The party plan is a method of

marketing Marketing is the act of acquiring, satisfying and retaining customers. It is one of the primary components of Business administration, business management and commerce. Marketing is usually conducted by the seller, typically a retailer or ma ...

products by hosting what is presented as a social event at which products will be offered for sale. It is a form of

direct selling Direct selling is a business model that involves a party of people buying products from a parent organization and selling them directly to customers. It can take the form of either single-level marketing (in which a direct seller makes money pu ...

. The primary system for generating

sales lead In marketing, lead generation () is the process of creating consumer interest or inquiry into the products or services of a business. A lead is the contact information and, in some cases, demographic information of a customer who is intereste ...

s for home party plan sales is the home party itself: the salesperson uses the home party business model as a source for future business by asking attendees if they would like to host selling parties, too. Direct selling through the party plan typically uses

multi-level marketing Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial and sometimes illegal marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salarie ...

(salesperson is paid for selling and for sales made by people they recruit or sponsor) rather than single-level marketing (salesperson is paid only for the sales they make themself). This plan has been used primarily to sell items whose main appeal is to women by women, such as kitchen utensils,

home decor A home, or domicile, is a space used as a permanent or semi-permanent residence for one or more human occupants, and sometimes various companion animals. Homes provide sheltered spaces, for instance rooms, where domestic activity can be pe ...

items, jewelry, cosmetics,

handbag A handbag, commonly known as a purse in North American English, is a handled medium-to-large bag used to carry personal items. It has also been called a pocketbook in parts of the U.S. Terminology The term "purse" originally referred to a smal ...

s, and similar products. Recent additions to the field include

lingerie Lingerie (, , ) is a category of primarily women's clothing including undergarments (mainly brassieres), sleepwear, and lightweight robes. The choice of the word is often motivated by an intention to imply that the garments are alluring, fashio ...

, wine, and

sex toys A sex toy is an object or device that is primarily used to facilitate Sexual stimulation, sexual pleasure, such as a dildo, artificial vagina or Vibrator (sex toy), vibrator. Many popular sex toys are designed to resemble human genitals, and ma ...

. Sometimes a combination party is held, at which a wide variety of such merchandise is offered for sale.

How it works

In this system, representatives of the sales organization, usually women, approach other women about hosting a social event in their homes during which a product will be demonstrated and offered for sale to guests. In consideration, they will be given hostess gifts and a portion of the proceeds from the amount of goods sold. Frequently all in attendance will be given a token item of nominal value as an incentive to attend. At the event, the salesperson displays and demonstrates various products. She then takes orders from attendees. The salesperson is almost always paid solely a

commission In-Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of anot ...

on sales. If the salesperson has recruited other sales people into the organization, then she also receives a commission based on her recruits' sales.

History

The party plan is regarded as primarily the invention of Norman W. Squires, who developed it for Stanley Home Products in Westfield, MA, which company was founded by Stanley Beveridge and Catherine O'Brien in the mid-1930s. Mr. Beveridge and Ms. O'Brien were former employees of the Fuller Brush Company, which sold its products with door-to-door salespersons.

Criticism

The party plan is criticized for exploiting social conventions and pressuring "guests" into buying things they do not want. Purse parties that are not done through a dedicated program by the manufacturer differ, however, from these other parties in that the merchandise at these parties often consists of counterfeit knock-offs of popular, name-brand purses. Merchandise at American purse parties is usually bought in bulk from

smugglers Smuggling is the illegal transportation of objects, substances, information or people, such as out of a house or buildings, into a prison, or across an international border, in violation of applicable laws or other regulations. More broadly, soc ...

in New York's Chinatown or in Los Angeles' garment district and sold to unsuspecting customers at a significantly higher price, although still lower than the retail price of the legitimate product. These inferior smuggled goods have been linked to

organized crime Organized crime is a category of transnational organized crime, transnational, national, or local group of centralized enterprises run to engage in illegal activity, most commonly for profit. While organized crime is generally thought of as a f ...

and the funding of

terrorism Terrorism, in its broadest sense, is the use of violence against non-combatants to achieve political or ideological aims. The term is used in this regard primarily to refer to intentional violence during peacetime or in the context of war aga ...

, so purse parties have become of interest to

law enforcement Law enforcement is the activity of some members of the government or other social institutions who act in an organized manner to enforce the law by investigating, deterring, rehabilitating, or punishing people who violate the rules and norms gove ...

. Selling such purses, with an imitation designer label, is a US federal crime, even if the seller tells the buyer that the purse is a fake.Counterfeit Bags May Have Links To Organized Crime, Terrorism
''Milwaukee News'' 8 May 2003

References

{{reflist Direct selling Parties Retail processes and techniques