Making Money From Product Sales

Last month we talked about whether you could make a living selling Mary Kay products. Just selling skin care and cosmetics, not recruiting. If you sold \$1,000 per week every week, you’d be lucky to profit \$14,500 per year after expenses. But who is really even selling that much? Almost no one, because if they were, they’d all be on the Queen’s Court of Sales at Seminar. We know the number of women who get there is very low.

So how much do consultants in the real world sell? Well it’s hard to say, because Mary Kay intentionally does not track actual retail sales to customers. Instead, they track what consultants order from MK, and pretend all of that was sold at full retail price. This means the sales numbers tracked by Mary Kay and sales directors are complete fiction, but we can still use them to get somewhat of an idea of the level of activity of consultants. The “sales” figures you’ll see quoted are therefore the maximum amount a consultant could have sold, assuming she sold every single thing she ordered, and she didn’t give any discounts.

Sales director Caitlin Griffo offers us some insight in her most recent newsletter. Catilin is a Cadillac driver.  If you’re like most people, you think that because the unit is a “Cadillac Unit,” they must be successful. You would be wrong.

Caitlin’s goal for the seminar year is \$650,000 retail ordered. From July through January (7 months), they’ve got \$198,890 in. This is \$99,445 wholesale, or an average of \$14,206 per month. Cadillac production is \$17,000 per month, so they’re not even making their minimum production to keep the Cadillac without a copay.

But what about the ordering by consultants? The newsletter shows the following numbers for July 2017 through January 2018 (7 months):

The consultant who ordered the most did \$15,601 retail. That’s \$2,229 per month, which might sound pretty good. But let’s look further. If she sold everything and if we estimate 30% profit after she pays all her expenses, she could make \$4,680. That’s \$668 per month. That’s certainly not a “living” from selling products.

Just go down the list and think about how little money these “top 10” consultants are making even if they sell everything they have ordered. (And #3 simply ordered a lot of products to finish her car qualification, but we’ll get to that another day. )

So who is making a living selling Mary Kay products? No one in this Cadillac unit!

Check out this article if you’re wondering why it’s almost impossible to make money selling MLM products.

1. BestDecision

We were taught to give recognition at our meetings for \$300 weeks. \$1000 weeks were rare and hyped up because of that. I had unit members use their own personal use items as “sales” on their weekly accomplishment sheets, and it was so sad to see someone so desperate for recognition at the \$300 level doing that.

Tracking wholesale only enables bad behavior, and that’s one of the reasons MK is wrong in my eyes. Just one meeting with NSDs or trip directors would give them the facts of how bad it is IF…and I mean IF…they really cared about their people and wanted to uncover what is really happening. Instead, it’s revenue for them, so why would they?

1. TRACY

If Mary Kay tracked actual retail sales to customers, they run the risk of being discovered as a pyramid scheme and having the proof in their own hands. They know that the vast majority of inventory is sold in initial inventory packages, and that very little of that product is actually sold to third party customers. Without retail sales, the company is a pyramid scheme because people are enticing others to buy products in order to funnel money to the upline. Tracking retail sales (or rather the lack thereof) reveals the entire scam, so Mary Kay will never do that.

2. MINKA

For many of the reasons stated I did resign my position. Best decision. Glad to know that I found a company that is doing it better!

1. Char

Sure hope it’s not another MLM or you didn’t learn a thing.

1. Minka

Network Marketing when done right is a viable business, especially when it creates a generous residual income and it truly provides a product and service that people need. Perhaps it’s just not a business model that works for some. We love the freedom. I thought MK would be that vehicle. I did create a good income (better than most) but it did not give me the passive residual income I was looking for.

1. MK-B-I-L

Minka, would you be willing to share your Schedule Cs to back up a “good income”?

The big lie about passive residual income is that is continues. The truth is that It doesn’t, because you have no rights to future income from customer purchases and downline orders. You own nothing

You have to make your purchases and recruiting quota every month to collect that residual, and you start again from zero each month to get there.

Want further evidence? If the company wanted to toss you aside today because you didn’t make your quota, or demote you, or let your hotshot recruit bypass you (and cut you out of those residuals) all they’d need to do is notify you. They don’t have to buy you out because you have no rights to sell. Once your orders slow down those residuals you’re getting now will dry up overnight and turn into chargebacks. And there is Not. One. Thing. you can do about it.

1. Minka

From your comments I gather you just have not found the right company. So many are misinformed baout MLMs. I understand Direct Sales and Network marketing pretty well. I have owned Brick and Mortar establishments, worked for other companies and been involved in NM… I prefer, in fact love, making a difference in others’ lives with products/services that make a difference for them. Being #othersfocused is the key. Yes charge backs are real, even in retail… almost every business owner has them in some form. When one has to start a business with heavy inventory start-ups they are typically large charge backs (I’ve experienced those too).
P.S. There is a better way!

1. Char

No, you don’t understand MLM very well at all, or you wouldn’t have been duped by MK and now another.

