No Executive Income, Even with $10,000 Unit Production

mary-kay-executive-incomeWritten by PinkPeace

Who still thinks that directorship is the way to real money in Mary Kay? There are lots of beauty consultants who think that if they just can make it to the “elite 2% of all those in Mary Kay” they will have their ticket to financial freedom and flexibility.

I’m going to show you how a unit with production of $10,000 in a given month STILL isn’t much of a wage in Mary Kay. The vast majority of sales directors do not have production of $10K in a given month. They DREAM of $10K production, but they are probably going between $4,500 (the bare minimum to keep their units) to $9,500 (the bare minimum to have the sales director car without copays). Let me stress again, production of $10,000 in a month is very unusual in Mary Kay.

In the very best case scenario, all of the consultants ordering to make up the $10K are the director’s personal recruits. We know that this never happens, but I’m showing the most she could possibly get. The director makes 26% on her personal recruits, so the base commission check she’ll receive is $2,600. In addition, she gets a $1,000 bonus for hitting the $10K production mark. So at the very maximum, she will get a commission check of $3,600 for the month. That’s it.

Let’s suppose that she makes $10K in production every month for 12 months. (We can also suppose that I can look out my window and see pigs in the air, flapping their wings, but humor me here).

$3,600 x 12 months = $43,200

Is that an executive income to you? Not to me, it isn’t.

But wait, there’s more. Let’s talk about all the expenses.Let me run down only a few of them, and again, I will estimate on the low side to give this poor sales director a fighting chance:

  • Meeting space rental – $1200 (I know fellow directors reading this – you WISH it were only $1200 for the year!)
  • Seminar/Leadership/Career Conference fees, travel and expenses – $2,500
  • Director suit – $375
  • Unit prizes and promotions – $500
  • Training materials/flyers, etc. – $200

There are more expenses, but I’m going to stop here, because it just makes me sad and tired.

Those add up to $4,775. And we’re not even counting the gas to drive all over town, the fees to attended NSD events, office supplies, and all the little things.

The director has $38,425, but has to pay taxes on that. Sure, the income taxes are no different than if you have a job. But the self-employment taxes take a bigger chunk than if you were an employee. Let’s estimate that she’ll pay about 35% in taxes (20% income taxes, 15% self-employment taxes). She’s left with just under $25,000.

That’s about $2,000 per month available to spend on mortgage/rent, utilities, groceries, school bills or other things for her kids, insurance (oh, did I mention insurance? Mary Kay does not provide ANY health insurance whatsoever, so good luck with that if you get sick).

Simply said, a unit with $10,000 in production will not even give a sales director enough to cover the basics, even in the very best case.

Let me assure you that it is extremely difficult to maintain $10K in production month after month. Some directors hit it once, and it’s the highlight of their careers. Any one or all of these factors will apply:

  • The director put her own order in to hit the $10K, in order to get the extra bonus. She will add that product to the other unopened boxes in her basement.
  • The director will not put money aside for taxes, because she can’t pay her monthly bills as it is. When the tax bill comes due the next year, she will pay for it on a credit card.
  • Speaking of credit cards, she will have several open, because she has no option regarding attending Seminar, Leadership or Career Conference. Those events will be responsible for a great deal of debt over time. Airfare, staying in top hotels (we have to paint the picture of prosperity for our consultants, don’t we?), NSD events, meals, etc. cost a LOT. And a director cannot afford to “look poor” in front of her consultants and other directors.

The amount of time and mental energy it takes for a director to have $10,000 in production in a given month is huge. It’s a LOT warm chattering, recruiting, new consultant inventory talk/orientation, business debuts, meetings, e-mails, etc. It’s exhausting and numbing after awhile. And for what? For barely more than minimum wage.

I could go on and on, and I hope others on Pink Truth will add their experiences to this thread.

11 Comments

  1. Char

    All excellent information in this article. My follow up food for thought question is:

    Even IF she gets to making 2,000 a month, what must she to do achieve this? Lie? Lie telling others they can achieve an excecutive income with 10k production? See the vicious cycle of lies and how it works?

    You must lie about the amount you can make in order to make an amount less than the lie itself.

