Finding Unit Production in Mary Kay Cosmetics
Mary Kay nsd Pam Shaw teaches that ordering lots of products is the most important thing for any new consultant. Directors will have the most production when they coerce new consultants into these big orders. $3,600 is best!
Finding Unit Production! There is a Win-Win way!
When investing your time as you strategize your month, you must prioritize your hours by designing your day most profitable to least profitable. I recommend using a yellow STICKY pad from the DESIGN BOOK to track your every half hour so that you are not losing time. Design this ‘slice’ of your weekly plan sheet each evening along with your ‘6 most important things to do list’ before you go to bed, so that when the POWER HOUR (first working, proactive, income-producing hour of your day) arrives, you don’t lose time in making lists.
Philosophy #1 – We lose people for two reasons.
1. Time Management challenges
2. A wrong perspective of the value of FailurePhilosophy #2 – Most Beauty Consultants need $3600 on shelf. All Working and aspiring Star Consultants need $3600 on shelf. If they do not begin with $3600 or get there within their first 90 days, they never get there.
Why do I believe this?
- The EMERALD Star level of 3600 has been around for many years. Prior to TimeWise, prior to an increase in powders, foundation formulas, lipsticks and glosses and new shadows and cheek colors. We have added multiple products since we determined $36oo was ‘Profit Level’.
- If a Consultant orders $600 initially, she feels she has ordered A LOT OF MARY KAY. She goes to her first class, sells $400. $200 of it she doesn’t have in her trunk. Now she has to reorder and redeliver to FIVE different homes. TIME. She is feeling overwhelmed, busy, disorganized. This leads to borrowing product, comprised relationships with sister consultants and guilt. This leads to mismanagement, no profit, and frustration. This leads to “Mary Kay is great, and I love it, but I am going to need to put it on the shelf for now”.
- With $3600 on shelf, she:
- Gets @ $800+ Retail value FREE! This is profitable!! Pays for her Showcase, personal products, business cards, etc. Figure it out!
- Gets the highest STAR on her ladder, setting the pace to excellence in her future (Once the mind has expanded, it can never return to its original form).
- Gets a private $ Management training from you. (I never did group Money Management training with consultants. One on One after ‘on profit’ to show her how to pay down her investment and handle 60-40. Prior to profit, all they need t oknow about $ management is to make the min. payment on their cc or loan and invest 100% of all they have collected into product so that they can GET TO PROFIT).
- Receives a ‘Profit Pin’ for her Red Jacket (or business suit) sleeve in CELEBRATION in front of your Success Meeting.
I believe you can promote this with confidence IF you have a good product Money Management habit yourself, are willing to support her Business Debut, follow up with her Power Start booked and coached, support her with adding her first 1-3 recruits (= a commission check which can pay down her loan also), and make HER MONEY YOUR BUSINESS.
I believe I first heard Top Director, Lisa Ann Harmon say it, “With a 600 she is frustrated and scared; with a 3600, she is only scared.”
GO TO YOUR PRINTOUT!!!
The AREAS to add production high to low:
1. New Consultants. Get the agreements; Get the STAR order.
2. New Consultants who ordered last month who need to place the MOST IMPORTANT order—the 2nd order!
3. New Consultants from the past 2-3 months who have not placed their Initial Orders.
4. Base Consultants who are working but who are not at Profit. Make suggestions and stay on top of it.
5. Base Consultants ON Profit who are re-investing based on Sales and ordering New or Seasonal Products. Show them how to increase their sales
6. Hobby and Personal Use consultants. Always keep them informed about new products. Make sure they know your personal shopping website so they can look often at those products and looks. AT THE END OF A CHALLENGE OR END OF A YEAR, make sure you allow them the fun and privilege of being a part of a TEAM. Placing $200-$400 orders is something they may WANT to do!
7. Former Consultants. Treat this group as your BEST Customers! Seriously! Send them mailings, email promos ( Do not overdo it). Remind them via email or snail mail when mo. 13 is coming so they do not have to order a $20 Second- Chance package.Now you need a game plan. Who are your RECRUITERS??
