Working Hard and Still No Profits

Written by ThinkPinkThinkAgain

The SD who wrote this letter says all the same things my director did for my five years as a consultant, and all the things I parroted and believed. And there is definitely truth to the idea that consultants who do not work do not see earnings. But it is also true that consultants and directors who DO WORK…. who work hard, who sacrifice time and money and emotional bandwidth… those hard workers also profit very little, if at all.

It’s entirely possible for a consultant to earn money selling Mary Kay, even if she doesn’t recruit many people. But it’s unlikely the majority, or even a significant fraction, of that money will EVER make its way out of her “business” and back into her personal life.

For example, I worked my butt off earning money to pay the balance on my wedding ring (and my husband’s) a few years ago. It took a lot of time, and also so many discounts, to tempt my clients to buy right when I needed them to (which discouraged them from buying at full price in the future, and of course made it necessary for me to work harder and contact MORE people since I was selling below suggested retail). In retrospect I also wonder how many Facebook friends stopped following me as a result of my constant updates about this project. So, did I earn the money for the rings? Yes. I was so proud! Mary Kay was working!

But… I also went to Seminar that year, and I paid for my plane tickets from my PERSONAL bank account. There just wasn’t enough money in my MK account, you see, because I’d just paid for PCP and bought lots of foundations to replace newly expired ones in my inventory. While in Dallas, I stopped at the vendor booths and bought supplies with my PERSONAL money. A few months later, I had to settle up with my postage supplier and pay about $100 toward postage costs (why I ever started offering free shipping to my customers is beyond me). Did that money come from my MK checking account? No, I had to borrow it from my husband (and couldn’t pay it back until I got a bonus from my real job months and months later).

Poor money management? No effort put into my business? Maybe I didn’t need those supplies, even though every MK order is supposed to be nicely wrapped. Maybe I didn’t need to go to Seminar (sacrilege!). Maybe I should have stopped offering free shipping for orders $50+ (it used to be $25 but I couldn’t sustain it). Maybe if I’d just held “one extra skincare class on top of what I was already doing” every week for the year prior, I could have had “enough money to pay for Seminar and then some.”

Never mind that I was already spending two nights a week away from my new husband. Never mind that I was shoving profit from reorders back into more inventory because brand new products had just come out, and I couldn’t NOT buy them.

I did my taxes one spring and WOKE UP. For some reason, looking at the numbers with my new husband was different from looking at them with my dad. I saw, more clearly than ever before, how little income my business was generating after expenses. “It really IS a hobby,” I thought to myself, horrified. “I didn’t make any money at all last year–in fact, I lost money!” Why was I giving up 5-10 hours after work and on weekends for a “business” that didn’t provide what it said it would–money toward my life? Our lives? Our home?

The Mary Kay line is that I wasn’t working enough.

My response, five years in? I’ve already worked too much.

8 Comments

  1. enorth

    Once you’ve trained your few customers to always expect discounts, freebies and free shipping, it’s over.

    How often does MK Corp offer discounts, free shipping, and free products to ITS customers?

        1. NayMKWay

          I remember when the local newspaper (remember those?) carried an ad for a major chain department store: “50% off all mattresses this week!!!”

          Every. Single. Week.

          Talk about nobody ever paying full price…

  2. NayMKWay

    The blame-the-victim form letters blithely dodge the simple fact that 50% margin, though generous by MLM standards, is nowhere near enough for something like make-up. Make-up is a) perishable, and b) subject to changing whims of fashion. 50% margin (which rarely happens; no one wants to pay full price) is just about break-even.

    “For every dollar you sell, you keep half!” is a bald-faced lie. You rarely get the full dollar, and what’s left gets whittled down to nothing by all the expenses. The deck is quite heavily stacked against those at the bottom, and the vast majority lose money or make much less than minimum wage.

    Those who manage to climb up a level or two aren’t doing well, either. They’ve likely recruited their own customers and are now competing with them. The paltry cut they get from their recruits’ orders doesn’t make up (sorry) for the lost sales. No, what they need to do is to climb higher still. But what of the climbed-upon?

