Written by Queen of Section 2
I learned a lot of lessons while in Mary Kay. It’s easy to listen to your upline. You think they have your best interest at heart. But they truth is that they have THEIR best interest at heart. Mary Kay makes it easy to plunk down thousands of dollars for skin care and makeup. They tell you if it doesn’t work out they’ll give you 90% of your money back. It’s almost risk free. What other company will give you almost all of your money back?
And yet this decision goes bad for so many, and we’re left scratching our heads wondering why. It’s your business, and yet Mary Kay tells you so much about what you can and can’t do. You can’t advertise like this. You can’t sell here. You’re not REALLY an entrepreneur. They have complete control over how you sell, where you sell and the manner in which you sell your product. Just read the Agreement (again) and you’ll see that I’m telling you the truth.
So, from the very beginning you discover how severely you are restricted in your efforts to capitalize on the Mary Kay opportunity. You can also begin to understand how much slower it will be for you to recoup your investment on your inventory and supply purchases before you even get to see a profit. Not only that, but because there are no territories in Mary Kay, you have no idea how saturated your geographical area is with not just the competition (Wal-Mart, Target, drug stores, etc.,) but with other beauty consultants selling the exact same inventory you have! Yes, a franchise has their rules and restrictions too; however, they never set up a licensee to fail in an already saturated market. And of course everyone can get anything from anywhere online, and it will be to them in a day or two, so that never helps.
There are few sure things in this business. I happen to know of at least one “sure thing”. If you permit me the time to explain it to you, I will not guarantee that you will be any richer for it but I may help to ensure that you will not be any poorer for it, either.
Other than business cards, the Starter Kit is the one and only investment you need to make in order to get started and work your Mary Kay business. In it you will have more than sufficient product to hold enough skin care classes and facials for you to qualify for your 50% discount and to meet your customer’s immediate needs. All your training information, product information, mirrors, sales slips, product request form, etc., etc., etc., is included to get you started. There Section 2 supplies, too, so make-up samples are also included in the Kit. You even get a tote to carry it all in.
It is true! With the Starter Kit, you can easily recoup your $100 investment and earn your first quarterly $225 wholesale ($450 retail) qualification for your 50% discount, selling to your friends and family in your first month. Maybe, if you’re lucky, once you’ve paid for your gas and packaging and hostess gifts, you might actually make $50 at the end of your first month.
I know of a few other ‘sure things’, such as what to watch out for in order to protect your financial health and stability while working your business. If you’re interested in knowing about them too, read on.
Inventory: I would like to dispel the inventory myth. You don’t need one. Mary Kay has warehouses of fresh inventory stored in optimum conditions that will get to you in a couple of days (or direct to you customers in a couple of days with MK’s customer delivery service). Aside from the fact that the products have a shelf life, Mary Kay discontinues product, introduces new product and changes product packaging every season.
So I say, what’s the point of storing “volatile product” or incurring credit card debt, when the fact of the matter is, you have 100% access to fresh, on-trend product 24/7 at the click of a button and! money in your bank account working for you and earning you interest until you make a sale. The saying that “inventory is money in the bank” is a load of malarkey. Cash in the bank is what cash is. Running to the ATM machine is much faster and lucrative than running out to try and sell a cleanser or bartering for a loaf of bread with lipstick samples.
The truth is, your director needs recruits purchasing a minimum of $600 worth of start-up inventories, or existing team members putting in orders of $600, every month, to stay on target for cars, trips, etc. So you see, it’s not about what’s good for your business; it’s about what’s good for your up-line. Plain and simple, your continuous monetary investment in product pays for their lifestyle.
Recruiting: Never recruit. Hands down, recruiting is probably the biggest money-losing proposition for the lower echelon in Mary Kay, ever. Here’s why: You earn 50% by selling product to your customer. If you recruit her, you earn 4% instead. Ah, but what if she’s a firecracker and sells a boatload, you say? The commission you earn on your recruit’s inventory purchases is not rightfully yours for one full year. Remember, that 90% buy-back guarantee doesn’t just apply to you; it applies to your team as well. If your recruit elects to purchase a large inventory, and even if she legitimately sold product in the months leading up to her resignation, it doesn’t matter. Mary Kay ties the commission you earned on her purchases to her outstanding inventory she wants to return. So you have to pay it all back.