P.S. You are the BEST one, and the Company pays you 26% to
personally recruit. Where are all those new consultants going to come from? PRIORITIZE YOUR TIME AND BOOK YOURSELF AND SET YOUR EVENTS WITH THIS PRIORITY!!!How good is your Orientation Process? Are you using Next STEP audio/cd as a layer for an Inventory Decision? I am told daily that people get STAR orders, EMERALD orders by using that tool. Are you using a Color Brochure to show the sample packages and FREE bonus products as a ONE TIME, Initial Order offer?
When will you PHONE follow up with NEW, New last month, New in the last 90 days to pace them along? Do you have a chart for this communication?
How are you increasing the SELLING skills of your BASE? [NOTICE WHERE THIS COMES IN ON THE ORDER OF PRIORITY AS TO HOW YOU INVEST YOUR TIME?] Are you ‘upping’ their STAR goal? If they are the same star repeatedly, something is off. Either their Customer Service is poor or they slowly begin to sell to fewer NEW clients. Their wholesale orders should be on the increase if they are increasing their Customer Base.
Are you teaching them to sell Completes at SCC? Not telling, teaching! If you don’t SHOW and TEACH them to put together Complete Collections for each CLASS guest, they will never HAVE that amount of product. And they will eventually, even if subconsciously, sell ‘CONVENIENTLY’, not putting themselves in a bind by selling what they don’t have on shelf. If they PUT A COMPLETE SET together for EVERY GUEST, they may not sell completes to all guests, but they will sell more to each guest than they would have. (I teach this principle on the PERFECT 10 tape. Although the products have changed, the principles have not.)
THOUGHT: How many of your consultants could hold 10 Classes this month and put together Complete Sets for an average of 4 guests per class? How many of them could hold 5 classes in 2 weeks without running out of product? (20 Complete Sets?)
Opinion: If you don’t have this kind of product and Roll-ups on
hand, you are working from SCARCITY and poor time management.Do you keep your Hobby, Personal Use and Former Consultants informed AS CLEARLY as you would your best Customers? I hope so! After 6 mos. of not ordering, they are not receiving APPLAUSE. So they don’t know about new products or discounts or promotions, etc.! Make sure you send them samples, look books, sample $200 orders and love “I appreciate you” notes.
Remind them to use their MK discount for shopping to order Bridal, Mother’s Day, Christmas, Birthday, etc. gifts. What is your SYSTEM for communicating this?
[NOTICE WHERE THIS FALL IS IN THE PRIORITY ORDER OF YOUR TIME INVESTMENT.]
‘WHAT YOU TALK ABOUT, YOU BRING ABOUT’.
Make Getting to and remaining ON PROFIT a consistent and repetitive TRAINING! Make it special. Make it elite. Your consultants cannot reap the ABUNDANT rewards of this opportunity if they are working from scarcity. REWARD and RECOGNIZE what you want to create more of.
* to have a consultant verify her PROFIT STATUS, I would ask her to take a paper inventory on an order form and hand it in to me so I can see the $3600 wh. Excluding Limited Edition products. Once she has done that (if it is after her initial order), I will award her the Profit Pin, host the Success Meeting Celebration, and have my One-on-One Money Management Training over coffee with her.
So how sick is it that Pam only gives new consultants “money management training” AFTER they’ve racked up $3,600 or more on their credit cards?
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Comments (29)
raisinberry
| #
I got one thing to say this fine morning.
$8,000.00 Retail. On the Shelf.
$8,000 retail waiting for that next $175 week. And then the next $300 week, and then the $220 week, and then the Oops everything cancelled week.
Eight K. Sitting on the shelves…servicing a $700 month.
But hey, you do have your “profit pin”.
When “We (they)determined” what profit level was, I wonder what were the parameters? Anybody? I wonder who coined the label? I even now wonder if they knew what “profit” meant.
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MLM Radar
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You miss the whole point. Proft Level has nothing to do with the consultant’s profit. Profit Level is when the Director sees a Net Gain after expenses payback on the time required to convince her mark to place a big order.
If the Director spends 5 hours convincing her mark to order inventory, but her mark only places a $600 order, that’s not time well spent for the Director. The $78 commission will hardly pay the electric bill, much less give her any money leftover to buy lunch for the week.
But if the Director’s 5 hour time input convinces her mark to place a $3600 order, big enough for her Director’s 13% commission to cross the $450 line, that’s sheer profit!
Mary Kay calls it “Profit Level” and it is. They just “wink wink” never clarify WHOSE profit.
