What Tupperware’s money problems say about direct selling

Tupperware stock took a big hit on Monday after the company said late last week that it has doubts about its ability to “continue as a going concern.”

That’s investor-speak for having enough resources to function. Essentially, Tupperware is saying it needs money — and soon. The company also said it’s working with financial advisors to try to obtain that money.

Tupperware was invented by a chemist named Earl Tupper back in 1946. At first, people really didn’t get it.

“So very often people wanted to see it and touch it and feel it,” said Neil Saunders with the retail and consumer insights company Global Data. “They were products that needed to be demonstrated, in a way.”

Enter the Tupperware party, where sales force members — many of them women — would have people over and show them how Tupperware worked, including the raspberry sound of air being sealed out.

In recent years, though, Saunders said, that kind of direct selling has become a lot harder.

“Consumers have access to the internet now in a way that in the kind of ’50s, ”60s, 70s and ’80s they didn’t have,” he said.

As a result, fewer people are choosing to sell the products. In 2022, the size of Tupperware’s sales force went down 18% from the year before.

The company has been trying to move the party around — in October 2022, it announced it would start selling products through Target.

One goal was to get seen by young people who weren’t familiar with the brand.

However, many people already stocked up on kitchen storage at the onset of the pandemic to store all that sourdough bread we were making.

“When you buy a product that is good, you may not need to replace it that quickly,” said James Gellert, CEO of RapidRatings, a risk and analytics company.

He said that lean times like Tupperware is having used to be a lot easier to navigate.

Now, those businesses “all of a sudden have run into much bigger problems with tighter credit and higher interest rates, which makes the cost of that capital much higher,” said Gellert.

Tupperware’s money troubles are a problem not just for the company, but for the people who remain in its sales force, according to Neil Saunders of Global Data.

“Not only is it a potential loss of income, it’s also a potentially very difficult lifestyle to replace,” Saunders said.

He said direct selling allows a kind of flexibility that is especially useful for women because parties can be scheduled around other responsibilities like child care.

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