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Newsflash for women working from home! Avon and Silpada are getting married.

Avon Products recently announced its acquisition of Silpada Designs. At a purchase price of about $650 million, the price tag alone speaks volumes about their business success.

Hard to believe Silpada got its start when two school moms met at their children’s classrooms. Avon’s purchase demonstrates its commitment to expanding its product line beyond cosmetic and beauty goods. Those lines were already successful, generating about $10 billion in sales for Avon in 2009.

Silpada Designs’ annual sales are estimated at approximately $230 million. Avon’s stock rose by 15 cents a share upon news of the partnerships. Previously down by nearly 10%, obviously the public considers the outlook positive. Avon is not going out on a limb financially to purchase Silpada.

Avon cash inventory was greater than $1.1 billion as of the end of March, 2010. Cash reserves will remain strong.

Despite the purchase, the businesses will function independently.

Avon already has entered this market with its own fashion jewelry, watch and footwear line. This line accounted for 17% of Avons sales in 2009. Avon maintains a presence in more than 100 countries.

Silpada will likely extend their presence on the strength of Avon’s.

Citigroup has expressed its approval of the move, suggesting that it would definitely be beneficial for Avon. The economy of distribution should be good for both companies. Cost savings can be obtained by connecting the lines. One would expect to see this happen shortly.

One market analyst was a bit less optimistic. Deutsche Bank analyst Bill Schmitz felt that Avon is in "largely uncharted waters." Corporate acquisitions of direct selling firms have not been seen as of late. No one really knows how the story will end. Given the many similarities of the two companies, it doesn’t seem far fetched at all. Whether the sales forces join hands as well in the future is anyone’s guess.

Will Silpada sell silver and cosmetics? How will compensation scales adjust? Will sales training now be combined?

It makes more sense to unify sourcing and distribution first. One step at a time and this is a big undertaking. The new connection would appear to be coming from a position of strength. This is a positive time that heralds good times for direct distribution and network marketing.

Women working from home should give this a ‘thumb’s up’!

Learn more about women working from home. Stop by Lauren Botney’s site where you can find out all about women’s network tips and what they can do for you.

Tags: Avon, Avon and Silpada, Silpada, women working from home, work at home, work from home

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