Things I Wish I Knew About Mary Kay Inventory
When I first started Mary Kay, oh so long ago, I bought into the hype. I heard about inventory, was told I NEEDED it in order to be successful, so I bought a bunch. After all, who in their right mind starts Mary Kay with the intent to fail? We all start with the intent to succeed, and if that’s what we NEED, then we’ll do it!
Back then, I was given a sheet from my sales director that outlined how many classes per week you needed to earn so much, how much the supposed average sales per class were, how much the supposed average reorders were… Little did I know, all of that was total fiction. Made up.
These days, Mary Kay Inc. has an inventory worksheet to fill out. I read the sheet, and realize that just about everyone “needs” $2,400 or $3,600. Heck… You even give yourself extra points on your worksheet if you plan to attend weekly “success meetings”. What? You need more inventory because you’re going to waste your Monday nights at rah-rah sessions?
Give yourself more points depending upon how many appointments you’re going to hold each week. Don’t forget that you’ve been lied to about how long an appointment will take, and you don’t yet realize that no one wants to have classes. No big deal. If you don’t know these things right away, you’ll give yourself a zillion points and you’ll “need” more inventory.
Now look at the “goals” toward the bottom. I think a lot of women get involved in Mary Kay and have those goals up front, because they have no idea what it will take to get there. (i.e. They’ve been mislead in the recruiting process like 95% of the recruits are.) But if they have those goals… voila!… they automatically have 8 points and “need” $1,800 wholesale.
So what do I wish I would have known then?
- All the guidelines about how much inventory you “need” are inflated. No, Mary Kay Cosmetics and your sales director are not looking out for YOUR best interest. They are looking out for their own, and that means pushing you to buy as much as possible.
- $600 is the magic number for inventory, and will the be the lowest option that your recruiter offers to you. This is because the contests run by Mary Kay Cosmetics all depend upon “qualified” recruits, and qualified means that they have ordered at least $600 wholesale.
- The company changes the products on a regular basis. Products are discontinued, formulations are changed, and packaging is changed. They do anything they can to change the product so that yours is outdated and no longer listed in the catalogs (and therefore harder to sell). You’ll need to “invest” in the new products because that’s what’s in the catalog.
- Your sales director will try to convince you to stock inventory because women won’t buy if you don’t have it on hand. That is not true. Those who have inventory do not get significantly higher sales. They might have a few extra items sold here and there because they have it on hand, but it’s not enough to justify sticking thousands of dollars into inventory.
- Your sales director will try to convince you to stock inventory because it will cost you $9(ish) for shipping each time you order from the company. It is not that big of a deal. Even if you placed an order with Mary Kay Inc. every single week, in a year you would spend less than $500 on shipping. That is still less than the interest on a credit card or loan. Do you want a few thousand dollars out of your pocket and into inventory, or would you rather pay a little shipping fee when you need something? Oh, and they always forget to tell you that even if you have inventory, someone always seems to order something you don’t have on hand. You need to place and order and pay shipping for that too. So why not avoid inventory and order on an as-needed basis so you don’t get stuck with any outdated products?
- In order to receive your products at wholesale (50% discount off suggested retail), you must be “active”. Active status is achieved in the month you place a minimum $200 wholesale order (A1) and the following 2 months (A2 and A3). Example: You order $200 wholesale on April 6. You are considered active in April, May, and June. After June, you must place another minimum $200 wholesale order to receive your discount.
- Your consultant agreement prohibits you from buying products from anyone other than Mary Kay Inc. Why? To force additional purchases from corporate. If you were free to buy products from another consultant, you would both benefit when you need a couple of products to fill an order. By forcing you to buy only from corporate, Mary Kay Inc. profits from another wholesale purchase, especially if you must purchase the minimum $200 wholesale.
- Your director may tell you that it’s against the rules to trade products with other consultants. That’s not true. The consultant agreement only specifies that purchases of products must be made from Mary Kay Inc. It does not address trading between consultants. Your director has told you it’s against the rules in order to try to force you to order from the company and pad her commission check. You should ignore her, and trade products if you can find a consultant with what you need.
- The lure of “free products” when you first sign up is available during your first AND second month as a consultant. Sales directors try to get you to purchase an inventory package of $600 wholesale or more during your first month in order to get product bonuses from Mary Kay Inc. Those bonuses are available when you make an inventory purchase in month one or two. Example: You sign up on September 20. If you purchase an inventory package of $600 wholesale or more in September or October, you can receive free products. If you wait until November, you will not receive free products, no matter how much you purchase.
- You can use Mary Kay’s “ product repurchase” option at ANY TIME. Mary Kay will buy back from you an amount of products equal to your wholesale purchases from them for the last 12 months. (Many recruiters and directors will lead you to believe that the repurchase option is available ONLY in your FIRST 12 months with the company. This is not true. It can be done at any time.)
- In the U.S., the amount you receive back for your products in the product repurchase will be based upon the most recent wholesale price of the products, which could be lower than what you paid for them. Example: You purchased a limited edition item for $10 wholesale. Mary Kay has put it on the “pink sale” at a reduced price of $7 wholesale. You will only get credit for a return of $7 wholesale. (Some consultants have successfully gotten their actual purchase price back on items that went pink sale, however, by providing copies of their purchase receipts.)
