This is the email a Canadian Pink Truth member sent to all of her Mary Kay unit members. I am impressed by her strength of character and her willingness to put it all on the table. We are honored to have her as one of our members.
It is with sadness that I write this email to you. I apologize in advance, I wish I could explain this to you in person because an email doesn’t give you the tone of my voice and seems so impersonal, but I didn’t know how else to connect with over 30 people about the same issue.
I shared at the meeting Monday night that I have made the decision to resign as a Mary Kay Sales Director. I apologize in advance for the length of this letter but it did take me a whole meeting to discuss it on Monday night. Please read it to the end. I appreciate your time.
I loved my business. It was so emotionally gratifying. I went from zero to hero instantly, got tons of recognition, prizes, etc. I was the superstar of my unit and everyone wanted to ask me how I did it. I wanted to keep up that superstar image and would do it at almost any cost. And for 4 years, I have been blind to what was really going on with my finances.
Each year I have been going deeper into debt. I was so embarrassed and ashamed. I thought that it was just me. I felt that it was because I was being a poor money manager and that I could fix the problem somehow, but I now realize that it is rampant in Mary Kay and that my story is not unique. I’m not trying to say that I am blameless and that I totally took care of my finances properly, but many others have experienced the exact things I have. Maybe even you.
At Monday night’s meeting, I showed everyone my income tax returns starting with my first few months as an MK Beauty Consultant until last year’s return. The numbers are dismal. I have actually accumulated approximately $30,000.00 in debt over the last 4 years and it’s not sitting on my shelf in product. I have under $2,000.00 on my shelf right now. I truly believed that everyone else was making it work for themselves and that I had a big problem all on my own. I was sure that anyone I recruited could make this business work better and that they could be completely successful and not make the same mistakes I had.
The problem begins when you feel the need to “top up” your orders to be a “Star Consultant” each quarter, or when you’re going for a car or Directorship. This is when you feel you just have to reach a certain mark and you are willing to “do what it takes” (make a way or find a way) to get there because now you have created an image which you so desperately want to keep up no matter what because it’s now a matter of pride and keeping face. (which usually involves your pocket book).
I was a booking machine. I was consistently selling $1, 000+ each week and I know I could do it every week for the next 25 years if that was my desire because the sales field comes naturally to me. I have mastered the art of selling the product, applying colour, recruiting, and coaching the working Consultants in my unit. I have poured countless hours going to any training I could get my hands on, reading books, and listening to CD’s. I continually asked top Consultants, Directors, and Nationals questions that would help me to hone my skills and knowledge. I never missed a unit meeting or company run event etc.
I loved this business, admired and respected the people in it, and enjoyed servicing new and existing customers. I felt there was no other business like Mary Kay and that I would be a National Sales Director within the next 7 years. I had a goal and never questioned whether I would attain it. But as you will see in my breakdown of achieving Queen’s Court of Sales, and how income tax write offs work, most people who start an MK business will never attain the success that is perceived as realistic and attainable, and we hear is always “just around the corner” and told that only those who quit are “failures”…
Just to be nice and give the company the benefit of the doubt. If one of you decided to do Queen’s Court of Sales this year which is $30,000.00 in retail sales and have a profit of $15, 000.00, you would have to do aprox. 5 skin care classes per week, because you need to have 3 successful classes (no less than $200) to achieve it so I’m giving you a buffer for the $0 class and the one where you only sell one or two small items. I am basing my numbers on my second year of business when I was booking and holding more than 5 appointments per week. Here is the breakdown.
