The Inventory “Investment” Con in Mary Kay

The secret to getting Mary Kay consultants (especially new ones)  to order lots of inventory is overcoming their objections. New consultants typically are skeptical about spending thousands of dollars on inventory that they’re not even sure they can sell. But no need to test the waters and hold a few classes before you order! ORDER NOW! You’ll sell tons. Trust me.

And so the con game goes. You want to be successful, don’t you? Would a store open without anything on its shelves? Do you think women really want to wait for their cosmetics? Order now. Order often. Have lots on hand and you’ll be successful.

Still not convinced that you need to order thousands of dollars of inventory from the start? Your Mary Kay director will bring out the big guns: It’s an investment.  Debt bad. Investment good. Investment is not debt. Credit card or not, it’s not debt. It’s an investment. Get it? An investment in your family’s future.

More is more. More is not less. Not less money to feed your children. Not less money to put clothes on their backs. More products means more opportunity to profit.

And the below story is one that has been circulated for years in Mary Kay. There’s only one huge problem with it: The story assumes that you’ll be able to sell all of the inventory you’ve ordered. Anyone who’s ever been in Mary Kay and is honest about it will tell you that it is extremely difficult to sell the product.

Oh yeah, there is an occasional woman who is beating down your door to order something. Once in a while you’ll find a hostess who has 8 women show up for your class and you get 5 new bookings. But those instances are so few and far between. The truth is that very little of the Mary Kay products are actually retailed. The vast majority (I estimate more than 80%) actually sits in basements and garages.

So while this “investment” con sounds great when you’re in the pink fog, those of us out of Mary Kay recognize the story for what it is: pure fiction.

We have some money to invest and I was thinking about the story one NSD told. While she and her husband were lolling around the pool he said, “Honey, I meant to tell you; I invested $10,000 in (whatever) and we will make 7% interest in 7 years.”

She said, “Oh, really?” He said, “What’s wrong?” She said, “Nothing.” He said, “I know something is wrong; what is it?” She said, “I know you think of yourself as a great businessman.” He said, “so tell me what’s wrong.”

She said, “Well, I was thinking that if you had invested the $10,000 in Mary Kay products, I would have received 13% (her Unit Commission) on $10,000 immediately – that would be $1,300, plus, some gorgeous prize, probably a TOP TRIP with Mary Kay and 50% – $10,000, when I sold it!

And it wouldn’t take me 7 years to sell it! That would be $11,300 we would make on our $10,000. A consultant with 5 recruits would make the same commission as the NSD!

Do you look at your MK inventory as an investment, or something you hope you can sell? What are you making on your Money Market Account? 4%, 5%? How about your savings account, 2 1/2%, and CD’s, 5%? If you’re doing GREAT in the Stock Market you may make 15%, (and no one is doing great in Stock Market right now), or you may lose it all! We have looked into different plans such as an annuity which makes 7% if we invested $15,000 and leave it there for 10 years. Bonds could make 4% or 5%, if interest rates are high, but they’re low so that won’t work.

I have money in a IRA. That’s good. However, I am past the age where I can add to it and if I take it out I am taxed on the full amount THIS YEAR. Everyone is telling you to plan for your retirement. I do believe that you need to start some kind of retirement RIGHT NOW!

Oh, you aren’t making enough money to save any? Work your MK (along with your regular job) and put your profit into a retirement account. You say you don’t have time to do anymore than you are doing now? Sure you do. You better, if you want any money when you’re 65 or older.

The best interest you can get on your money RIGHT NOW is to invest in your Mary Kay Inventory (at 55% UNTIL JUNE 28TH) and learn to be the best Mary Kay Consultant in the business. Listen to motivational tapes in your car daily. Other consultants are doing it. Find out how.

Do you get tax benefits at your other job? What if you can’t sell it? Oh, well, the only reason you wouldn’t be able to sell it is if you never told anyone that you were a Consultant. What if you have to send it back to Mary Kay. So what! You had to have sold some of it at 50%. You can’t lose any money.

What about the interest on the loan? What about it? When you are working a profitable business, making a lot of money you need tax benefits. It is important to get your TAXABLE INCOME down to as close to zero as possible. Say you are making $40,000 at your job, then want enough tax shelters to get it down to as close to zero as you can. You probably don’t have ANY tax shelters working for someone else. With Mary Kay you do!

Maybe you do want to quit your job but you say, “The Company pays for my insurance”, not true, the Company doesn’t pay for your insurance, you do! They just don’t pay you what you are worth because they are using the money they should pay you to pay your insurance. DO YOU KNOW YOU CAN PAY FOR YOUR OWN HEALTH INSURANCE? THINK ABOUT IT!


  1. Iescaped

    How or where does one even start with this nonsense from MK?

    I did sell off $17,000 wholesale in inventory in 2015. Did I even come close to 50% mark-up above cost? Heck No!!! Approximately $10000 was sold at cost or maybe 10% above. That wasn’t in anyway profit since my Sales tax rate was 8.6%.

    It cost me actual money to rent a space at a local Swap Meet on the weekends from March to September. And of course drive there and my time. I played around with the prices enough to know what the “magic” number was for this stuff to sell. And not just one face wash per day thank you!

    The last $7,000 was sold to a couple of wholesalers for 50% of cost (yep lost money there, but the dump was looking like a viable option).

