No 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 when you do discounts and promotions, you can eat into any potential profits mightily. Let’s face it, with all the MK ladies out there, it’s hard to sell the products at full retail. So the question becomes whether you’d rather sell nothing or whether you’d rather give discounts and incentives. Here’s one such promotion:

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. There are women having going out of business sales and there is Amazon and eBay. Any Mary Kay customer who pays full price is a fool. But the consultants pay the price, and they will never see a 50% profit.

10 Comments

  1. Lazy Gardens

    Because your expenses do NOT decrease just because you sold at a discount: “when you do discounts and promotions, you can eat into any potential profits mightily.” And it’s not profit until the expenses are paid.

    “I realize that retailers all run sales and special offers that cut into their profits.” Retailers have a larger markup. Instead of Mary Kay’s twice wholesale, they have a starting markup of 3 to 4 times their wholesale cost, so they can actually clear the shelves with a 50% off sale and still make a bit..

    1. raisinberry

      ^This^. Nobody in my retail world of design starts with a markup that gets peeled back in various ways before a customer has actually decided whats she’s buying! So get this…mary Kay Corp gets 100% of wholesale, but consultants rarely get 100% markup because MK teaches discount bundling on placemats! Dog gone it…NOTHING MK teaches is actually true for the entry level IBC.

  2. Char

    Bonafide Retailers have the ultimate goal to sell you product. Their goal is not to recruit you as a competitor right next door. Retailers and MLM are incomparable.

    So, what is the ultimate goal behind making those MLM “customer” contacts? Recruiting of course! This article exposes the inherent flaw in MLM showing retail re-sales are a joke.

    The re-sale of a lipstick, discounted or not, is merely a small consolation in MLM. You do not advance without recruiting. Why? Any profit you might make re-selling doesn’t benefit MKC – an MLM and the real Retailer.

    What a consultomer re-sells at her girlfriend neighborhood daycare yard sale matters not to Mary Kay. However, recruit that girlfriend to buy a garage full directly from MK, and now we’re talking. MKC has made a big sale.

    I can not reiterate enough that we must get into the mindset of MKC. The consultant “business” conversation is simply part of the ruse. Have that conversation enough, and it seemingly becomes true – which MK wants.

    I get it though. In order to expose it, we must discuss it. It’s just a friendly reminder to always think through the eyes of MKC. Do that, and comprehension of the MK/MLM scam comes easy. It’s a short cut to what can take years of believing and spending to figure out.

    Yes, MLM is a very clever scam camouflaged well. Most of us have all fallen for it at one point or another. And that’s why we are are here warning you not to make the same mistake.

  3. Not a Bot

    If the consultant can’t get people to pay full price and has to offer discounts, how do they expect a customer to round up 8 or 10 others to order at the inflated full price so they get something for free or reduced price? I wouldn’t want to over pay for something so somebody else can get something for free. Consultant seem to use the idea of friends and family wanting to help (overpay for products) to get sales and sign ups. Real businesses don’t do that.

  4. MLM Radar

    Every time a Director tells her unhappy recruits to hold a “going out of business sale” she makes it harder for her new recruits to sell at “full retail” price.

    Your Director doesn’t care about your ability to sell at “full retail” price. What she really cares about is avoiding a commission chargeback.

    She will TELL you that she has your best interests in mind, but whenever your best interests (sell at full price/return inventory) conflict with hers (dodging chargebacks) she’ll always look out for herself first.

    Also, remember that your Director loses NOTHING when someone returns inventory. She has to pay back commission she received but didn’t yet earn, yes. But she pays no penalty. She merely breaks even.

    The person who pays the penalty is the consultant. When she doesn’t return inventory she takes a 100% loss on everything she can’t sell. When she does return inventory she takes a 10% loss plus pays all shipping charges (but that’s still a lot better than a 100% loss).

  5. Boiler Mama

    I struggled with this as a consultant. Being told to run a sale or give a discount. Give free product out. It cut into any small profit I may have possibly gained and made it even harder to turn any profit. Between the expectation for sales and hostess rewards and those minimum order requirements, I don’t think I ever made money. Only lost it. Only saddness on the MLM train

    1. raisinberry

      Boiler Mama….it’s true what you’ve said. It’s all kinds of loses. Against all kinds of hope…cause we believed it was a way to make it, and we hoped for the best. Only to end up so disappointed with the internal workings and who we were becoming, to “be successful”: A hated mlm ulterior motive happy face to draw all friends and family into our PMA cult.

    2. Lazy Gardens

      Your director’s commission was paid based on what you PAID for the product, not what you sold it for, so.”Being told to run a sale or give a discount. Give free product out.” did not affect her commissions at all. She was being generous with YOUR money.

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