Profit Level Inventory in Mary Kay

You’ve heard this Mary Kay lie many times before: $3,600 wholesale on your shelf is considered “profit level” inventory, and until you get to that level, you shouldn’t be taking any profits for yourself out of your “business.”

Realistically speaking, there is very little profit in Mary Kay to begin with. But this “concept” twists the financial aspect even further and uses faulty logic and bad math to convince consultants to place large initial orders.

Here’s how the Mary Kay explanation goes:

Please study this chart prior to sharing inventory with your new consultant. Study how long it takes to get to profit level.

Begin with 600 wholesale – Need to place 10 months of 600s to arrive at minimum of 3600. Reinvesting before making a profit.

Begin with 1200 wholesale – Must place 8 months of 600s to equal 3600.
Begin with 2400 wholesale – Must place 6 month of 600s to equal 3600.
Begin with 3000 wholesale – Must place 2 month of 600s to equal 3600.

Are you being fair to your new recruit by bringing her in with less than 3600? Look at what profit could have been made.! Ask yourself this question…Would “I” have rather made 3000 during those 10 months or reinvested and had no profit to apply to my families’ budget or to debt reduction?. Which way would produce a happy excited powerful consultant? Which consultant (600 or 3600) would more than likely be still involved with MK even 6 months down the road? Choose to operate from your power and leadership and guide her to invest profit level!

Here’s the real truth:

There is no need to get your inventory to some magical “profit level” number before you’re entitled to take a “profit” out of your Mary Kay business. That’s the first problem with all of this.

The second problem is that $3,600 wholesale on the shelf is completely unnecessary. It is just tying up money and it’s unneeded. Further, as a new consultant, you should NOT be ordering this much. You don’t know if you can even sell any product, and you have no idea what you’ll sell. Ordering this much to start is one of the worst things you can do.

This document is just a deceptive tool to get consultants to order far more than they should. It’s set up to make you think that you need this much inventory to be “successful.” You don’t. This much inventory actually works against you.

By the way, $3,600 wholesale is the exact same number as it was over 20 years ago when I was in MK. This proves that MK ladies have no money sense at all. $3,600 buys much less than it did 20 years ago, but they don’t update their “business” model. If a certain amount of inventory was reasonable or necessary, that amount would  probably change over time. Since it’s a completely fictional number pulled out of thin air, and only determined by how much directors want their commission checks to be, it never changes.

8 COMMENTS

  1. “Further, as a new consultant, you should NOT be ordering this much. You don’t know if you can even sell any product, and you have no idea what you’ll sell.”

    Exactly. Guessing what your customers might want is silly. Just order what they ask for. But then again, Mary Kay Corp will make sure you over-order your first time each quarter to meet your minimums anyway. So that initial inventory purchase is completely arbitrary and unnecessary. You are going to over-order every quarter just to stay qualified, no matter how much you sell.

    That $3600 on hand does not insulate you from those recurring qualifying quarterly minimums, so you might as well skip the initial package. MKCs business plan is built around consultants over-ordering, and all the incentives reward these orders, not sales. No matter how much you have “on the shelf”, and no matter how much you sell, MKC still requires you to make a quarterly minimum purchase to stay active before you can order onesy-twosey for your customers based on their needs.

    Stocking up on inventory is unwise, and gains you nothing. But is is SO GOOD for your upline and for MKC!

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  2. “Would “I” have rather made 3000 during those 10 months or reinvested and had no profit to apply to my families’ budget or to debt reduction?”

    That’s only $30 a month. There are far easier ways for the average person, with average income, to save $30 a month. That’s “skip Starbucks once a week and turn the heat down a degree” territory.

    And if you’re in the sort of financial straights where every penny must be budgeted, all luxuries excluded, the absolute worst thing you could do for your finances is saddle yourself with thousands of dollars in debt for stuff you’ll never sell. Plus, you’re still saddled with the quarterly minimums no matter what’s left on the shelf at the end of the month.

    And it’s annoying me beyond annoyance that they spelled “wholesale” correctly twice and then spelled it wrong. IT’S CALLED PROOFREADING, PEOPLE!

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  3. In a REAL business, your “profit level inventory” is NOT a set figure … If you have $3,600 wholesale on your shelf and it’s the WRONG PRODUCT for your customers … that’s not profit, that’s losing money.

    If you aren’t using sales trends, customer demand, and your own cash flow to decide how much inventory to carry, you are losing money.

    https://www.inventory-planner.com/inventory-levels/
    Calculating optimum inventory levels to meet customer demand without tying up cash flow or paying too much for storage and warehousing costs requires careful balance and management.

    If you aren’t maintaining proper inventory quantities based on sales trends, customer demand, supply patterns, and other performance metrics, it can result in poor inventory performance. This can lead to missed revenue due to stockouts or investments in the wrong products, restrained cash flow due to excess stock, high overhead costs, low profits, dead stock, and other problems.

  4. I thought it was a good learning experience to start with $600 and reinvest profits. I learned what my customers wanted me to have on hand. Also, the full store of $3600 has been the same as it was in 1990. With a lot more products it just a random number thrown out there. My team embers that sent their product back were the ones that started large.

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