- Limited edition items almost never “run out”. If they do, it is only because the sales directors scared everyone into thinking they’d run out, so everyone bought more than they needed. This tactic is often used on the Christmas items. Sales directors want you to buy, buy, buy to help pump up their commission checks. The bottom line is that limited edition products do not sell as well as they’d have you believe. And if MK really does run out, you’ll be able to find plenty of limited edition products on eBay!
Oh, how I know that the Kaybots are seething because we’re telling their potential recruits about this. They are able to frontload much more when the whole story isn’t out there!
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Tags: inventory, minimum wholesale, trading inventory
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Comments (10)
Lazy Gardens
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How many dollars worth of product is sitting on the shelves in the picture?
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morningstar
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8K at least!
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anne sibell
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Ok- Please note that if you visit any cosmetic counter that they do not have large qtys on hand as shown in this display picture. Seriously, the stores have huge banners, but check under the counter and you will see much less product. Also their back drawers for product are on the empty side. This is b/c they do not stock what they do not sell much of in their demographic area. This was such an eyeopener for me, I had more cosmetic stock than dillards, macys, and bonton put together. Just a 10K lesson for me. Let it not happen to you, look around so much competition, MK would tank in a NY minute if not for consultant over purchasing for their non existant (i.e. future clients).
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TRACY
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And here’s another good point about cosmetic counters: Kaybots often say that they have inventory so beauty consultants have to have inventory to compete with them. Not so. A cosmetic counter in a retail location with heavy foot traffic is completely different than the individual beauty consultant. One of the reasons the cosmetic counter can afford to have inventory is because the high foot traffic leads to substantial sales and relatively fast turnaround of the inventory. With the individual consultant, it’s almost impossible to turn the inventory fast enough to justify the high cost and the risk of obsolescence when MK changes packages or discontinues products.
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Ginger1819
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These points about cosmetic counters are very true. I spent two years as a counter manager for Lancome in Rochester, NY. We kept detailed records of what was selling and what was not. We got inventory shipments in every week and we sent unsold inventory back monthly. This is called INVENTORY MANAGEMENT and all cosmetic counters do this – they have to in order to stay profitable. Unsold inventory in the drawers at these counters is a liability – just like the inventory sitting on a kaybots shelf. Tracy makes a very good point about foot traffic as well – I was a high-volume counter and 90% of my customers walked up to me to make purchases. There is still a component of servicing the customer, (mailing out promotional flyers, pre-selling for gift with purchase, etc.) but most of my best customers came right up to me while I was at the counter.
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Pinkiu
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When I was a makeup artist for Dior and Chanel, I had noticed even during big events the amount of product was just about enough for what we would sell in that given 3 day period. No more. That means that someone tracked inventory vs sales during these events. We never had much sunscreen or bronzer during winter. We only had enough Jadore or Miss Dior sets that was anticipated to sell. We never had all of it at once. It was sent weekly for what would sell that week. Occasionally we sold out of a product, but as a good sales person, I knew enough to figure out whether they wanted that one and only product or if they wanted that product in general (think mascara or eyeshadow or lipstick). If they were looking for lipstick, I could usually find a flattering one in another color because I understood skin tone and color. All women can wear a variety of color. It’s how you frame the sale. “How about we update your colors? I have rich shades that would look fabulous on you and would be great additions to your lipstick options.” But of course MK doesn’t teach you how to sell.
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hobby girl
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I just had to share, when I went on to the unitnet site for the EESSD in my area she had listed how much she bought to be a star consultant this quarter, which was well over $20,000, Also her family members which are her recruits spent over $3-4,000 each on inventory. I am guessing this was all done at the end of the year to make the million. I added it all up to be around $50,000, how crazy is that . For recogniton? An extra $5,000 in commision? A suite on the top director trip. That is crazy. I just had to share how ridiculous that is. Wow what a mentor!
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PINK NO MORE
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Wow. I never thought about the comparison at cosmetic counters before. Great point. P.S. I am a bit obsessed with this site since my discovery a couple of days ago LOL
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LaRouge
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I joined Mary Kay nearly a year ago and I was practically harassed into buying an inventory but I kept my foot down. In my world, no means no. And if my intuition says no then that DEFINITELY means no. I kept telling my SD and DIQ that I had no money for an inventory and was already in so much debt (car, school, house) that I did not need anymore. I figured if a woman wants something bad enough she is willing to wait for it especially if it is going to be delivered to her by a friendly consultant. I’ve recruited 3 women for my team so far and all 3 of them have come to me confused and stressed about getting an inventory because my SD was pressuring them as well. I took them aside and told them if they weren’t comfortable with it than don’t let anyone pressure them into it, there’s a reason their gut is saying no. I told them that even though they wanted an inventory SO BAD, they should wait. Wait until their sales picked up, wait to see what they sold the most of. If their business took off and they could afford an inventory than they should go for it then. None of them bought inventory and thanked me for letting them know it’s OK to not purchase inventory, because they weren’t selling anything. They tried, I tried, it’s just not working. I was recently hired on by Sephora Cosmetics and they knew all about Mary Kay. I think they saw how driven I was to work with people and makeup and saw how lost I’d gotten trying to do so (I left my $12 p/h, 40 hour p/w, 5 year job for them) and that was one of the factors as to why they hired me. I’m grateful for the back bone and confidence this company has given me but in all honesty, I felt like I was drowning and didn’t know how to go up.
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Pink Truth » Mary Kay Offers 90% of Your Money Back
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[...] Kay sales directors and recruiters are notorious for using misinformation or unethical tactics to stop consultants from returning inventory. This includes lying about the program or otherwise [...]
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