Mary Kay Business Basics
Written by Queen of Section 2
I learned a lot of lessons while in Mary Kay. It’s easy to listen to your upline. You think they have your best interest at heart. But they truth is that they have THEIR best interest at heart. Mary Kay makes it easy to plunk down thousands of dollars for skin care and makeup. They tell you if it doesn’t work out they’ll give you 90% of your money back. It’s almost risk free. What other company will give you almost all of your money back?
And yet this decision goes bad for so many, and we’re left scratching our heads wondering why. It’s your business, and yet Mary Kay tells you so much about what you can and can’t do. You can’t advertise like this. You can’t sell here. You’re not REALLY an entrepreneur. They have complete control over how you sell, where you sell and the manner in which you sell your product. Just read the Agreement (again) and you’ll see that I’m telling you the truth.
So, from the very beginning you discover how severely you are restricted in your efforts to capitalize on the Mary Kay opportunity. You can also begin to understand how much slower it will be for you to recoup your investment on your inventory and supply purchases before you even get to see a profit. Not only that, but because there are no territories in Mary Kay, you have no idea how saturated your geographical area is with not just the competition (Wal-Mart, Target, drug stores, etc.,) but with other beauty consultants selling the exact same inventory you have! Yes, a franchise has their rules and restrictions too; however, they never set up a licensee to fail in an already saturated market. And of course everyone can get anything from anywhere online, and it will be to them in a day or two, so that never helps.
There are few sure things in this business. I happen to know of at least one “sure thing”. If you permit me the time to explain it to you, I will not guarantee that you will be any richer for it but I may help to ensure that you will not be any poorer for it, either.
Other than business cards, the Starter Kit is the one and only investment you need to make in order to get started and work your Mary Kay business. In it you will have more than sufficient product to hold enough skin care classes and facials for you to qualify for your 50% discount and to meet your customer’s immediate needs. All your training information, product information, mirrors, sales slips, product request form, etc., etc., etc., is included to get you started. There Section 2 supplies, too, so make-up samples are also included in the Kit. You even get a tote to carry it all in.
It is true! With the Starter Kit, you can easily recoup your $100 investment and earn your first quarterly $225 wholesale ($450 retail) qualification for your 50% discount, selling to your friends and family in your first month. Maybe, if you’re lucky, once you’ve paid for your gas and packaging and hostess gifts, you might actually make $50 at the end of your first month.
I know of a few other ‘sure things’, such as what to watch out for in order to protect your financial health and stability while working your business. If you’re interested in knowing about them too, read on.
Inventory: I would like to dispel the inventory myth. You don’t need one. Mary Kay has warehouses of fresh inventory stored in optimum conditions that will get to you in a couple of days (or direct to you customers in a couple of days with MK’s customer delivery service). Aside from the fact that the products have a shelf life, Mary Kay discontinues product, introduces new product and changes product packaging every season.
So I say, what’s the point of storing “volatile product” or incurring credit card debt, when the fact of the matter is, you have 100% access to fresh, on-trend product 24/7 at the click of a button and! money in your bank account working for you and earning you interest until you make a sale. The saying that “inventory is money in the bank” is a load of malarkey. Cash in the bank is what cash is. Running to the ATM machine is much faster and lucrative than running out to try and sell a cleanser or bartering for a loaf of bread with lipstick samples.
The truth is, your director needs recruits purchasing a minimum of $600 worth of start-up inventories, or existing team members putting in orders of $600, every month, to stay on target for cars, trips, etc. So you see, it’s not about what’s good for your business; it’s about what’s good for your up-line. Plain and simple, your continuous monetary investment in product pays for their lifestyle.
Recruiting: Never recruit. Hands down, recruiting is probably the biggest money-losing proposition for the lower echelon in Mary Kay, ever. Here’s why: You earn 50% by selling product to your customer. If you recruit her, you earn 4% instead. Ah, but what if she’s a firecracker and sells a boatload, you say? The commission you earn on your recruit’s inventory purchases is not rightfully yours for one full year. Remember, that 90% buy-back guarantee doesn’t just apply to you; it applies to your team as well. If your recruit elects to purchase a large inventory, and even if she legitimately sold product in the months leading up to her resignation, it doesn’t matter. Mary Kay ties the commission you earned on her purchases to her outstanding inventory she wants to return. So you have to pay it all back.
