stronger and better for its representatives. However, major changes in management are taking place Asia and Europe .

Skin Care is backbone of business

Skincare has always been the backbone of Avon ‘s business. In the report Jung said, “Skincare is a key priority for 2011. In the value segment, we are launching Avon Care'”a comprehensive line of skincare and body products targeted for developing markets. In the mass segment, we are revitalizing Avon Solutions with revamped formulas, brand and packaging.” Avon has already begun to bring back the old standbys all my customers were asking for, such as Cold Cream Cleanser and Silicone Glove. These are the cheaper versions of skin care. With prices ranging from $3.99 to $64 for facial creams, every person can now find a skin care product in their price range.

But Jung reported, “6.5 million Avon Representatives serve more than 300 million customers in over 100 countries. …They have sold one billion dollars of ANEW (skin care), and they have made Avon number one in mass fragrance worldwide.” Anew is the premium anti-aging regimens and treatments. This skin care line is formulated to help women of all ages with moisturizers and cleansers. Although it is age labeled, you choose by the “age of the skin,” not the age of the person. Anew Clinical is a skin care line that targets specific concerns and includes such products as wrinkle correctors, dermabrasion and brightening serums. Avon has color-coded the products to make it easier to recognize.

This wide array of prices will help drive sales for me in the depressed economy we have in my local area and I was glad to see Jung report, “in 2011 we are shifting some money away from advertising to field programs that enhance the value proposition for our Representatives across both our developed and developing markets” and that Avon has “launched new advertising in the U.S. as well as the U.K. to promote the benefits of shopping through the direct-selling channel.”

Multi-Level Marketing Leadership Program

Having a business degree, I was very familiar with Multi-Level Marketing, so as a stay-at-home mom with disabilities, I jumped at the Avon opportunity. In other words, I joined Avon because of their leadership program. I did not join to sale Avon , but as with any MLM, everyone has to sale the product. Currently the earnings level in sales range from 20% to 50% based on the size of the campaign order. There are 26 campaigns a year.

The leadership program has changed in the six years I have been in Avon , but it just keeps getting better and better. My husband and I live off our Social Security and my Avon profits, so I am proof “doing Avon ” is great for older people. The current leadership program was changed in March of 2011, to allow a leadership representative to earn money recruiting, as well as off their downline sales. The percentage commission ranges from 3% to 12% of the leadership sales, with additional benefits in the higher levels.

Currently there are four levels of leadership: Unit Leader, Advanced Unit Leader, Executive Unit Leader, and Senior Executive Unit Leader. SEUL are those that earn “car bonuses.” Depending on the incentives, you can earn cash, televisions, trips, and other prizes. These prizes are for all levels of sales and leadership, so I was happy to read that Avon is “investing $20 million in 2011 to improve Sales Leadership earnings.” Avon is “also evaluating significant longer-term changes to our Sales Leadership model to include more leadership titles and levels, increasing the overall compensation opportunity.”

On-line stores for representatives

We were placing our orders online in 2005 when I first joined Avon , but they have already added many more web-based tools for us. eReps are now able to have their own web-based store, totally maintained by Avon , so we can compete with other online stores. A customer can go to my website and look at a ebrochure or search for a product, place the order and have it delivered by their local representative or they can pay for it with their debit or credit card and have it delivered to their front door by UPS anywhere in the United States . Avon recognizes the online benefits as Jung said, “Our focus now is on driving broad-based geographic coverage and usage of these tools.”

Avon listens to feedback from representatives

Avon recognizes there are more changes that are needed for the representatives. Advance Unit Leaders and above have monthly mobile conference calls to give feedback from both customers and downline representatives. Avon obviously listened, as Jung said, “we launched a major new initiative to transform the service proposition for our representatives and customers. We are taking an end-to-end look at their entire Avon experience. This includes order submission, product availability, product fulfillment, returns and customer service.

Avon sales brochure largest publication in the world

Jung stated, “The Avon sales brochure is the largest publication of any type in the world.” I never really thought of it, but when compared to other sales catalogs, she is right. This does not take into account that you can sell out of the current 170+ page brochure, plus the past two brochures, as not everything Avon offers is in the one catalog, plus there are sales flyers, Mark brochures, and now Tiny Tillia “Storybooks.”

Breast Cancer and Domestic Violence Programs

I was really proud that, she pointed out, ” Avon is also a powerful force for social good.” There are certain products that Avon representatives sell they receive no earnings from. The profit from these sales go into the foundation programs, such as Breast Cancer and Domestic Violence. As Jung commented in the report, “We have raised and awarded more than $800 million to causes that improve women’s lives. We are the largest corporate supporter of the breast cancer cause and a leader in the fight to end violence against women.”

CEO donates her long-term bonus award

And Jung backs up her beliefs in cold hard cash. From M.I.S.S. comes this related news, “In a time where executive bonuses are a hot topic, Jung’s personal donation is a welcome change from stories of exorbitant bonuses and corporate funds being used for questionable reasons. On March 15, 2011 , Avon announced their CEO and chairwoman would donate the entire after-tax proceeds of her $5,362,500 long-term bonus award to the Avon Foundation for Women . The amount will be approximately $3 million and the foundation’s largest personal donation to date. Andrea Jung is already known for work with and support of the Avon Foundation, even receiving the Global Citizen Award last year for Leadership in the Corporate Sector. This personal donation further shows Jung’s leadership, perhaps inspiring other executives to rethink where their wealth goes.”

Avon ‘” The Company for Women… and a few good men!

All of this and more makes me proud to be an Avon representative. Being proud of the company is only one reason why 6.5 million Avon representatives are making Avon the #1 company in Direct Sales year after year. Avon really is the company for women… and a few good men. Come join me today.

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