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raisinberry
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OOOOhhhhhhh! Thank you MLM! Holy Cow, I never even considered that “profit” level definition before! Whaduya know…you can learn something new everyday!
There ya go, those of you newly recruited and/or lurkers! When she tells you about profit level, ask her, “WHOSE PROFIT!” LOL
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gotheart
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Great comments.
Especially the WHOSE PROFIT!
Now ain’t that the truth.
The first time I heard “Profit Level” was from retired NSD Wanda Janes.
I do believe the real meaning of Profit Level is exactly what MLM Radar said. However at that time SD masked the meaning behind what the woman herself, Mary Kay, preached. I heard it many times. This was in the early 70′s.
“Never take a profit until your inventory is at the $3600. level. Then you can pay yourself.” We were manipulated( didn’t know it then, but do now) that to take a profit earlier was to be embezzling from yourselves and when people embezzle in business they go to jail. That was the money management that was taught.
Of course at that time the product line was much smaller and it was feasible to have 3 to 4 of everything. OMG an IBC wanted to have a full inventory too. Gotta do it the Mary Kay way.
It was a never ending hamster wheel of emotions trying to keep my inventory at that level. Which was/is exactly what Mary Kay wanted, on going purchases from “her customers”. So wicked. I was really good at selling the product.
When Mary Kay came to town to help Wanda build her area for NSD, she personally presented me with the ribbons I earned. It makes me laugh to say that now, seeing me in my black velvet dress, receiving the ribbons. Black velvet, summertime, sheesh.
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MLM Radar
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The whole purpose of the $3600 inventory level is to give your SD her $450+ profit before you get yours. Period.
This idea that you are “embezzling” from yourself is crazy. Embezzling means you take something that belongs to someone else which has been entrusted to you. There’s a big difference between embezzling and collecting on a debt. Anyone who throws around the work embezzling is conveniently overlooking the fact that you used your PERSONAL money to buy your MK inventory, and your MK “business” owes you. If you took out a small business loan to buy your inventory, you still personally guaranteed that loan and have to pay the bank whether or not your MK business pays you. Repaying a debt is not embezzling.
IF you had set up your Mary Kay business as a separate legal entity which filed its own business tax returns, independent of your 1040, and IF your Mary Kay business did NOT owe you massive amounts of money for the inventory (plus other expenses) you purchased on your personal credit cards, then yes, you could be an embezzler. The only MK people likely to be in that position are the NSDs themselves.
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enorth
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“all they need to know about $ management is to make the min. payment on their cc or loan and invest 100% of all they have collected into product.”
For shame. How does she sleep at night?
“make HER MONEY YOUR BUSINESS.”
This says it all.
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Briansmama
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I’ll bet the “profit” in “profit level” refers to the director! The more consultants she pushes to “profit level”, the bigger the director’s commission check.
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Scrib
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“Make Getting to and remaining ON PROFIT a consistent and repetitive TRAINING! Make it special. Make it elite.”
NSD Pam Shaw is one of the biggest deceivers and manipulators in the Mary Kay World. Her words bring to mind those of MK Corporate spinner Crayton Webb (in his interview with KERA) and what he had to say about how MKC “helped” consultants deal with their MK debt:
“We have two departments, one set up just to educate our sales force on how to…not get themselves in too much debt if they do decide to buy inventory. And we have another whole department that’s just focused on…insuring that our independent beauty consultants…don’t get themselves into trouble by using pressure tactics or other things that are absolutely not okay.”
I think drilling the $3600 order into consultant’s heads by “making it special and elite” would be considered a pressure tactic, wouldn’t you? Clearly, tactics like NSD’s Shaw’s – tactics that are “absolutely not okay” – apparently ARE okay in the MK world, otherwise Webb and his minions would be telling Shaw and her NSD sisters to knock it off and stop the blatant frontloading.
Whatever makes the “God First” racket more money, I guess.
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Siri
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When I first saw the word roll-ups, I thought they must be a kind of rollmop. MK branching into seafood…
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Siri
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Mmmm… pink seafood sauce. A MK prawn cocktail! Sorry ladies, am starving!
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Lazy Gardens
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“Prior to profit, all they need to know about $ management is to make the min. payment on their cc or loan and invest 100% of all they have collected into product so that they can GET TO PROFIT).”