My advice to you is to keep it simple. Stay off the hamster wheel. Keep the 46% commission you would otherwise forfeit in order to recruit, for yourself. Understand that the commission you earn from a customer is immediate cash in your pocket to do with as you please. But if you recruit, not only are you opening a Pandora’s box of unforeseen expenses, such as management attire and motivational prizes, and so on and so forth, the amount of time, effort, money and training you put into a team 1) keeps you from selling and 2) makes you vulnerable to lost revenue if she decides to leave.
Lastly, and not obviously, this is one of the reasons why large inventory “pulls” also known as frontloading, are made. Hey, somebody has to make up for lack of production somehow.
Discounting: If you’re going to sell the product, then don’t give a discount. That discount is your commission flying out the window. You paid 100% wholesale for your product, you prepaid the tax at 100% retail and you get to absorb all of the shipping costs. You still have to pay for your gas and packaging. You are not a supply channel/distributor for Mary Kay. This is supposed to be a money-making venture for you. Mary Kay is not taking a hit on discounted product and neither should you. Yeah, right. Tell that to your mother and best friend.
Ordering: Don’t order at the end of the month. Only order at the beginning of the month. This advice doesn’t benefit anybody but you. Meaning, your director’s quotas are due at the end of the month. That’s when she will insist you order. My advice is to ignore her and here’s why:
The three month 50% discount is not a rolling time-line. For example, if you order May 29th, your 50% discount doesn’t run until August 29th. May actually counts as a full month. So in effect your 50% discount will run out July 31st. Why forego a month’s worth of discount that would benefit you in order to pay for her car, which will never be available for you to drive?
Inventory – Part II: If you insist on maintaining a small inventory, never let anyone else choose it for you. Never. You are responsible for your orders. Mary Kay will not exchange items or let your return your product unless you are exercising you 90% buy-back guarantee.
Never order product when it’s on sale. Usually that means it’s about to be discontinued. If it’s discontinued then it will not be in The Look Book for your customers to see and you will probably end up having to sell it for cost or worse, less.
You absolutely do not have to reinvest 40% or 60% back into your inventory. If you want to keep a few moisturizes on hand or a couple of cleansers, or invest in some foundation and a mascara and disposable mascara wands for skin care classes or facials, that’s not a bad decision. But carrying too much inventory on your shelf leaves you susceptible to volatility and uncertain market conditions. The more you have to unload when you’re advised of changes (normally three months in advance) the harder it will be for you to recoup your investment.
Don’t buy any color products. Carry some samples in the most popular colors and leave it at that. They’re relatively inexpensive, and you can order whatever color products your customers want. This is much better than being stuck with full-size color products you never sell.
Training and Time Management: There are two things you need to know about the Monday night rah-rah sessions. First, any meeting (or event) you attend will cost you money. They call it a room fee. So contrary to what they say upfront, your training is not free.
Secondly, the purpose of any event is to recruit. That’s why you are encouraged to “bring a face”. Be forewarned that if you decide not to recruit, and you bring someone along, a sister consultant may attempt to recruit your friend for themselves under the guise, “Who are you to decide that she doesn’t need Mary Kay?” So my advice is, leave your customer or friend at home. If you’re not learning anything more than the scripts which are included in your training documentation in your starter kit, then either stay home or have an appointment booked. In other words keep your money to yourself.
Skip career conferences, seminars, fall retreats, make over ‘n muffin events and any other excuse to get you out and submerged into the fold. The costs associated with attending these events slash your earnings severely and you don’t take anything away from them that you couldn’t get from a Monday night meeting or your starter kit. Be the (richer) party pooper and spend your money on you and/or your family, instead.
Skip the Preferred Customer Program: The return on investment is little. It’s more lucrative to go to the dollar store and purchase some cute gift with purchase items from there and offer them to your customers in a promotional email, instead.
What’s important to remember is this is YOUR business. Any decision to spend money negatively impacts your bottom line, nobody else’s. Contrary to what anybody says, the products do not fly off of the shelf. Once you exhaust your soft market (friends and family) you must go out and peddle your wares to the general public. Here’s a clue: They don’t love you and they are not obligated in any way to be supportive of your endeavor. If you don’t have anything to lose, you can simply walk away. Having a few thousand dollars sitting and rotting on your shelf makes the situation more desperate.
So in the long run, the truth of the matter is, 90% buy-back guarantee or not, the only way to make a meager living at this opportunity is to make the least amount of investment possible. That means invest in your business cards, the Kit and some peripheral supplies. That way if life happens and you need to step back for a while or a few years, your investment isn’t perishing uncontrollably before your eyes.
Of course, you could just get yourself a predictable part-time job, with a dependable wage that pays for medical and dental benefits, instead.
