Tupperware Overview
Tupperware Brands Corporation manufactures and sells household and beauty products through an independent direct-sales force, mainly through home parties. Its headquarters is based in Orlando, FL. Currently Tupperware Brands Corporation has 2.3 million salespeople in nearly 100 countries. Products are also sold at Tupperware’s website and are credited to a salesperson.
The company was founded in 1946 by Earl Tupper as a way to market containers made of long-lasting, yet pliable polyethylene plastic. Tupper’s airtight bowls that seal with a burp allowed homemakers to keep food fresher longer for the first time. The product line struck a chord with housewives across the nation and benefitted from a renewed focus on the home and family as well as the historic Baby Boom that began after World War II. Since then Tupperware home parties have been an enduring tradition and the main source of sales for the company’s network of independent distributors.
Today’s Tupperware product line contains a wide array of household products for the kitchen as well as a line of beauty and personal care products.
Vision, Mission, and Goals
The company’s vision, mission, and goal is “to be the premier global direct seller of innovative, premium products.” The 3 ways by which they strive to accomplish this mission are:
• To provide their customers with “high quality innovative products . . . through an informative and entertaining selling situation.”
• To provide their independent sales force with a “pathway for personal development and a significant earning opportunity.”
• To provide their associates with “an opportunity to develop and utilize their talents and skills and to be recognized and rewarded for it.”
In order to achieve their vision, Tupperware has created a strategy for growth that is “dependent on building capabilities in the five areas that are important to our sales force.” These 5 areas as described on their website are
• Creating a meaningful earning and growth opportunity
• Being a trusted brand for products and opportunity
• Offering an entertaining and simple selling situation
• Providing “take you by the hand” training
• Giving “take your breath away” recognition
Company Management
Today’s Tupperware leadership group is headed by E.V. (Rick) Goings, Chairman and CEO. Simon Hemus is President and COO, and Michael Poteshman serves as EVP and CFO.
The company’s founder, Du Pont chemist Earl Tupper, sold Tupperware in 1958 to Rexall for $16 million. Since that time, the Tupperware brand changed hands a few times until eventually spinning off on its own.
Tupperware Products and Services
Tupperware manufactures and sells a wide range of household, beauty, and personal care products.
On the household side, Tupperware makes food preparation, serving, and storage solutions. They also have several beauty and personal care product brands including Armand Dupree, Avroy Shlian, BeautiControl, Fuller Cosmetics, NaturCare, Nutrimedics, Nuvo, and Swissgarde.
Tupperware Compensation Plan
Tupperware is sold through a direct sales force. Entry-level consultants begin by purchasing a starter kit for either $79.99 (a business kit) or $119.99 (an executive kit) and are expected to achieve personal sales of $250 within 4 months. Tupperware consultants need not maintain an inventory; however, they are encouraged to purchase samples for use in demonstrations during Tupperware home parties.
Consultants earn a 25% commission on all of their personal sales as well as bonuses for reaching certain sales levels. The first bonus payout is at the $1,200 monthly sales level. Consultants who reach this level get a 5% bonus on their sales. The next bonus payout, a 10% bonus, occurs when their monthly sales volume reaches $3,200 monthly sales volume.
Another part of Tupperware’s compensation plan is a series of royalties earned on the sales made by consultants’ recruits. In fact, the more recruits the Tupperware consultants bring on, the higher their rank in the company and the higher total compensation they earn.
Once consultants recruit 3 new team members and achieve $500 in monthly personal sales volume and $2,000 in group volume, they become managers and earn royalties of 4% to 8%. The percentage of the royalty is based on the number of recruits the managers have personally signed up in a given month. With no new recruits in a month, managers still received a 4% bonus. However, with 3 new recruits, the maximum bonus payout of 8% is achieved.
The director level is above the Manager level. The requirements for becoming a director are recruiting 9 consultants and having a team monthly sales volume of $10K. Royalty payouts range from 6% to 12%. Director Development Bonuses are also given out at the Director level and above.
Public Record
Tupperware Brand Corporation is a publicly traded company listed on the New York Stock Exchange as TUP. As of May 19, 2010, its stock was $44.32 a share. Its 52-week high as of that date was $54.15; its 52-week low, $23.06. Tupperware employs 12,900 people at its Orlando, FL headquarters.
Tuperware revenue decreased from $2,161,800,000 in 2008 to $2,127,500,000 in 2009. However, the company experienced significant revenue growth from 2007 when sales were $1,981,400,000. Its gross profit margin has improved from 64.9% in 2007 to 66.2% in 2009. Its net profit margin has increased as well, from 5.9% in 2007 to 8.2% in 2009.
Surprisingly, the Better Business Bureau rates Tupperware as an F. In the last 36 months, there have been 40 complaints with 19 of those in the last 12 months.
Of those, 2 complaints were advertising issues that were resolved, and one was a service issue that shows a status of “company did not respond.” It appears that most other complaints were resolved. There was no evidence of any pending lawsuits as of May, 2010.
Miscellaneous Notes
Tupperware is facing increasing competition from retail outlets with similar, affordable products as well as from a growing market-oversaturation problem.
Although there are cases of consultants who are able to earn full-time incomes as independent Tupperware salespersons, this is not the norm. Typically, Tupperware consultants can expect to earn an estimated $100 to $150 per party. Average sales per consultant—calculated from Tupperware’s reported sales divided by number of consultants—were $1,069.43 in 2007; $949.06 in 2008; and roughly $886.46 in 2009.
If you want to earn some extra money to pay for everyday expenses, Tupperware might be a good option for you. However, as indicated above, the odds are stacked against being able to earn a full-time, executive level income.
