Why Tupperware Went Bankrupt
- Tarasekhar Padhy
- Jan 6
- 3 min read
Updated: Jan 7
Tupperware sells reusable, durable plastic containers that are commonly used to store food. These containers are strong, airtight, and durable which ensures the food enclosed preserves its freshness.
I am pretty sure you have owned their products or have at least heard the brand’s name.
As of September 2024, about three months ago at the time of writing this, the company filed for Chapter 11 bankruptcy. It has over $1.2 billion in total debts against $679.5 million in assets. [1]
Presently, the brand seeks new owners to revitalize its whole identity (give them a glow-up) while it undergoes some much-needed internal restructuring.
So, how did Tupperware, a leading brand in the food storage container space, die?
Well, to understand that, you first need to know how they became a leader in the industry.
Tupperware Parties: Social Selling At Its Finest
Tupperware Parties are social gatherings organized by existing customers for their neighbors, friends, and relatives. The goal of these parties is to showcase how amazing the storage containers are and make a sale.
The organizer will be rewarded with a commission and the whole Tupperware Party will be sponsored and managed by the company.
The existing customers saw this as a win-win situation.
This strategy was coined by a saleswoman named Brownie Wise in the 1950s. By 1954, she had built a network of 20,000 saleswomen (known as Tupperware Ladies) and the sales exceeded $2 million.
The method was so great, that she convinced the CEO, Earl Tupper, to scrap other sales methods, including third-party stores and malls. [4]
Why Tupperware Parties So Effective
People trust the recommendations of the people they know.
Friends, family, colleagues, and neighbors are some groups of people who we generally trust because they are familiar and known faces for a long time. Moreover, various interaction over that period makes us like them to certain degrees as well.
Consequently, when these individuals suggest you make a purchase, you fold, especially if you are looking for something related to that.
Another reason why Tupperware Parties worked so well is because the guests attending these events had their guard down. You really don’t expect to get famoosed when you walk into a friend’s party that you’ve been invited to.
As a result, you don’t scrutinize the underlying theme of the event and the deeper psychological tactics at play. It is kind of similar to people trusting their cheating partner.
Why The Parties Died
For the past ten years, the brand’s net global sales have been steadily decreasing:
The primary reason was the commercialization of social relationships. Human beings have friends and whatnot because we are looking to have a great time alive, not earn a commission by coercing them into purchasing something they may not need.
Residents attending these parties also felt manipulated because they often made a purchase due to the dynamics of the party, which was designed to sell rather than encourage people to just have fun.
Furthermore, plenty of women who participated in these gatherings simply purchased to protect the feelings of the host.
Strained personal relationships painted the brand in an evil light and made consumers averse to Tupperware’s products in the long run.
Another thing was the commission strategy. If you think about it, it is a pyramid scheme. A host can only make a significant enough profit if they can move products in bulk. This often required a host to recruit other hosts.
The multi-level marketing scheme is unprofitable for most folks and only a handful at the top earn a decent chunk of change. As more and better opportunities for women opened up, very few desired to become a Tupperware lady.
Conclusion: No Other Marketing or Innovation
The folks at Tupperware were so power-drunk in the glory of the past that they failed to invest in any other marketing methods.
For instance, they launched a storefront on Amazon in June 2022 and started selling their products through Target in October 2022. Their online and digital methods were so trash that 90% of their sales in 2023 still came from direct sales such as Tupperware Parties. [3]
As if this level of amateur-ness wasn’t enough, they didn’t even bother to innovate their offerings either.
Based on the brand name alone, Tupperware could have expanded its catalog to different niches within the kitchen. They also could have featured innovative designs and reduced their prices.
But they preferred to stick with their manipulative method of selling, which is powered by a fancy pyramid scheme.
The end was predictable.
The lesson: Don’t trick people into buying your stuff and don’t get complacent.
Until next time,
Tara
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