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Great article – love the conclusion suggesting a part time job with benefits! I was thinking exactly the same thing as I was reading through.
Good post. The one thing I note lately is the pictures of the starter kit contents have sparse product and a lot of paper (i.e. marketing info). This is compared to what was offered years ago (1990’s). MK corporate is saving money on starter kits, and the focus is on initial inventory orders from those who sign up. Does anyone remember the starter kits with all the colors of makeup tubes hanging up in a pinkish fold out case?
You’re totally right! This is the latest starter kit, and there is way less product in it than they used to give!
How on earth are amateurs supposed to correctly match foundations when there’s only a few shades in there? Even pros take dozens of shades!
At least that bag is a lot more attractive than the bowling ball bag I got 6 years ago.
I’m so embarrassed I ever fell for all this. https://www.pinterest.com/pin/109704940898031728/
Ours in the 90s had demo tubes of all 3 cleansers, masks, toners, and moisturizer plus EVERY shade of foundation and loose powder. We were prepared adequately to sell skin care at our classes. The starter kit (aka “showcase”) had no obvious aim towards recruiting. It was all about high sales at our appointments, and we had full color looks completely designed out for us to carry in our binder. I sold from a place of no cosmetic experience, yet I sold at every single appointment. I quickly started to have people on the full Basic, and I felt immediate gratification.
I agree! I was looking on Ebay for an old kit to link here. The customer eyes would see all the product and I did sell something at each appt. It was tough to schlep it all about and keep it organized after an appt. However, it was much more professional and did show the many shades of foundation, which in turn those who had a tough time matching foundation (at stores and limited at dept. store counters) were happy to test which one was correct. Lol, I forgot about the full basic in all three formulas were also included. The tubes were also marked different than the purchased product. I am sure it was about 10 -12 pounds to carry. And I remember the color binders and how we could get updates from section 2 for face looks with blush eye shadow…
Now it streamlined (cheaper) for corporate to manufacture the products and sell directly to a consultant as inventory purchases. I was in MK when the starter kit dwindled and was told by director to purchase the full size product and put it on the table as a centerpiece during shows. Of course it could be a business “write-off”. The genius at MK corporate who slimmed down the starter kits, saved corporate a bundle! I think in some cases customers would buy the demo size product, the consultant would buy it again from section 2 (at a much cheaper price) than the brochure product, and again bit into that commission order for the director.
Thank you so much for posting a picture of the recent kit, with all the paper. I see 16 products in the picture.
I do!
Oh boo— My recruiter and SD both pretended they didn’t know when I made that rookie mistake of ordering at the end of the month instead of waiting a few days. What the heck? You didn’t know that two days would count as a month? Oh I didn’t tell you that? I was so livid and then realized that no one had my best interests at heart, except me. And so I began plotting my route to get out.
My director always tried to use the ploy of “order at the end of the month because if you wait until the beginning of next month, you’re not going to get your order until all the month-end orders are filled before you.”
Well no kidding. They fill orders in the order they were received. But what’s the difference if I’m the last person at the end of February or the first person at the beginning of March. I always told her that the difference between ordering the last day of the month or the first day of the next month was negligible. She did NOT want me saying that around other consultants.
Oh right — I’ve heard that one: You don’t want to have to wait! Order now on Feb 28th, before 5pm!
Mine did the same and taught us to say it unit-wide.
Stop it.
You did not pay whole sale.
Great article with good advice for those still sucked in, but I have to make this point.
Here goes:
MK is a pyramid scheme and it has caused financial & emotional damage to many people. For those who have had some success, they’ve achieved that by unsavory actions. That’s why they are called pyramid schemes, right? They are bad for you and when caught, illegal. MK just hasn’t been caught yet like Amway et. al
So my question is, why do you all want to be associated with such a dubious company AT ALL? If you steal one dollar, you are still a thief. If you drive the get away car, you’re still part of the bank robbery. If you buy the starter kit, you are supporting a pyramid scheme. I don’t understand why anyone would want to be part of this financial fraud in any capacity and keep them in business?
I’d love to read some feedback as to why people don’t boycott MLMs in good conscience. Perhaps they don’t have a complete understanding of the scam of MLMing? But when one does, it all makes sense. Like a card trick if the magician reveals the secret. So easy to see how he does it after you know how the trick is done.