Can Pam Shaw show any data that supports her statement that there is a magic level of inventory where PROFIT is assured? Of course not. She’s pulling it out of her pink tutu-covered nether regions.
Every business management class I have ever had, and every business I have ever worked for has emphasized that keeping inventory LOW is the way to maximize profits … and meticulous records of what is selling and what is not selling is the only way to do that.
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PinkCurious
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i’m interested in how MK website sales work, commission, and if MK delivers direct.
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Lazy Gardens
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You get the same commission, but you pay for shipping direct to the customer.
“All Star Consultants will be charged an $8.75 shipping and handling fee* plus applicable sales tax.”
Unless you collect the shipping and tax, you could end up losing money on small orders.
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pinkiu
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If I remember correctly, that level has one of everything and maybe some items more than 1 item. Think about it…how much perfume did you sell? And your SD had you order how many bottles? If most of your clients/family were black or white but you have foundations, powders, and makeup shades for a different skin color than who you typically will service, what are you going to do with all of that product? SDs will PURPOSELY have you order items they know you will never sell so that you will have to order the next quarter. Her profit level is the exact reason. Thank you for sharing this.
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Tiamet
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I think this is a key point that new consultants need to realise – the chances are, you won’t need ‘a full store’, it’s more likely you’ll need 3 or 4 of one thing (which will probably be sold once each to members of your warm market) and none of another. What is the point of having one of each if it’s not to maximise director commission?
It is crazy to buy products before properly assessing which items the customers want to buy in any given area. No reputable store would do it, yet this is exactly what recruiters push. I would say that the only purpose is to maximise director commission, but there is a secondary purpose, namely to ensure that the new consultant has to reorder even with $$$ left in inventory if they are lucky enough to sell anything from the original stock.
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Lazy Gardens
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there is a secondary purpose, namely to ensure that the new consultant has to reorder
And that also increases director’s commissions.
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Michelle
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Two more thoughts:
- I was trying to think if I had a retail client that would have to pay up-front for $3600 in inventory, and can’t think of a single one. Usually, when you’re buying that much inventory from one supplier you get at least 30 days to pay it the invoice, depending on your credit terms (brand-new businesses may have to do up-front payments, but I’ve generally only seen that with people who’s personal credit is bad. Most of the time, wholesalers will “front” some inventory even to brand-new retailers, even if they make them pay for part of the order up-front). I have some clients who have longstanding relationships with wholesalers and they get SIXTY day terms. Some of those have gotten very good at tracking sales and can manage to move most of the inventory they order from a given wholesaler by the time the bill comes due. They make sure they have cash coming in to cover the cash going out. Paying cash (by which I mean cash money or credit) up-front for thousands of dollars in inventory and then HOPING you sell it? Craziness.
- $8,000 in retail-value inventory is a ton for a single-owner, home-based business. I have a little lady who has a storefront, small store, maybe 1000 square feet, in a touristy area of our city. Last financial statement she gave me, the total retail value of her inventory was around $20,000. Her shop has good “turnover” (she sells what she brings in pretty quickly) and on an average day she averages around 30 transactions, average transaction value around $18. $8,000 in inventory that’s going to sit in someone’s house and must be taken out of the house to be sold, at parties or events? Again, craziness. Like, that is B-A-N-A-N-A-S. It should be totally obvious to everyone that as has been said elsewhere on the site, the real customer of Mary Kay is the consultant.
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Lazy Gardens
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Usually, when you’re buying that much inventory from one supplier you get at least 30 days to pay it the invoice,
You can bet that Mary Kay CORPORATE gets net 30 or net 60 terms wherever they can, even though the consultants must pay cash.
However, Mary Kay saw for herself what offering goods on credit can do to a company – her friend Mary Carter Crowley’s company (World Gifts) almost went under despite great sales because of the cash flow problems. Money wasn’t coming back fast enough from the field reps. So MK decided to offer slightly higher commissions in exchange for cash up front.
Hence the statement: “We’re a debt free company”. They are, because they shifted the cash flow problems down the line to the IBCs, who go in debt.