My advice to you is to keep it simple. Stay off the hamster wheel. Keep the 46% commission you would otherwise forfeit in order to recruit, for yourself. Understand that the commission you earn from a customer is immediate cash in your pocket to do with as you please. But if you recruit, not only are you opening a Pandora’s box of unforeseen expenses, such as management attire and motivational prizes, and so on and so forth, the amount of time, effort, money and training you put into a team 1) keeps you from selling and 2) makes you vulnerable to lost revenue if she decides to leave.
Lastly, and not obviously, this is one of the reasons why large inventory “pulls” also known as frontloading, are made. Hey, somebody has to make up for lack of production somehow.
Discounting: If you’re going to sell the product, then don’t give a discount. That discount is your commission flying out the window. You paid 100% wholesale for your product, you prepaid the tax at 100% retail and you get to absorb all of the shipping costs. You still have to pay for your gas and packaging. You are not a supply channel/distributor for Mary Kay. This is supposed to be a money-making venture for you. Mary Kay is not taking a hit on discounted product and neither should you. Yeah, right. Tell that to your mother and best friend.
Ordering: Don’t order at the end of the month. Only order at the beginning of the month. This advice doesn’t benefit anybody but you. Meaning, your director’s quotas are due at the end of the month. That’s when she will insist you order. My advice is to ignore her and here’s why:
The three month 50% discount is not a rolling time-line. For example, if you order May 29th, your 50% discount doesn’t run until August 29th. May actually counts as a full month. So in effect your 50% discount will run out July 31st. Why forego a month’s worth of discount that would benefit you in order to pay for her car, which will never be available for you to drive?
Inventory – Part II: If you insist on maintaining a small inventory, never let anyone else choose it for you. Never. You are responsible for your orders. Mary Kay will not exchange items or let your return your product unless you are exercising you 90% buy-back guarantee.
Never order product when it’s on sale. Usually that means it’s about to be discontinued. If it’s discontinued then it will not be in The Look Book for your customers to see and you will probably end up having to sell it for cost or worse, less.
You absolutely do not have to reinvest 40% or 60% back into your inventory. If you want to keep a few moisturizes on hand or a couple of cleansers, or invest in some foundation and a mascara and disposable mascara wands for skin care classes or facials, that’s not a bad decision. But carrying too much inventory on your shelf leaves you susceptible to volatility and uncertain market conditions. The more you have to unload when you’re advised of changes (normally three months in advance) the harder it will be for you to recoup your investment.
Don’t buy any color products. Carry some samples in the most popular colors and leave it at that. They’re relatively inexpensive, and you can order whatever color products your customers want. This is much better than being stuck with full-size color products you never sell.
Training and Time Management: There are two things you need to know about the Monday night rah-rah sessions. First, any meeting (or event) you attend will cost you money. They call it a room fee. So contrary to what they say upfront, your training is not free.
Secondly, the purpose of any event is to recruit. That’s why you are encouraged to “bring a face”. Be forewarned that if you decide not to recruit, and you bring someone along, a sister consultant may attempt to recruit your friend for themselves under the guise, “Who are you to decide that she doesn’t need Mary Kay?” So my advice is, leave your customer or friend at home. If you’re not learning anything more than the scripts which are included in your training documentation in your starter kit, then either stay home or have an appointment booked. In other words keep your money to yourself.
Skip career conferences, seminars, fall retreats, make over ‘n muffin events and any other excuse to get you out and submerged into the fold. The costs associated with attending these events slash your earnings severely and you don’t take anything away from them that you couldn’t get from a Monday night meeting or your starter kit. Be the (richer) party pooper and spend your money on you and/or your family, instead.
Skip the Preferred Customer Program: The return on investment is little. It’s more lucrative to go to the dollar store and purchase some cute gift with purchase items from there and offer them to your customers in a promotional email, instead.
What’s important to remember is this is YOUR business. Any decision to spend money negatively impacts your bottom line, nobody else’s. Contrary to what anybody says, the products do not fly off of the shelf. Once you exhaust your soft market (friends and family) you must go out and peddle your wares to the general public. Here’s a clue: They don’t love you and they are not obligated in any way to be supportive of your endeavor. If you don’t have anything to lose, you can simply walk away. Having a few thousand dollars sitting and rotting on your shelf makes the situation more desperate.
So in the long run, the truth of the matter is, 90% buy-back guarantee or not, the only way to make a meager living at this opportunity is to make the least amount of investment possible. That means invest in your business cards, the Kit and some peripheral supplies. That way if life happens and you need to step back for a while or a few years, your investment isn’t perishing uncontrollably before your eyes.
Of course, you could just get yourself a predictable part-time job, with a dependable wage that pays for medical and dental benefits, instead.