    Are you a Mary Kay liar? How do you know your upline isn’t lying to you? Don’t you think you should investigate since you’re spending so much time and money in Mary Kay? Does the article actually make sense? Does the person writing this article make money off of you? Who has more motive to lie? Upline profiting off you, or the author and this website sharing this info for free?

    But don’t just stop here, research the MLM scam. MLM? Two more questions: Do you have an upline, and can you endlessly recruit others into your downline? Yes, it’s MLM! Duh!

  2. Lazy Gardens

    $3600 a month … If you were only working a 40 hour week, that’s $22 an hour BEFORE you pay your SSI tax, expenses, etc.

    That’s enough to send me running to a local J O B counselor.

    Because you will be working 60+ hours a week and that’s getting into minimum wage income.

    1. MLM Radar

      Social security and Medicare taxes are split between employer and employee. Your employer pays 7.65% and you pay 7.65%.

      When you’re self employed you pay the entire 15.3% yourself. That’s in addition to federal and state income taxes.

      But MK doesn’t tell you that part. If MK says anything about taxes at all, they talk about what a good tax “shelter” your MK business will be.

      Unfortunately, that’s also a lie. You only reduce your regular income tax bill if you LOSE money doing Mary Kay… lots of money.

      And then you only reduce your tax bill a little bit. If you’re in the 15% tax bracket you cut your tax bill by $15 for every $100 you lose. The other $85 is gone forever… straight into Mary Kay Corporate’s pocket.

      It’s just one more hidden cost they avoid mentioning. If they told the truth you might not sign up.

  3. Former Director

    These numbers are truth that directors/former directors can really grasp. I hustled for 60-70 hrs a week with a premier level car, my eye on building a national area and I was paying a business coach hundreds a month to tell me to keep going up the pyramid. Because I didn’t crunch basic, elementary Profit & Loss numbers like you did above, I racked up $20k in debt. I lived like I made $80k a year on less than $25k annual salary… in order to sell the dream to recruits… so that I could pay down my debt with commission checks from their wholesale orders. Even without the debt, $20-something thousand a year for 60+ hours of work a week is not okay. The short-term struggle on this salary for long-term gain (NSD salary) propaganda is appealing… if you’re willing to do this to hundreds of other women who won’t make it to as far up the pyramid as you. FTC has not classified this multilevel marketing company as a pyramid scheme yet. Corporate leaders of MARY KAY make millions off consultant and director wholesale orders… orders placed by women sold on a dream or women who are frantic and fear missing a huge goal… a goal (and reward system) created and designed by MARY KAY to drive up wholesale orders from directors and their consultants. Estimate the numbers for what it costs the company to produce the product and bottle it, versus what directors and consultants pay the company to purchase it… and the executive salary goes to the owner and his leaders. They’re smart enough to keep everyone in the sales force (especially new recruits) happy, eager and fearful enough to purchase product from them (wholesale orders) and to drive and influence others (their recruits) to buy product from the company too.

    1. Char

      Thanks for sharing. Going to make a point not directed at you.

      But are they really “wholesale” orders?

      If most of the people using/buying MK product are paying that “wholesale” price, I contend that it’s actually retail. Just because MKC dubs it wholesale doesn’t make it true – it just sounds better and more enticing for the mark aka the consultant.

      If the consultant is able to “resell” product to some idiot or her grandma, willing to pay “double retail”, I guess that’s something to be proud of – NOT!

      Frankly, if I really wanted to use the pyramid scheme product, I’d insist on paying the consultant’s “wholesale” price. I’m sure they need the orders. If they refuse, say you’ll find someone who will, or eBay. Do we think a consultant will turn away an option to help “make production”?

      Save yourself some money folks, as you don’t need to ever pay “double retail”. Btw, this is just one of the inherent flaws with MLM and it not being a “product sales business” for the consultant.

  4. enorth

    “If I really wanted to use the pyramid scheme product, I’d insist on paying the consultant’s ‘wholesale’ price.”

    That’s when they say, “Just sign up as a consultant. You’ll pay wholesale prices for the rest of your life!”

    1. Char

      Yep. So much for the touted “retail customers” that will make you 50% markup. Can I repeat myself just ‘cause? Inherent flaw! Inherent flaw, inherent flaw……….inherent flaw alert!

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