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ARTICLE InspirationJuly 27, 2015

How to grow a multi-million-dollar business from the comfort of people’s homes

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Image: Lorraine Lea

Lorraine Lea combines the personal touch of home-based party plans with the convenience of online batch credit card payments via its MyLinen iPad app. Find out how this homewares and linen company has gone from a small family-run business to turning over more than $40 million a year.

Almost 70 years ago, an inventor in the US was searching for a way to sell more of his products. The standard approach of simply putting his items on the shelves of bricks-and-mortar stores and hoping that consumers would pick them up and buy them simply wasn’t working for any of his new inventions.

With sales stagnant, he needed a new approach…

That was when Earl Tupper stumbled upon the idea of taking his products into homes via social get-togethers or parties, usually hosted by stay-at-home housewives.

Tupper was, of course, the creator of Tupperware, and his idea of taking products directly into consumers’ homes is as popular and relevant today as it was all those years ago – as Australian homewares and linen company Lorraine Lea proves. 

Party-plan model meets online payments

Lorraine Lea operates a traditional party-plan model that sees its sales force of 1,400 independent stylists demonstrating products via social gatherings in people’s homes. It has, however, taken the business to the next level by combining the personal approach with a convenient online payments solution via an iPad app.

Adrian Ryan, Company Director, says that a Lorraine Lea party is held in Australia the equivalent of every 10-and-a-half minutes – and with every party generating an average of seven orders, it is easy to see how the sales can quickly add up. 

Image: Lorraine Lea

Batch payments via the MyLinen app

In fact, Lorraine Lea now processes about $40 million worth of credit card transactions a year, primarily via its native MyLinen app. This allows its independent stylists to take orders and credit card payments via their iPads. Orders are then automatically downloaded via a SecurePay batch payment once the stylist is back in a wi-fi area – usually when they get home after a party.

This brings significant benefits for the independent stylists and has allowed them to seal more sales by accepting credit card payments quickly and easily.

“Our business is all about making processes simpler and easier for our independent stylists,” says Ryan. “The MyLinen app was launched a year and a half ago. Before that, we were only processing a few credit card payments, but today more than 92 per cent of payments are made with credit cards. This saves about 30 per cent of the stylist’s time.”

Ryan adds that 24 per cent of orders are paid in full at the time of the party.

“Batch payments offer us an economical and cost-efficient way of processing payments,” says Ryan, adding that once the batch payment has been processed, which is usually the day after the party, the order is released at the warehouse and shipped to the party host for distribution.

As with the Tupperware system, party hosts receive free and discounted Lorraine Lea products in exchange for hosting an event at their home. 

My father worked in retail but he was always frustrated with waiting for the customers to come to him in retail stores – he wanted to take products to the customer."

Adrian Ryan, Lorraine Lea Company Director

The power of the party-plan business model

While the convenience of being able to take online credit card payments from the comfort of people’s homes is clear, why has the party plan been such a successful approach for Lorraine Lea? Ryan says a number of factors have contributed to its growth trajectory.

First, it all started with Ryan’s parents’ passion for demonstrating products to potential customers.

“My father worked in retail but he was always frustrated with waiting for the customers to come to him in retail stores – he wanted to take products to the customer,” he explains. “They started in Mount Waverly in Victoria in 1985 with $50 and they began holding their first [Lorraine Lea] parties in Geelong and the surrounds. It allowed them to demonstrate the product and showcase it in homes.”

The ability to see a product in a home remains highly popular, and the success of renovation shows such as The Block has boosted Australians’ interest in home styling and shopping for their homes.

The second reason for Lorraine Lea’s strong growth is the party-plan model itself. Party plans continue to offer the chance to socialise with friends and family members, catch up on local gossip and news and provide valuable “me time” away from the demands of families and work. Combine that with the convenience of shopping in the comfort of a home environment and it is easy to see why party plans remain popular.

The third reason is that party plans remain a practical way for women to earn money, even while they are maternity leave or raising young children. Ryan believes the revenue-earning opportunities and flexible hours of a home styling business gives parents the chance to be at home with their children while fostering a rewarding, long-term career.

“Some of our independent stylists join as a career move,” he says. “Our highest-level stylists earn in excess of $200,000 a year. Others join to put good-quality food on the table, while others do it to achieve a family goal like a new car or holiday. Because it is a social industry, it gives our stylists the opportunity to meet new people and network with other people in their area, while also earning a great income.”

Looking ahead, Lorraine Lea will continue to embrace technology and e-commerce opportunities in the party-plan model, says Ryan. “We are highly focused on technology, are keeping pace with the general marketplace and online shopping experience and matching the logistics of web shopping.”

Plus, Lorraine Lea has expanded its online presence this year with the launch of its informative new styling blog and the growth of social platforms, Instagram and Pinterest in addition to its vibrant Facebook community. 

Did you know?

SecurePay offers batch payments, as well as a host of other online payment solutions. 

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