“Generous residual income”, “passive residual income”, “I eat my overhead”, “I’m a business owner” – ROTFL Tell me another one. LOL

1. Minka

1. TRACY

Yes, it IS sad that people like you push MLM as a legitimate business opportunity when it is anything but. We’re here to educate people on the evils of MLM and why it’s a losing proposition.

Minka, if you could name just one MLM that would pay you for your downline when you “stepped down” I might believe you.

But I’m quite confident you won’t be able to do that, even with the “right” MLM you’re promoting.

Tell you what. Prove me wrong. Get out your contract, turn to the termination clause, and make us a copy. Show us that you’ll be compensated for all the money and time you spent building that downline when you leave. Show us that you really can stop placing orders and recruiting and still collect those residuals (Retire Early!). Show us that you can pass your rights to collect residuals to your kids when you die, or sell your rights to your downline to another consultant.

If such a clause is written in your contract I’ll belueve you. But if that clause isn’t there, you’re just fooling yourself. If that clause isn’t there you don’t own a business. You just own a bunch of overpriced poor quality products, with a lot of restrictions as to where and how you’re allowed to sell them.

1. Marykayisacult

There are a few that allow you to transfer or will your business. Arbonne and modere off the top of my head. Younique allows your to become a llc and do it that way. Mary kay requires customer sales tracking and receipts now. As of the 16th. There are some good network marketing companies out there. My current company is a world of difference. No inventory, my customers just order off my website and the company ships and handles it all for me. I just get an email saying I’ve just been paid such and such for my customers order. 25% No matter how little or big the order was that the customer placed. Goes up to 35% depending on if I sell more (\$125 And up) I don’t do parties or buy catalogs. We are soley digital. My first month I sold \$345 on IG. My second month was \$745. I’m on my third month with the company. So will see how I do this month. These are all people I don’t know. Just people shopping on IG. I have always shopped on IG myself so that is why I decided to use it to market my own business. I’m up to 3000 followers now. Excited to see where it goes. The new companies allow you to sell in salons, kiosks, malls, boutiques too. Ive thought about ordering maybe 5 items and selling them in my friends salon. We”ll see. No weekly meetings or dress requirements. It’s really nice. I think alot of you are burned from long ago. I get it. But things change.

1. TRACY

Can you show me something from the company regarding this tracking of sales you say is now required?

3. Lily in NYC

Selling overpriced crap doesn’t make a difference in anyone’s life except your own (by leading you into debt).

3. Did Pink

Multi-level marketing, otherwise known as network marketing, MLM, party plan, and/or direct selling, is a business in which a sales force sells products and services through word-of-mouth marketing. … Your upline will receive a percentage of your sales

4. Lazy Gardens

“especially when it creates a generous residual income ” ” passive residual income”

TRUE “residual income” means you do absolutely NO MORE WORK and the income keeps coming. No more qualifying, no more recruiting, not more buying product …

Examples of real residual income:
Actor’s payments for commercials every time they air (that “Mikey” kid from the cereal commercials went to college on the residuals from his commercials done when he was a child), and TV shows every time they air.
Author’s royalties from books and music and screenplays, ad payments for page views, licensing fees for photographs and music …

3. Barbie

So I have a thought… I’ve been reading this site for a while, and I have yet to see anyone provide a Schedule C. I would be interested to see what a Schedule C for a “successful” MK director might look like. However, since none of the “successful” directors who pop by here seem willing to provide it, would someone who has stopped lying to themselves be willing to show one (with all personal information scrubbed, of course)? I think it might help someone who’s still telling themselves they’re doing well see the similarities between their own Schedule C and that of someone who acknowledges that they were not successful.

4. Jamming Berry

At the weekly meetings I chose to attend the SD asks: “What is your weekly/monthly goal?” to all the gals there. I always say something like “I’d like to sell \$300 of product” or something along that line because all the others say things like “recruit 3 people” or “do X numbers of career calls etc…”

I think it’s funny… as I sit here in my cush-day-job office, sipping coffee with my Jimmy Johns, basking in the glow of my health/dental/eye insurance and paid leave. Just trying to pay off my MK debt, one eye shadow at a time apparently…

5. Peaches

No matter how you look at MLM, Network Marketing, Party Plan, ect. Someone is always going to get hurt; usually financially and most often emotionally. As long as someone is “over” the recruit, there is a cnance to be bullied, coersed or made to put in names of friends, family or frenemies, financial remuneration or both.

I don’t want to be bullied anymore. Do You?

Just sayin’

6. Emily

“…after she pays all her expenses, she could make \$4,680. That’s \$668 per month. That’s certainly not a “living” from selling products.”

Minimum wage in my state working full-time (and let’s face it, MK is a full-time gig) is \$1360/month. How sad to work so hard for less than minimum wage. My state isn’t even the highest paying state in the U.S.

1. TRACY

She’d likely say she’s only working part time so it’s a zillion dollars an hour. But I don’t care about the hourly rate so much as I care about the simple premise of whether people are making a living from product sales, as it’s always suggested anyone could do (if they wanted to and were willing to work).