- 5 classes at 2 hrs per class plus 1 hr travel & set up time = 15 hrs x 50 = 750 hrs
- 3 hrs. per week making booking, coaching and follow up calls = 3 hrs x 50wks = 150 hrs
- total hours put in for classes and phone time is 900 hours
- Your profit before deducting expenses is $15, 000 divided by 900 hrs= $16.67 per hour
Now watch how my profit disappears…
This amount does not take into account costs for:
- Hostess Credit
- Roll Up Collection deals
- Other “set deals” on the placemat
- other product giveaways ($4,119.86)
- Preferred Customer Program which is $1.25 per contact and $50 for a box of 5 gift with purchase products ($378.69)
- Shipping and Handling ($590.18)
- Postage to send out invitations to open houses or letters to customers or team members
- Gas ($3,474.67)
- Business software ($40)
- Interest payments on Line of Credit or Credit Card ($1,509.45)
- Extra internet costs
- phone costs
- cell phone
My total expenses for my second year in business including product give aways etc. came to $9734.16 leaving me with a total profit of $5265.84 for the year, divided by 600 hrs = $8.78/hr. (less than minimum wage)
Notice that I didn’t add internet and phone costs, this is because my husband was paying for that out of our household funds. My gas costs are high because I live a minimum of 1/2 hr travel each way to any of my clients’ homes because I live outside of town. We were also told at a workshop by a National that if we wanted to become Nationals we would need to build our team in several different areas within a 2 to 8 hour radius depending on the density of the population so I determined to travel to cities within an 8 hour trip one way, and other places that would require lots of travel time to work towards my long term goals.
The product giveaways seem high but when you figure the roll up collections, the Miracle and Ultimate Miracle sets which would give the customer a free satin hands set ($50 value) or a pocket at 1/2 price. I was selling lots of rollups, miracle, and ultimate miracle sets.
Unfortunately, most Consultants never attain Queen’s Court of Sales and sell much less product. So far, I am the only one in our unit who has achieved this level of sales and 1 of 4 who did it in my Sr. Director’s unit which includes my Sr. Two years ago, there were about 260 Consultants in the court of sales out of aprox. 35, 000 consultants in Canada. Which is only 1%.
Many women in Mary Kay do not understand or take proper care of their finances. We are told to just do the 60/40 split and that it will all work out. What that really means is, “I don’t know what I’m doing either but I’ve heard of this 60/40 formula that likely works. I can’t tell you for sure though because it has never worked out that way for me personally.” To do the actual 60/40 split formula would mean that you never sell your product at lower than retail prices and that you never give away more than 10% of your profit as gifts with purchase or hostess deals, product give aways, or make up baskets for draw prizes etc.
Don’t forget that you also pay for shipping, Preferred Customer Program, gas, stamps, cell phone, internet, clothes, recruiting coffees, seminars, retreats, etc. These are never calculated into the 60/40 split theory. Those expenses would either come out of your profits or your household moneys from another source of income even though you need to do these things to sustain your business. I guess that’s where the tax write offs come in so that you can show that you had $0 income, right?
If you have ever sold a roll up collection, you would have made a 29% profit if the items in the roll up did not exceed $350 retail value. You would then replace all of that product onto your shelf. The 60/40 split just doesn’t fit into the equation for this sale. The Ultimate Miracle Set was the miracle set with an Age Fighting Eye Cream and a Visibly Fit Body Lotion added which comes to $245. The gift with that purchase was the Satin Hands Set a $50 value. You would lose $25 of your profit from that which would give you $97.50 profit instead of $122.50, a 44% profit. And the Miracle Set gift is any pocket at 1/2 price which is an approximate value of $40 retail. You don’t lose anything with that one because you are giving it to her at your cost but you don’t make anything on that product either and you actually still had to pay shipping for the order it came with (as you would for all of your product) so in reality, you lost whatever the s/h percentage for that one if you don’t charge your customers for s/h. I have never charged for shipping and have never heard of anyone else doing it in this business either. I always absorbed the cost for it. (yet another expense.)
During the unit meetings and on your Weekly Accomplishment Sheets you will be recognized for the total amount of product that left your shelf and not the total dollar amount you actually collected so the numbers are always inflated and look way better than it really is. And when your hourly earnings are figured out on the WAS, it is all before expenses and before any giveaways etc. This looks way better to the guests in the room as well as the other Consultants and gets everyone “hyped”.