    The late Dr. Jon Taylor crunched the MLM numbers and concluded members had to be about 5 levels up and have 100 or more below them to make money. For every winner, there are 100 losers, and every victim who wises up and drops out will be told it was all their fault for not “working their business.”

    What a despicable industry.

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  3. pinkpeace

    Another thing about MK is that any sales income is completely inconsistent, no matter what amount of effort you put in. There is simply no way to budget any regular, reliable income because you can’t guarantee bookings, skin care class attendance or what any individual might spend.

    A regular job, on the other hand, provides steady income that you can count on week to week that will let you plan for expenses.

    It’s truly crazy-making to work your heart out doing all the approved Mary Kay activities and not know if you’ll ever get paid at the end of the day.

  4. J

    I rarely offered sales, and I could barely squeeze a profit. And I sold a fair amount and booked lots of classes. But that doesn’t actually matter, does it?

    Nope. While I booked several classes, normally only 1 of 3 held. Hooray that’s what mk says is the norm!!!!💗!!! And then I have 2 to follow up with for the next week, how exciting is that!!?!💄!!!

    So what about that one class that actually held?

    Well, my hostess likely didn’t have a great turnout if she had any guests show at all. Maybe she says “I know I want these things for sure!” and it’s $200 worth 💵!!!! But she wants more time to think. Being a good consultant, I begin my Oregon trail of traveling to various consultants to piece together the order. I trade and then trade again to get the rare, precious pink eye shadow.

    I call a few times to follow up with my hostess. I go ahead and place my normal $225 order, restock on section 2 and make sure I get the latest travel mini gift with purchase that my hostess saw in the look book.

    Let’s say my hostess finally calls me back and orders $300 of product. Can you get excited about that big girl pay!💰!!💰!?! (We know it’s more likely that she’ll trim it down verses adding to it, but let’s play make believe like a consultant.)

    If I gave her a normal hostess discount of 20% (assuming she had two guests who each ordered $30) her total is now $240, and my profit is $90 on her order, plus $30 profit from the rest of the party.

    Wow omg, $120 for 2 hours of work!!?!🎉—not so fast. Subtract $5 for the hostess’ gift with purchase. Plus another $10 for their samples, demo product and non-reusable products like trays and cotton balls, percentage of my outfit/and appearance upkeep. Minus another $14.40 to make it an even reinvestment of 60% back into my business (50% reordering 10% for misc like seminar savings ✈️ 🏨 👄!!! )

    Still!!! Can we get hyped about $90.60 profit for 2 hours of work! 🎊 No, because it wasn’t two hours of work, was it?

    How long did I warm chatter to find this hostess? Let’s be optimistic and say 2hrs, I met her at my kid’s sporting event. How much time did I spend encouraging her to host, to find one more guest to get her discount? Add 1 more hour. How much time did I spend texting her about the products, driving to her house, setting up and breaking down, calling her to get her order, driving to her house to get her payment/deliver and then driving to the bank? Another hour, especially factoring in mileage. And finally how much time did I spend driving to and corresponding with multiple other consultants to trade because my adequate inventory wasn’t sufficient. At least 2 hours.

    So $90.60/8hrs total work=$11.33/hr. But hey!! That’s more than minimum wage in some places!!! Ooooh!!!👠!!!

    Well, barely better than minimum wage, is not the sales pitch I remember. But more importantly, all of this profit is largely dependent on a rarely discussed factor—my ability to buy inventory. Because I almost always had a healthy, 7K retail, inventory of the top sellers, I was able to minimize placing orders every time I had a party—that shipping will kill your profit.

    Also, I didn’t factor in paying off the debt of inventory, whether it’s paying myself back my savings or paying off a credit card. Regardless, 20% of my profit should be going to that. Which quickly drops my profit below minimum wage.

    So yes, maybe you can turn a profit. But you’ll be working far more than 40hrs/week to make that profit cover your bills. And the chances you’re making more than minimum wage is slim.

    And I’m sure you can see, no matter how much toxic positivity 😃!!!! I threw in, it doesn’t change reality.

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