Even at the low volumes I buy, the wholesale nursery will give me a small % for cash up front … so I collect cash from the clients at full wholesale and buy at discount and pocket the difference as my markup. Everyone wins
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Michelle
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I’m a small business consultant and work with small retail businesses all the time. In all small businesses, cash flow is king but this is especially true for small retail. Having cash is essential to being able to pay your bills even when you have a slow sales day (or week, or month). I urge my small retail clients all the time to hold on to cash rather than sink all of it back into inventory, and to plan out their big inventory investments so they are making the investment when it is most likely to sell quickly (i.e., in the mid-spring for summer, or in the late summer for Christmas). In most small retail businesses, you want any inventory you buy to move within 90 days – 60 is better, and 30 is best. So it does not make sense to invest in any inventory you do not see a way to sell within 90 days, at the outside. I tell small businesses all the time, inventory is great, profit is great but lack of cash will turn out your lights – meaning, inventory and paper profit will not pay the utility company when the electric bill comes due. There is no set dollar level of inventory at which any sales organization is automatically “profitable.” It depends on how much is being sold over an aggregate period (I like to look at a month or a quarter), and what the business owner is paying for the merchandise. For example, if your wholesale cost on a given item is 50% of the retail price, but you have to discount the item 50% to move the inventory, you are in a negative profit position (the sale price vs. item cost is a wash, but you’ve lost money on your time and on overhead) – and that would be true if you had $5,000 in inventory or $500 (or $50,000). Part of what really irks me about Mary Kay is that they prey on women’s financial ignorance. I have had Mary Kay consultants call me for small business consulting and they get very, very offended when I explain that their Mary Kay directorship does not count as a “business” in my book. But I have yet to see a Mary Kay consultant that keeps books according to generally accepted accounting practices, manages her inventory appropriately, or even thinks about monitoring things like their cash flow. So in my book, it’s not a business. Sorry.
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Kinzie
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What an excellent summary of how REAL businesses should manage their inventory and cash flow. I have a friend who works for a local small business counseling office and she says the same thing about MLMs: THEY ARE NOT REAL BUSINESSES. When she asks people who come for advice about getting into an MLM to see their business plan, etc., they get a blank look on their faces. It is very unrealistic to think that one can just start up a retail business without one.
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enorth
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So, the 8 1/2″ X 11″ Lipstick Challenge tracking sheet with a border of dancing pink lipsticks does not reflect generally accepted accounting practices. Who knew?!
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I Have Integrity
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Correct… It isn’t good accounting practice, but a DARN good business plan. LOL
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flaming go
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Hi Michelle! I’d like to see a front-page article on your experiences consulting with MKers in comparison of how small businesses typically should operate to be profitable!
Thank you for your business insight!
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enorth
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Me, too!
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Michelle
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I would love to write that article. Who should I send it to?
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Lazy Gardens
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I have yet to see a Mary Kay consultant that keeps books according to generally accepted accounting practices, manages her inventory appropriately, or even thinks about monitoring things like their cash flow.
As soon as they do this, they would see that they are losing money and any sane businesswoman would immediately stop throwing money down the pink rathole, send her product back and get out.
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Teesa
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The vast majority of product I returned to do the Blue Check Boogie consisted of the products my SD ordered for my first order…all the shitz I would never sell and the subsequent new amazing products I had to have to be successful. Five months after becoming free from the pink fog I
still shake my head that I was so sucked in and manipulated. As we all know, the little voice in your head is screaming…hell to the NO…but the brain is hearing impaired!
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JanetBerry
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Heard from my niece that she was in a restaurant last night (central Florida) when a young woman approached her & her boyfriend’s table. Handed her a fake rose that reeked of cologne and gave her a card to fill out. Name/address/phone etc. The card asked if she would like to be entered into a drawing for a facial, a color demo, a make-up class, & would she like to know more about a business opportunity?
The card was white, with no business name or other identifiers. She asked the girl if this was Mary Kay and when she said yes, Katie gave her back the blank card and the reeky rose.
I told her to call the restaurant & give them hell. The MK girl may have been the owners daughter or friend but that didn’t matter. Tell them you do not appreciate a sales pitch while eating dinner.
Tell them you’ll NEVER eat there again, then give them a review online which mentions the Mary Kay troller right up front. What frickin nerve.
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PinkfanbutnoMKfan
| #
Wow… Talk about TACKY!
I work as a cashier at a grocery store and a woman came through my line and tried offering me a free facial sometime! I politely said no, thank you! She didn’t look too happy when she left. But I thought it was rude, I had a line of costumers waiting and I’m not going to stop doing my job to give some stranger my name and personal information.
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