P.S., MK is not an “opportunity” no more than if we were to refer to robbing a bank as an “opportunity” to get money. We need to undo the brainwashing of terms MLM has high jacked and get them back to the context in which they belong. Some MLM examples:
Leader/Director = Head scammer
Successful MLMer = habitual long time scammer
NWM entrepreneur = No pot to pi$$ in wannabe
Consultant/affiliate = participant in the crime, willing victim
Mary Kay is NOT a MLM and definitely NOT a pyramid scheme those are illegal! Its direct sales people. Its funny that people think they can sign up to be a Mary Kay consultant and make bank by just signing up. Its not gonna happen you have to go to work! Of the articles that I have read on this website, it seems to me that there is a whole lot of bitterness going on here. If your aren’t successful in Mary Kay then maybe you were never cut out to be your own boss. So, go to work for someone else, and have them set your hours, your pay, and be satisfied with it. and don’t bash Mary Kay for it. I’ve been married to a Mary Kay Cadillac director for nearly 26 years. We’ve been in this company for 24 years. If you are reading this understand success in Mary Kay is based upon YOU and your hard work nothing more nothing less. It is a company filled with hard working women who empower other women to do the same. This website is sad. Grow up and move on.
Sorry Chris, but we have to ignore everything you say and assume you’re lying since you started out by claiming Mary Kay isn’t an MLM. It absolutely is, since people are recruited into multiple layers. It’s basic common sense.
Wikipedia lists Mary Kay as Multi Level Marketing
Why is she still ***only*** a Cadillac Director after 26 years? Doesn’t Mary Kay work when she does? Or is her Deserve Level just not high enough?
I hope you have another job that will pay for your retirement. If she can’t get past Cadillac after all this time, she sure won’t get any retirement from Mary Kay.
Haha! All the same cliches. “It’s not an MLM, it’s direct sales. It’s not a pyramid- those are illegal.” Blah blah blah. They’re legal until they’re not. Like Amway and Herbalife. Grow up and do some outside research.
I worked just as hard in a Cadillac as I did when I wasn’t in one. And after 24 years, why isn’t she an NSD?
I’ll happily continue climbing my corporate ladder, having been promoted more since I left MK than in my years as a Director. And I have benefits, retirement, dental, vision, paid weeks of vacation and PTO…without having to check production, return quitting or whining unit members’ texts or calls, and not give up days off to schlep myself around at Career Conference.
I bet you’re surrounded by Directors who don’t claim things on their taxes, Chris, just as I was at Leadership every year.
Oh you mean all the of the Kay Bots who say you can make “bank” by just working 5 hours a week isn’t true?
Color me surprised.
Chris … Please send the last 5 years of your taxes (the schedule C) to pinktruth@gmail.com to back up your claims of making money.
This site’s owner is a real accountant and can perserve your privacy and analyse your claims.
Just as brainwashed as his MKult victim. When the pyramid collapses their exit counseling therapy will cost twice as much..
What a load of crap Chris. I own a successful restaurant now. Approaching our 10 year anniversary. I am my own boss. And I make far more money than most in MK will ever make. And I get to do it with my ethics intact.
Simple math: Your friend buys $200, you get $100 profit (yes, I know, but work with me here).
If you recruit your friend, how much does she have to order before you’ll get the same $100? Do the math: $100 / 4% = $2,500!
Yes, that’s right. For you to get $100 commission on your friend’s purchase after you recruit her, she has to buy $2,500 wholesale ($5,000 retail) plus pay tax on $5,000.
Just. Not. Worth. It.
More math?:)
I’m the friend who spends $200. ($100 worth of product plus the $100 commission to so called friend charging me extra money)
Why don’t I just sign up and save myself the $100 especially if I buy frequently? My mom is also her customer and I’ll just pass my savings on to my mom too. And all my other friends. (If that many people bought MK that is)
$200 consultant friend isn’t looking good at all.
Isn’t it grand that just anyone can sign up for these MLMs?
One can’t help but start to think that consultants are the real customers for the company, and that “wholesale” is actually retail.
How does the MK company get customers? Why by calling them consultants and brainwashing them of course.
Why not just subscribe to beauty boxes and spend $10 $- $29 a month (I.e. ipsy, boxy charm, allure etc) and get Fun real products. Just a thought. ?
I love those beauty box subscriptions! I got Ipsy for about a year, and it was great therapy for me right after I left MK. They get you so conditioned against using any other brand which is such a shame because there’s some great stuff out there!
YouTube has a lot of videos where they are gasping and squealing with delight as they show you what’s in the new starter kit.
It’s mostly pretty, brightly-colored papers.
A 12-year old would love it.
I wish I had seen info like this before I started Mary Kay! It would’ve prevented me from taking a loss of $20,000 during the 10 years I was being “successful” in this poor excuse for a business.