We’ve all heard Mary Kay ladies say they’ve “won” a free car from the company. That’s not true. They get to drive a car that Mary Kay leases, but only if their team/unit keeps ordering lots of products. There is a lots of ordering of products that goes into getting a Pink Cadillac, and no one knows that better than sales director Chelsea Claytor.
She “finished” Cadillac in June, but things haven’t gone well since. In other words, she didn’t meet the minimum Cadillac production in July, August, or September, and that’s a problem. More on that later.
How do you “win” the pink Cadillac?
A sales director needs $102,000 of wholesale orders ($204,000 retail) within a period of 6 months. That averages out to $17,000 wholesale per month (or $34,000 retail per month). If you do that, you either get the Cadillac or you get cash of $900 per month.
BUT… You only get the Cadillac or the cash if you keep up the production. Every quarter your unit has to order $51,000 wholesale (same monthly average of $17,000 wholesale) or you have a “co-pay” for the car (anywhere from $90 to $900 per month) each month for the next quarter. If you’ve chosen the cash compensation option, your monthly cash gets reduced to $279 to $810 per month, depending on how far you’ve fallen short of the minimums.
Chelsea was pushing for Cadillac for a long time. But THIS YEAR was her year. In 2019, she was going to finally finish the Cadillac. She was going to do it between January and June 2019. She “finished,” but let’s take a look at how.
Applause Magazine is very helpful, as it lists the top directors for unit production and commission checks for each division. What was her unit retail production for each month? (Note that the “less than” figures are the production for the last/lowest director listed in Applause in Chelsea’s division, and Chelsea wasn’t on the list, so we know her production was below that.)
- January less than $33,381 retail
- February less than $45,413 retail
- March less than $39,329 retail
- April [no data available]
- May less than $39,130 retail
- June $69,185 retail
It is safe to say that in the first five months of qualification, Chelsea’s unit fell far short of the average retail of $34,000 per month. In the final month, they ordered $69,185 retail, which I suggest was EXACTLY what they needed to hit the total of $204,000 retail for the 6 month period. That means in the first five months, they ordered $134,815 retail, or an average of $26,963 retail per month ($13,481 wholesale per month).
The bottom line is that Chelsea’s unit was never supporting Cadillac production, and pushing to “finish” doesn’t change that. $13,481 wholesale is only 80% of what is needed each month. That’s a big deficit when you’re thinking about sustaining the Cadillac in the long-term.
Chelsea finished Cadillac by doing a massive sale to her own customer base. She gave huge discounts which hurt her a couple of ways. First, she made little to no profit on the sales she was doing. Second, all of her customers ordered products before they needed them to take advantage of the sale, which means in the coming months they’re not going to be ordering. She made sales now that gave her no profit, and her sales in the coming months will be very low. (And odds are that Chelsea placed an order in June for products she didn’t need just to finish off the production she needed. Hello credit card bill!)
Her production numbers in the months following June have shown that the unit continues to not support the Cadillac.
- July less than $26,788 retail
- August less than $33,246 retail
- September less than $37,195 retail
Remember, the unit needs an average of $34,000 retail per month to keep the Cadillac.
In the case of Chelsea, she took the cash compensation and leased herself a pink Cadillac, since her driving record disqualified her from taking the Cadillac directly from Mary Kay. If you use the historical production of the unit, Chelsea is likely getting $630 per month of cash compensation now, rather than the $900 per month that she was expecting.
And the big commission checks? Poof. Gone. Chelsea’s commission check for June was $13,897. That was probably eaten up by the order(s) she placed for unneeded products. In the months since, her commission checks are likely in the $2,500 range. It might be even worse than that, as Chelsea was lamenting on Instagram about the slump she was in after June.
You have to wonder how much she’s paying each month for that lease and how dire her overall financial situation is. The pink Cadillac looks like success, but the reality (for most) is far, far different.