How the Fuchsia Fillies Frontload: Straight from the Horse’s Mouth
Written by The Scribbler
Frontload? You mean, “The act of convincing a freshly-recruited IBC that she needs to purchase the highest amount of product possible to prove that she is truly serious about her business? Yep, that’s the one.
Frontloading’s a rampant practice in Mary Kay, friends… one that’s more prevalent than you think. Regarding inventory, Mary Kay Ash said, “You can’t sell from an empty wagon.” After today, however, I think you’ll agree that a more appropriate catchphrase would be, “Don’t worry about the horse being blind, just load the wagon.”
Here are two Mary Kay views regarding inventory – which one seems more logical to you?
- “If you plan to build your business gradually and know only a handful of potential customers, then choosing to place a $600 wholesale order probably will suffice. If your pool of customers is larger and you plan to spend more time building your business, you could consider ordering more.” (“Inventory Answers,” Applause May 2007)
- “To begin at profit level (making money right away) the company recommends that you begin your business with an inventory of at least $3,000 or more.” (“Your Inventory Options” document)
So who’s right? The Applause article seems logical, as a brand-new consultant hasn’t built up a client base and therefore, does not have an accurate “supply/demand” gauge. A new consultant coming in with a $3600 star order equals career death by Domain, right?
Let’s see how some directors – women in Mary Kay’s top 2% – answer that:
- “If you plan to do even one skin care class a week, you need to know that you need a full inventory – or at least, to work up to $3600.00 wholesale. (Executive Senior Sales Director Kathy Payton)
- “You’re going to receive much less…that could put you at a disadvantage where you could be running out of product.” (Future Executive Senior Sales Director Nina Elliott, in reference to the $1800 inventory package)
- And Director Lisa Allison, who’s working on her own National area, affectionately calls a $2400 package the “bare bones minimum” on her tape, “Inventory: Making a Business Plan.”
So now that we’re clear that frontloading isn’t being done by a lone “bad apple” director desperate to make production, where does one suppose directors are getting this “abundance” mindset? Hint: It begins with an “N” and ends in “SD:”
- “Small orders handicap new consultants. $3,600, $3,000, $2,400 – these are the three levels to explain.” (NSD Stacy James)
- “Pull inventory as soon as they sign. Have a sense of urgency.” (NSD Dacia Wiegandt)
- “A $3,600 order is an advantage because banks hesitate to make small loans. Most banks will not consider loans for less than $1,000.” (NSD Rena Tarbet)
- “All working and aspiring Star Consultants need $3600 on shelf. If they do not begin with $3600 or get there within their first 90 days, they never get there. Get the agreements, get the STAR order; I want you desperately to stay focused on your personal selling, personal recruiting, and commit to bringing in STARS!” (NSD Pam Shaw)
Is frontloading going on in Mary Kay? (shakes Magic 8-Ball) All signs point to “yes.”
Visit the
Dum de dum de dum…. does the maths… (MATH!!! I NEVER WAS GOOD AT THAT!)
$3,600 inventory x 19.9% annual interest rate / 12 months = $60 per month just in credit card interest. Minimum monthly credit card payment not included.
Add to that $3,600 credit card balance all the other “must have” MK items, such as Propay, website, business cards, new clothes, gift wrap, Look Books, Limited Edition items… and shipping charges on your inventory, of course. All of that goes on the credit card, because you’re not yet clearing enough orders to pay for that stuff up front….
You’re headed north of $75 per month in credit card interest alone. Fast.
So, what happens if you DON’T buy $3,600 inventory? What happens if you just get a stack of Look Books and order the stuff when your customers place an order with you?
You’ll have to pay about $10 shipping with each order, that’s what happens.
So let’s say you’re a VERY busy consultant and you place a new order every week. You carry NO inventory. You get stuck with no products except whatever you had to use as “filler” for the minimum quarterly “activating” order.
How much extra does it cost you do order 4 times a month, instead of carrying a high credit card balance? Answer: about $40.
Order big inventory. Load up your closet: $60 per month in credit card interest. Or more.
Order no inventory. Yes, you really CAN sell from an empty wagon. Amazon does it thousands of times every day: $40 a month in shipping charges. Bare minimum in credit card interest.
Winner: Order no inventory. You win every time. See how easy that math was?
I watched my Offspring have a ton of chargebacks from people who came in with $3,600. I’d rather have a solid $1,800 who is confident in that any day than coerce people into thousands more.
Telling inexperienced, doe-eyed recruits that $3600 is “profit level” (even though they are told that they can make a profit just by selling the contents of the starter kit) is pretty much the same as telling them they MUST buy $3600 in inventory.
Disgusting.
If Mary Kay corp. was innocent of encouraging frontloading, they would STOP the one time upfront product bonuses that SD’s use to close IBC’s into Star orders, and allow the product bonuses at the END of a quarter to come as a result of building orders…accruing sales.
The bait upfront, and ONLY on the first order, is all the proof you need to see that FRONTLOADING the recruit is the goal. If you don’t order big now, baby, you lose $700 in freebies! Does that make sense??
One of the best points ever made! When Laura Beitler defended MK on 20/20, it was her background as an attorney that knew exactly how to play dumb and say “Of course, we’d jump right in” if they were made aware of an ordering problem. That’s an absolute lie! Promoting first-time ordering bonuses to the new Consultant, her recruiter, and the Director makes them all pressured for that to be the RIGHT decision for her, when often it is not.
Very few new unit members of mine ever met the questionnaire’s recommendation of $3600. Very few. When they weren’t interested in attending trainings of any type, why on earth would they need a massive amount of inventory?
That interview and segment on 20/20 validated almost every point I made when I resigned. Playing dumb doesn’t absolve MK of their wrongs.
Here’s an idea…Since MK can’t demand actual retail sales’ reports from their independent sales force, offer it as a bonus. When a person shows proof of sales hitting certain targets and it’s backed up by the wholesale equivalent, the prize or reward is given. Incentivize people to report their retail sales, not rewarding just wholesale activity. When done in a complete voluntary manner, it’s not making them employees and could cut out some of the cheating that’s going on.
Mary Kay corp. loves rules. They could easily stop the frontloading by deciding that new consultants can’t order more than $600 worth of products for their first order. There, problem solved.