Krystal Shada is a wanna-be national sales director in Mary Kay Cosmetics. And she provides us the opportunity to check out who is selling Mary Kay products. When I point out that Mary Kay has lots of characteristics of pyramid schemes, I am often told that WOMEN ARE SELLING THE PRODUCTS AND PROFITING!!!
Occasionally, I like to check out this claim of retail sales. Because I know from my experience in Mary Kay and from the experience of thousands of others who have participated at Pink Truth that actual retail sales are very small. Almost no one is able to make a living from product sales.
If Krystal Shada is a Mary Kay superstar and is at almost the highest level in the pyramid, you’d think her consultants know how to sell the products. But they don’t. (It’s not just her unit, it’s every unit.) Below you see the Unit Wholesale for May 2013, with a total of $20,424 wholesale ordered by consultants. That is $40,848 retail value of products ordered by the unit members.
And this is the fun part. Below you see the actual retail sales of consultants in the Shada unit. The total is a whopping $845 retail value. You can see that exactly THREE consultants reported selling products, with sales figures very minimal. In contrast, 58 consultants placed orders during the same month.
Yes, ladies, you are reading that right. Of the $40,848 retail products ordered by women in the Shada unit, $845 was reported as sold. That is 2% of what was ordered.
I know the typical Kaybot excuse for this: “Not everyone turns in their weekly accomplishment sheet! Lots of people sell things and never report it to the sales director!” The other excuse is something like: “Some of these consultants are personal use consultants so they never report sales!”
Let’s suppose that’s true. Let’s suppose only one tenth of the total sales are being reported to Krystal Shada. That would mean that the unit actually sold $8,480 of retail products, or about 20% of the total ordered. That means that 80% of the products, or over $32,000 retail ($16,000 wholesale) is left unsold and sitting on the shelves of consultants.
We’ve done this kind of exercise before… looking at sales of Mary Kay Cosmetics in various ways, making assumptions that are very generous to the consultants…. and STILL we end up seeing that very little is being sold and almost no one is making a living from selling the products.
This is just a friendly reminder that real sales to actual third party customers are almost non-existent in multi-level marketing.