Australia and New Zealand Operations from a Consultant’s Point of View

A consultant in Australia posted this as a comment on the thread about Mary Kay Australia and New Zealand closing. I’m posting it as a separate article to highlight the information.

We had about 4 NSDs but they all became Emeritus within the last 4 or so years (or were Emeritus – guess they are just retired AUS Citizens now!).

I had been in MK and became a director up until 5 or so years ago (and until yesterday a personal use consultant). I was a director right when AUS were on the brink of either growth or what we see now as an absolute collapse. For some years there was a lot of messaging from local Corporate and the NSDs about us needing to lift our game and bring growth, step up etc.

I think there were some very noticeable differences here in AUS in comparison to the US – i.e. no inventory options to purchase from when you commenced and never any expectation to purchase ‘a shop to have in the trunk of your car’ – in my personal experience in any event.

In my time as a Director there were very few new car driving directors either (cars not available below Directorship level) and those who drove cars I assume were making repayments back to the company based on the unit production you would see in applause. They revamped the car program in what I assume to be a way to try and get more visibility on our roads but that didn’t really do much either and the types of cars offered were certainly not eye turning on the roads, definitely nothing like the big pink Cadillac you see in the US – think white or black Honda H-RV (that was the most common) with pink writing and love hearts and well that is no comparison to Arbonne’s Mercedes.

We also used to have a 50% commission on sales (again I think the commission worked differently in AUS) and that in the past two years got reduced to 40 or 45% from memory in what was obviously an effort to keep them in AUS/NZ.

I have been watching from the sidelines for some years now wondering what would happen – the latest applause received in my physical mailbox today (of which included the new catalogue) showed that the 10th highest unit production in AUS for January was $12,697 AUD that is the lowest I have ever seen for a ‘top 10’ unit (I know January is ordinarily quiet and we had the awful bushfires but those figures still seemed shockingly low).

The decision to close here has absolutely blindsided all consultants and directors – no messaging whatsoever that it was imminent and the local corporate staff as I understand had no warning either. I had understood a directors webinar was held at 11am to inform them with us general consultants notified at 12.41pm via email with the subject ‘Announcement’ of which included a phone number to query how to return products and just like that everything was gone.

A sign of the times here in AUS – we have various Australian retailers going under at the moment too. An increasing cost of living, little wage growth and a largely casual workforce who don’t get consistent hours means that expendable money is limited – many people are shopping online to find the best deal/cheapest prices possible.

18 Comments

    1. Phoebe's Mom

      No, they shouldn’t have. MK doing this to their entire sales force in Australia and New Zealand is reprehensible. An ethical company would have given them some notice, help in getting everything sorted out and would haven bent over backwards to help them return their inventory. Instead, they have locked them out of their accounts to ensure they won’t be able to return product for the 100% they promised. I truly hope there is some way for these people to get their money back.

      MK is scum.

          1. Char

            I am sad for the people who ‘thought’ they were the sales force. The reality is, and consultants should’ve known this had they bothered researching the pink TRUTH, they were simply the buying force aka big spending customers.

            With that in mind, it’s not uncommon for stores/companies in trouble to just close up without advanced warning. And no one should expect that store to be concerned about the people who re-buy the product from consultomers – like a garage sale transaction. The company has already made the sale. It’s not their responsibility what you do with the product after that.

            Mary Kay’s actions only proves my point about consultants being customers.

    2. roo2

      agreed. How disgusting. Further shows how being an actual employee offers better safe guards against things like this too. A multi-billion dollar could not lay off its work force like that with no severance. But under the MLM guise of self-employed there is no safeguard.

  1. Jen with one N

    There is so many things wrong with this consultant’s statement. Marykay sells you the product and then you sell it at a suggested retail price. So how does she come up with,

    We also used to have a 50% commission on sales (again I think the commission worked differently in AUS) and that in the past two years got reduced to 40 or 45% from memory in what was obviously an effort to keep them in AUS/NZ.
    ?
    The whole comment is contradictory. When you have a pre existing bias, you should scrutinize comments like this before dedicating a post to comments like this. I mean this in the nicest way possible.

    Read the comment a couple times and you will see. I’m off to shop for good makeup at Sephora and Ulta.

    1. Phoebe's Mom

      To me, it sounds like MK raised the prices on products the consultants would buy and kept the suggested retail the same. That lowered the commission the consultants would get if they sold at the suggested retail price.

    2. BeautyGirl

      Jen with One N – so yes Australia & NZ Representatives USE to get 50% commission on our products they dropped it to 40% in the last year so they could reward us with team building bonuses instead – as we were not getting the star consultant prizes like the USA had we did have the ladder of success but only a small gift card as a reward no amazing prizes like I see.

    3. TRACY

      Yes, Jen, the comment makes sense. The suggested retail pricing was such that previously consultants made 50% gross profit on the products if they sold them at full retail prices. Then Mary Kay increased the wholesale prices consultants had to pay, so if they sold at full retail price, they would only make 40% gross profit.

    4. Mountaineer95

      “There is so many things wrong…”

      There is ONE thing wrong with this phrase of yours. Sorry, but such blatantly poor grammar causes me to not give any weight to the points that follow.

  2. J

    Pair that with most customers holding out for a 30% off sale, and you’re really eating all your profits after gas, meeting fees, section 2 supplies, samples.

    Geesh. That’s horrid. I remember always being told the 50% profit margin was ‘the highest in the industry and what set mk apart from other companies.’ One of the ways they showed they ‘cared.’

    I’m sure a cleanser costs them a nickel to make, and they have consultants drooling over 50%.

    1. BeautyGirl

      A 30% off sale? We never had that in Australia – we would have bonus gifts with purchase but there was never a sale like the USA had. We also didn’t have that bundle package option on the placemats like I see others talking about. Australia was VERY different from how the USA run hence why it wasn’t viable.

  3. BeautyGirl

    No you are incorrect no prices were increased they just simply reduced the commission from 50% down to 40% so we could receive a team building bonus which we previously weren’t receiving

    1. BeautyGirl

      the printed a new commission table which was sent to all of us and said this is changing.
      Approx / from memory it went – Orders up to $200 – 0
      $250 – $749 – 20%
      $750 – $999 – 30%
      $1000+ = 40%
      (this is every month nothing rolls over to the next so if your going to order, make sure your in one of those brackets,). There’s no bundle packs to buy when you first join and no bonuses of products – we aren’t entitled to a Mary Kay Credit Card like I see in the USA.

      Our TOP order amount to receive the 50% off WAS $1300 – but they reduced it to $1000. A sales court here was $35k … reduced down from $40k last year.

      In the USA you are entitled to ‘star prizes’ we use to get a $20 – $100 gift card once a quarter. Depending on your level, sapphire , ruby, emerald, pearl, diamond,
      Then they changed it to be a cash reward Starting at $500 for sapphire , which increased each level.

      Avon use to be 35% for orders over $900, Tuppeware was 36% IF you were a manager otherwise it was approx 20 – 22%. So at the time MK was the highest at 50% , once they dropped to 40% they were still technically the highest for all over rewards.

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