    All the flyers, scripts, motivational CDs, etc from the SDs, NSDs and Mary Kay put out there in a way that makes you think that selling any of this MKrap is as easy as just putting a sign in your front yard.

    I think that I spent over $20,000 in inventory with Mary Kay. Looking back, my odds would have been much better at the Black Jack table in Vegas! Even if I had lost it all I know I would have had more fun! And hey, didn’t Laura from MKorpse say was the reason why most of us joined during her little clip from the 20/20 piece??

  2. MLM Radar

    It is important to get your TAXABLE INCOME down to as close to zero as possible.

    Ah yes, here we go again with Mary Kay tax advice. Remember, these are the same people who told you The Suit is deductible (it isn’t).

    The only way to reduce your taxable income is to LOSE MONEY. The problem is that if you’re in the 15% tax bracket like most folks, you have to lose $100 in real money to reduce your taxes $15. The other $85 is gone forever.

    I imagine she’s claiming that Mary Kay inventory is a tax shelter beause she’s telling you to deduct the entire cost of your inventory immediately. There are two problems with this:
    (1) If you deduct the entire cost immediately, you have to declare the entire proceeds from the sale as income when you finally sell it, if you sell it. Sure, you may have deducted $1,600 on your 2015 tax return, but when you finally sell it you have no cost left to deduct to offset the selling price on your 2016 tax return.

    (2) Real stores only order enough inventory to last 30 to 60 days. If your “business” is doing so poorly that you buy inventory in one year and sell it in another year (especially when you put the cost on a credit card), you’re in real trouble.

  3. pinkpeace

    This whole story is just another Mary Kay urban legend.

    No one just happens to invest $10k behind his wife’s back. No NSD would be caught dead with $20k retail product in her house. And the reason that products aren’t selling is NOT because no one knows you’re a consultant. It’s because your market is saturated and the products are overpriced.

    This would be laughable if it weren’t so pathetic.

    1. Lily in NYC

      I got a kick out of the first sentence -trying to subtly hint that a MK director would have enough money to buy a pool and have enough time to “loll around” in it.

  4. enorth

    And IBCs get stuck with silly MK products that no one is interested in, or that everyone knows are cheaper at a mart-store or Dollar Tree……a ped set with cheap emery board and toe separator? Men’s shave cream? Men’s “facial hydrator sunscreen”? Body wash? Hand cream??

    If MK would stick to skin care and makeup and make it the BEST in the market, maybe they’d be on to something.

  5. Timewiser

    This doesn’t even make sense!
    The thing that I keep looking at is the nonsense about having enough expenses to get your income as close to 0 as possible for taxes. My accountant always told me that after 5 years of 0 income, it would send a huge red flag for auditing. I’d be curious to know how many Mary Kay gals lie on their taxes.

    1. Iescaped

      According to my accountant, the IRS has very strict rules about “at home” businesses. Don’t show a profit after a few years and guess what— it is not a business but a hobby according to the IRS.

      But we figured that out anyway:)

  6. MLM Radar


    Not when you’re dumping all your “profits” back into Mary Kay inventory, you can’t. Remember what your Director told you? You have to reach “profit level” inventory before you start paying yourself. If you pull money out sooner – for any reason – you’re “embezzling” from your business.


    Besides, if you’ve never tried to get a quote on an individual health insurance policy, you may not realize just how expensive those “pay for it yourself” policies really are. When you have health insurance through an employer you’re participating in a group policy and get group rates. Sometimes very generous group rates. No such luck if you try to do it on your own.

    “Buy it yourself” is just another Mary Kay pick-up line, busted.

  7. tim

    when you say “Your accountant”, you mostly mean a guy who you see once per year to do your taxes?

    if the 5 years of zero, (or 2 in 7 for horses) was “real”, then Mitt Romney would be audited for his “horse business” each year.

    Even if audited, you don’t automatically lose. Hint: Mary Kay is not a hobby just because you have losses in 5 consecutive years.

    Be a bit more positive! The gas miles are either actual or straight line, which ever is higher.

    Home office, especially if you own your home, can be great.

    Do you include your cell phone, internet, subscriptions, computer, etc?

    Yes, your tax guy, trained by HR Block, may ask you to get a contractor to measure your rooms…. And he will be so conservative that he will not include a bathroom, hallways or any area that poses a minor risk to him. If you haven’t noticed, the cut-rate guys? Are very risk adverse. They don’t know how to represent you at an audit.

    Yes, MK advise sucks.

    But, so does the tax advise, most posted in commentary.

    Best wishes.

    1. MLM Radar

      if the 5 years of zero, (or 2 in 7 for horses) was “real”…

      Oh I wholeheartedly agree that a lot of tax advice posted on Internet forums isn’t “real”…. starting with the bit about 5 years. The real rule is that you have to show a PROFIT for 3 of the last 5 years, or the IRS will presume your “business” is a hobby. You can read all about the Hobby Loss rule on the IRS website.

      The IRS doesn’t have enough personnel to audit everyone, but that doesn’t make the Hobby Loss rule any less “real” when you’re the person sitting in their office watching them disallow all those expenses.

      Oh, by the way…. advice (noun) is spelled with a “c”: you gave her advice. When you spell it with an “s” that’s a verb: you advised her.

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