Sales Directors Make Minimum Wage
I’ve broken down director income before. Out of 9,000 sales directors in the U.S: at least 5,100 make less than $16,800 per year. 3,000 sales directors make between $16,800 and $40,800. The other 900 make more than $40,800. But think about that. 10% of the sales directors make more than $40k. 90% of the sales directors make $40k or less.
Here are real numbers from one sales director who ended up in a Cadillac. You can see her year 4 commissions are Cadillac level commissions. But the whole thing is still a trainwreck. Even during that Cadillac year, she only netted $29,000 out of her MK business.
This woman left a $60,000 a year job with full benefits to do Mary Kay. She ended up averaging $14,000 of income per year with no benefits, and had the added burden of self-employment taxes. She didn’t include the income from the “free car,” but she also didn’t subtract any business use of auto, which would have canceled one another out.
And the truth is that the expense numbers are pretty conservative. It’s easy to see how a director could spend much more on the events and promotions.
Take the $14,000 per year and assume this director was working 40 hours a week for 50 weeks out of the year. She made $7 per hour. If she only worked 30 hours a week, that’s $9.33 an hour. And you know that 30 hours a week as a Cadillac director is not reasonable.
Cadillac directors really have it made in Mary Kay, don’t they? If you’re in a pink car, you must be successful!
Visit the
This is the good stuff right here. Most striking to me is how quickly things can drop off after a “good” year. That hamster wheel won’t keep spinning on its own! And that “push” in the “good” year only produces short term results, such that things start falling right back toward where they were before the push.
All those hours wasted on this fake business with so little to show for it. Not to mention the social damage to herself and the financial damage to her downline. Yuk.
(I will assert that the costs are much higher than you have represented as well).
Year 4: nearly $12,000 in product purchases but only a little over $9000 in sales. In all the other years her retail sales exceeded purchases. Obviously she bought her way into that Caddy. And her commissions are so high that year that she must have been recruiting like the draft board and been after them day and night to order order order.
Year 5: commissions down nearly $18,000, product purchases down to nearly of a tenth of what they were the year before, probably the bare minimum needed to keep her title. Retail sales again exceed purchases, no doubt unloading some of that Cadillac purchasing.
This just proves that recruitment isn’t sustainable and there’s only so long you can “stretch production” (i.e. spend yourself into serious debt) without something giving way.
So hooray. She got to drive a pink Cadillac for a few months while earning peanuts. Was it really worth it?
And remember that the retail sales is just that…retail, not wholesale cost. If we halve her sales, it’s around $4600 wholesale that she sold verses the $11,745. However, we know that alot of that retail sales was marked down or part of a BOGO, etc. She may have moved product off her shelves that way, but that’s a big loss. The moral of this story is that If a Cadillac director can’t sell enough MK to make a living, no one else can either. Her numbers show that it’s all about recruiting.
“90% of the sales directors make $40k or less.”
And no benefits, no pension, etc. For some, it’s not a problem because their husbands have good jobs, or they have family money. MK is more of a hobby for them and they’re satisfied with the income.
The problem is they pretend their beautiful home and great lifestyle are solely because of MK, and they use this to snare unsuspecting prey.
Liars.
I have soooo many questions for this director. Assuming those ‘product purchases’ are in wholesale dollars, not retail, what the eff accounts for a nearly 350% increase in product purchases from Year 3 to Year 4? Surely she didn’t increase her customer base by that much. And then the product purchases drops by nearly 90% in Year 5? Who the heck needs $3K in Section 2 supplies? And nearly $11K in ‘MK Deductions’ in Year 5? Am I correct in assuming those are chargebacks from returned product and car copays when production is missed?
It is truly a trainwreck, and those of us who are out of the fog just can’t look away.
What is included in MK deductions? I’m assuming a lot of that is the hotel/travel for the $250 fall retreat/career conf etc
I don’t think so. The way it’s worded as ‘deductions’ under her ‘Cash Out’ section makes me think it’s deductions that MKC took from her commission checks.
“Deductions” would be things she owed Mary Kay that they took from her commission checks: car co-copay and chargebacks when someone in her downline returns product.
Her deductions tripled over the course of that last year!
How exactly, are all the expenses after “MK Deductions” exactly the same for four years in row? And all of them numbers ending in a 5 or 0? That just doesn’t happen with any real business.
But in any case, I could help this woman improve her bottom line. Cut out the expenditures on Seminar, Leadership Conference and Career Conference as attending those glorified pep rallies is completely unnecessary and you’re adding an extra $ 2000 to your profit right there, every year! Also, do you need a new director suit every year? Why not just every other year, save yourself another $ 500 total (2 years x $ 250/year). I don’t understand the “office help” part of it either – $ 1000 a year is about $ 83 per month. What value could you get out of anybody that works for $ 83 per month? Also, given the volume of overall business you’re doing, you probably don’t need the office help anyway. Box up the orders yourself and keep that extra $ 1000. Cut that overhead enough and you might just net a little more than minimum wage. Woohoo!
It’s clear she isn’t really keeping track of expenses; just putting estimates in the spreadsheet. They’re probably well below her actual outgo.
As I understand it, the office help is usually just someone to print off newsletters (do they even print them anymore) and getting them mailed/emailed.
Your advice is good, Charles, but it still leaves her on the same hamster wheel. Still leeching off the backs of other women. Still participating in a scam business model. Some sow’s ears just cannot be transformed into silk purses.