There’s No Such Thing as 50% Profit in Mary Kay

Those of us who have been hanging around Pink Truth for a while know that the idea of 50% profit in Mary Kay is a total lie. If a consultant sells all of her product at full retail, with no discounts and no giveaways, she has a 50% gross profit… out of which all other expenses have to be paid.

There’s not 50% profit, no matter how you slice it. And with this bit of sales magic, there’s even less profit to go around:

When you do a reorder or even meet someone say… “How do you like to get your cosmetics? Full price, Half off or FREE?”

She will say ‘what do you mean??’ You say… “Well – it is your lucky day – you were supposed to meet me – because when you become my customer you can have all of your cosmetics FREE for the rest of your life!!!!!”

For every purchasing girlfriend you get together for a makeover – you will get $10 of FREE MK! 8 girlfriends who purchase from me at a get together – you get $80 FREE!! So anytime you want cosmetics –just have a get together and you can get yours for free anytime- all year long!!!

Or… Half Off – Take the Look Book to work with you and get 10 orders for me and you get a HALF-OFF shopping spree!!! You can do this as many times as you want to!!!! Or – of course – my favorite – you can just purchase at FULL PRICE!! The choice is yours!!!

I realize that retailers all run sales and special offers that cut into their profits. It’s a gimmick used to get people in the door and get them buying. I’m not opposed to that basic marketing tactic.

Unfortunately, it seems so few sales in Mary Kay can be made without some sort of discount or giveaway. Every time you turn around, your director is telling you to give away a lipgloss, or offer a $10 free certificate, or give away hostess gifts,  and do a buy one / get one free, or discount the discontinued products.

Consultants certainly can’t earn a living this way.

10 Comments

  1. BestDecision

    And the 60/40 Split isn’t feasible in today’s world of postage, fuel, or operating costs. It’s a complete joke that we were taught to live on our sales profits.

    1. pinkpeace

      OMG – yes! I remember being in SD classes taught by NSDs who lectured us on how we should be paying all our bills with product sales and investing our commission checks. I remember thinking, “What is this woman smoking??” I guarantee you that they have never counted on product sales for their livelihoods.

      After expenses, product sales basically added up to pocket change. Can you imagine having to pay your mortgage every month on sale profits? Welcome to foreclosure.

      1. enorth

        I saw a SSD who offers free shipping on all sales. Her video showed how she packages the products in pretty wrappings. Between the packaging, samples, gas and shipping costs, she’s not making much profit. But she’s building her future national area.

        Good thing she has a husband to fund her little Mary Kay hobby.

      2. BestDecision

        They actually taught us at new director week to run our unit from our retail sales and use our commissions as our paycheck. So, if we paid rent or for a weekly hotel space for unit meetings, we’d have to sell a lot of product on TOP of building our units. Always more, more, more!

  2. Lazy Gardens

    I realize that retailers all run sales and special offers that cut into their profits.

    They start out with a much bigger difference between wholesale and retail pricing. They usually pay 30% of the retail cost, so they can offer 30% off as a loss leader and not really lose.

    Also, they have NOT paid cash in advance for the product, so if they sell it at a discount to move it out before the bills come due they aren’t losing much.

  3. Notateamplayer

    I used all my sales profits to pay off the loan I took out to get the inventory. Profits were nowhere near 50%. By the time I paid for samples, brochures, gas, a sitter and hostess gifts I was lucky to make 25%. When I did my taxes I showed a loss every year! I never put in a star order again. Nearly twenty years later I was asked to put in an order (I do personal use) and I explained there was no money in the budget for me to order months early. “Sell the pink stuff” is what I was told. Where? The market is not there. Most employers have policies against these activities and “warm chatter” never worked. She quickly got off the phone with me. I am grateful foe this site; l know I am not the only one.

    1. MLM Radar

      That is actually a result of the ad customizing software in your browser. That has nothing to do with Tracy.

      For instance, I was looking at the new Bose headsets on the Bose website. So now I keep getting Bose ads on Pink Truth. I was also planning a night out at Midieval Times dinner show, and looking for Pep Boys oil change coupons. So now I also see a lot of ads for those places on Pink Truth and other websites which allow advertising.

      Seeing Mary Kay ads on Pink Truth is actually very funny! It means Mary Kay is an unknowing sponsor for the website that’s taking them down.

  4. ran4fun

    The idea that selling something for twice what you paid for it is profitable, is funny. Many years ago, my toddler was wearing a very cute 3-piece outfit with a retail price of $30.00 at JCP. Someone I knew back then said she worked where those outfits were made. She said with her employee discount she could get the same thing for $3.00. That’s a 1,000% mark up. That is the only way stores can offer 30, 40, 50% off sales and they still make money.

    It would be interesting to know how much MKC marks up their products before selling to consultants. I would bet a $10 wholesale MK item costs Corp. about $1. How else do they pay all those commissions and free trips and prizes (on top of all the “normal” business expenses like buildings, utilities, insurance, salaries, etc.)?

    1. BestDecision

      One of the reasons they get away making so much profit is that they don’t pay much for advertising. Most of the magazines have featured an MK product as an editorial, which is free. So, instead of paying millions for a 30 second commercial to air on TV, they put that into paying the sales force. Not a bad business principle, but they’re still unethical and cheating their people. No raise for Directors in at least 10 years!

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