Please read this! As for my own debt, you’re probably wondering where all the money went. Well, there was *Commissions charge-backs (ask me about this!), Seminar (x4), Career conference (x4), Leadership conference, air fare, hotels, meals, New Director Training in Dallas, hotel, food, air fare, gas to and from airport, Preferred Customer Program, room rental fees for unit meetings, newsletter fees, postage, gas, oil changes, car washes, Red Jacket, Director uniforms (x2), other outfits so that I look sharp, post cards, Consultant high week ribbons and other section 2 Director things, area retreats, hotel, meals, air fare, MK training seminars outside of corporately run ones, out of town training seminars once or twice a month, gas and entrance fee, meals, recruiting coffees, prizes for my unit, *topping up orders to finish DIQ (ask me about this), my Director Debut which would include prizes, gifts, room rental fee, food, decorations etc., Sample sizes of skin care and colour cosmetics, gift wrap and curly ribbon, full size samples for classes and follow up appointments, phone, internet, CD’s, Books (educational supplies), office supplies, faxes, refurbished PC because the old one kept crashing and wouldn’t receive some of the Director level emails people were sending me, Boulevard software to keep track of my business, temporary office assistant (that I was told I had to have if I wanted to be a successful Director even if I couldn’t afford it), I was told to get a house keeper to come in at least once a week as well and to just do an extra class to cover the payment so that I could be a success but I decided not to do that, and I’ve probably missed a few.
Just so you know, I was at a tax workshop at a company event two years ago. The Directors throughout the room were saying that they’ve never had to pay taxes on their MK business. What I didn’t realize then and now understand is that our government doesn’t make a home based business owner pay federal tax on earnings of $9,600.00 or less and you don’t pay provincial tax with earnings of $8,681.00 or less. I double checked these numbers when I called a Chartered Accountant this morning (especially because she used to be an MK Consultant so she would definitely know). So that means that what ever amount someone tells you they’ve earned in commissions that year plus their “profit” from their personal sales, their expenses were enough to cancel out all of their earnings (profit) that would have been taxable (over the $9,600.00 level). That means their profit is $9,600.00 or less for the entire year! Some of these Dierctors have been in the business for more than 20 years and have never had to pay taxes because all of their expenses and percentage of expenses for utilities etc. alloted for the amount of square footage they use for their office at home outweigh their profit. I even asked a Director (who will remain nameless) to see how her income tax return worked out. She told me that her husband claims her as a dependent when I asked if I could see her income tax return from last year (which she wouldn’t show me) — and she is driving a Pink Cadillac!
Does this send a warning signal in your head? I’m not saying that everyone in MK doesn’t make money. Some do but it is such a small percentage of Directors and National Sales Directors that it seems insignificant. The thing that kills me is that everyone under those “successful” Directors (the Unit), and NSD’s (the National Area), are experiencing the lack of profits and losing money just like most of us and these Directors are very aware of that because it was happening to them as well until they got to where they are today. (which is why I just can’t do this any more because I would have to do the same thing to my people).
Most people just don’t know where the money has gone, things are getting out of control, and they are too ashamed to admit it. And some have left viable careers to go after the “Mary Kay dream”. If they only knew that they aren’t alone, they might have the courage to step out. Just have a look at your Applause Magazine and read the small print while you’re at it to figure out who might actually be earning a decent profit. You will be shocked. This affects whole families, not just the Consultant as an individual because it affects their family’s income.
There are some National Sales Directors who are getting less than $5,000.00 in commissions each month and they would have a minimum of 300 people in their area (13 Sales Directors with a minimum of 25 people in each of their units). Our unit hit the $4,000.00 mark in November with a unit of 30 to 35 people in it. I’m not saying this in a proud manner, I’m actually feeling sick about it. The numbers that are published in the Applause Magazine are before expenses as well so it always looks allot better than it really is. My Director expenses from last year totaled just over $7,000.00 and that doesn’t include any of my regular expenses which you as a working Consultant would have. And a National would have even more expenses on top of that.
Plus we tend to put the million dollar Directors and Nationals on huge pedestals. This is also before expences. Did you know that if you had a regular job and were earning $50,000 for 20 years, that you would have earned 1 million dollars? You have spent it on rent, vacations, food, clothes, car, gas, etc., etc., but you’ve earned a million dollars! If MK is viewed as a business and a replacement for a different job, the Nationals would be using their earnings to pay bills and regular family expenses as well as any extras just like any “executive” would have to. Or did you think they just save it all up for a “rainy day”?
