The concept of “retail sales” should be so easy to define. And yet, in Mary Kay it is one of the biggest lies that is repeatedly told at all levels. You would think that a “retail sale” would be a customer selling a product to someone who is not in Mary Kay.
You would be wrong.
In Mary Kay, the retail sales they talk about are the orders consultants place with the company, times 2 (to get to suggested retail) plus various “contest credit” (thing like double credit, where they count every consultant order twice). There is no consideration that orders by consultants do not come close to equaling sales to customers, nor that most sales are made at discounted prices rather than full suggested retail.
The practice of frontloading is getting new consultants/distributors to order inventory packages. These products have not been sold and are unlikely to be sold. The first order a consultant makes is very likely to be the most she will ever order from Mary Kay. For this reason, it’s important to twist her arm and get that order to be as large as possible. Statistics say her future orders will be much smaller, and she’ll drop out before she can even sell the products in the original inventory order.
So when a national sales director like Kristin Sharpe brags about having over $1 million in retail sales, it’s a lie, and she knows it. More accurately, the consultants in her unit spent $400,000 on products that they can’t and won’t sell. If they do sell them, they will be heavily discounted and the profits will be small. And yet they brag about this fake retail number because it sounds great and it’s a recruiting talking point. “If my unit could sell $1 million last year, imagine how much YOU can sell!!?!?!”