Most Directors would have resigned quietly. Even if they had been finding this to be true and just didn’t want to make waves or to be considered “negative” or whatever their reasons might be. I can’t blame them. It is so much easier to tell everyone that they have decided to go down a different path and are stepping down from thier position. I wanted to tell you what has happened in my personal business and what I have observed in the last 4 years just so that you can make an informed decision about the direction you decide to take with your own business. I feel that I owe you that as your leader whom you trust. In the end, you are the one who will decide what you would like to do, and that’s the way it should be. I don’t send ill wishes to anyone, I just wanted you to know.
I was totally blinded by my own need for acceptance and worth and didn’t realize all this was happening. Or at least I wasn’t willing to see things for what they really are. I felt that I was nothing without my Mary Kay business. I felt this was what gave me value and purpose, but the truth is, it’s not. I would have attracted the same type of awesome women in any field just because of who I really am on my own just like any of you would attract the same type of people where ever you go because of who you are. You have value on your own!
I never intended to steer anyone down the wrong path. I understand that some of you will be upset and you have every reason to be. You put your hope in something that isin’t what it appears to be and have been working hard to make a profit and you just haven’t seen it yet. Or you may have been making plans to replace your curent income with your Mary Kay business and now can’t see it happening. You have been hearing Directors telling you that you just have to keep going and keep working and that all that you wish for will come true. It’s true, that if you work very hard and focus on booking selling appointments and recruiting to build your team, that it will get you to the top, but at what expense?
Mary Kay said that “You can achieve anything you want if you want it badly enough and are willing to pay the price.” I’m just not willing to pay the price anymore. How about you? Success is always “just around the corner”, but for most of us that corner will never come, it’s perpetual. I know that I had the drive and passion to become a National Sales Director, and that is where I wanted to take my business, but to do that I would have to sacrifice my family because of the huge time and financial commitment, and all of you as well and all of the other women I would need to recruit and move up the career path and all of their families too and I’m just not willing to do that.
People are way more important than image, position, and prestige. Corporate is the only one who will profit from this and many are starting up a Mary Kay business as I type this email because they think this business is truly run: *God first, Family second, and Career third (ask me about this!)
For those of you who decide to continue your business at what ever level you choose, you will now be in my Sr. Director’s unit and I’m sure she will be contacting you soon. I will no longer be responsible for your training or helping you advance in your business. I will also be accumulated back into her unit just to service my current customer base so that I don’t leave them stranded. Anyone who was personally recruited by me will remain on my “team”. Any of you who were recruited by a different Consultant in our unit will be on her team. I know this may be a little confusing and I apologize in advance for any inconvenience or distress this may cause.
Head office might terminate me when they catch wind of this email, and that’s okay. It will just prove that my story is correct all the more and that they want to keep us from speaking the truth about what is really going on. It makes their job difficult you know! And they’re in it for the $$ and that is on their consciences. They are the ones who are making real executive incomes off of our inventory purchases.
You will hear other Directors trying to discredit or minimize what I’ve said or blame it on my family situation or my “mental state” (negative or unstable), or that I’m just putting my “stuff” on you, but it really doesn’t matter. You know me for who I am. If anyone asks you why I resigned, please tell them, don’t be afraid to speak the truth. I know you can do it because you and I have integrity and heart and I’m so proud of each of you! I will forgive anyone in advance if they feel they need to “turn me in”.
I have enjoyed working with you immensly, and I care deeply about each of my unit members and adpotee. You are all special and important and I wish you all of God’s richest blessings in your life and in the lives of your loved ones. And yes, I do still admire and appreciate the heart of many other Directors in this business who genuinely care about their unit members and just like I was, plugging away for ultimate success and wanting to help their people to do it too without realizing what’s really going on.
A few of us would like to plan monthly social activities because we enjoy getting together and having a fun evening out and all of you are more than welcome to join us. If you would like to know what is being planned, please let me know and I’ll keep you posted.
If any of you would like to talk with me personally about this, please don’t hesitate to call me. I hope you can forgive me if you feel that I deceived you. I will take ownership for my part in all this and welcome you to tell me how you feel. Maybe I can make it right somehow.
With Love and Respect,