Facts, opinions, and the real story behind Mary Kay Cosmetics.
 

Directors Selling to Consultants in Other Units

Mary Kay sales directors are upset because consultants in their units are buying products at wholesale from other directors. Oops. Big no-no. So these directors who are selling are able to place product orders that get production for them (which means commission checks and credit toward cars). And the consultants benefit because they can get the products they need without having to place a full order with Mary Kay.

If a large number of consultants and directors are choosing to do this (which goes completely against the MK rules), does that mean there is something wrong with your “business” model?

21 Comments

  1. Popinki

    Rational egotism (“if something is beneficial to me, it’s good”) turns on itself. The directors and above are happy to take money earned for them by their underlings and that’s good (for the directors) and everything is just hunky-dory. Yet when that same underling finds a cheat code to benefit themselves they’re suddenly unethical cheats.

    In other words, the wasps have figured out how to sting scorpions without getting stung themselves because MKorporate doesn’t care as long as SOMEbody is buying product.

    I give it two thumbs up and a resounding “HA-HA!!”

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  2. lulutoo

    Gosh, Mary Kay must be crying in heaven over people breaking a ‘golden rule’ in her ethically run, God first-family second-MaryKay third company. LOL! Live by the broken cosmetic bottle, die by the broken cosmetic bottle, leaders!

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  3. Pinkiu

    Aren’t these the same people who will recruit another consultant’s customer’s if the consultant doesn’t share the recruiting plan? They rationalize that the customer is potentially losing out on an opportunity if the consultant doesn’t at least TRY to recruit her. I know we’ve got articles here somewhere about that very thing that SDs are encouraged to do.

    1. Mountaineer95

      Yes! Basically, if you’re not “sharing the opportunity” with your customers (because recruiting your paying customers means that instead of selling them $100 of product you only paid $50 for), you’ll instead get a measly small percentage of what your former customer (and current recruit) buys at wholesale from MK. Anyone with a basic understanding of sales will understand this and balk at recruiting her own customers; but if she doesn’t try to recruit them, she will find that someone else in MK will try to recruit them, and will be justified by MK logic because hey, you’re not sharing the opportunity.

      1. This! ⬆️ The whole recruiting your customers never made any sense to me. Come join me so I can not earn sales commission on anything you buy, but instead of getting my sales commission I might get a much smaller percentage when you and at least 5 others like you place an order…

        Do the sums…
        5 people ordering £200 (yup, U.K. based here, so max discount is 40% active qualifying order is £200 retail) makes £1,000 in ‘production’ and as a Team Leader you get maximum 12% commission on that, so £120… but to qualify for that 12% you have to place a £500 retail order to receive the commissions. £500 retail = £300 wholesale, so you earn £120 you have to pay £300 to the company first… how on earth does that make sense?

        If those 5 people were your customers and they all ordered £200 retail, then you get to keep 40% of that £1,000…
        That’s £400 in your pocket and it doesn’t cost you £300 for the privilege.

        It’s like they teach at leadership training; it’s a numbers game!
        You have to have more recruits to make it work.
        Its a game of 10% as they say; only 10% of your recruits will do the work in being active every month, so to get 5 people placing an order every month you have to have 50 recruits in your unit.
        In other words you’ll never make anything anywhere near an income unless you’re a SD with at least 50 recruits and even then it’s slim pickings. You can’t make it worth a proper income, unless you have hundreds of recruits in your downline.

  4. Data Junkie

    This is more evidence that Mary Kay’s business plan is optimized for ordering over selling. Just look at these road-blocks to “selling”:
    – Wholesale price is already higher than market retail for products of similar quality, making retail mark-up all but impossible
    – Incentives follow orders, not sales. If you order $1000 of inventory in January, and sell it throughout the year, you can only get commissions from your down-line for orders made through March. After that, no commissions for you!
    – Qualifying minimums have nothing to do with sales. Consultants must order at least $225/quarter to stay “active” and remain eligible for commissions, and to receive product at wholesale. No credit is given in a quarter for actually selling product to customers!

    Just look at the exchanges in OPs post above, and think about a “real” company. In the real world, the inventory moves to customer demand. You don’t force distributors to hold inventory in one market when another market’s demand exceeds supply. That would be wasteful and damaging to the distributors.

    The only reason you would do such a thing is to benefit the supplier at the expense of the distributor. But that is EXACTLY what Mary Kay does. The distributor is the true customer in the Mary Kay universe. No outside sales necessary.

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    1. Frosty Rose

      “In the real world, the inventory moves to customer demand.”

      Let’s take it a step further using your usual logic, DJ. The CONSULTANT is the customer. In the real world, the customer (consultant) is not captive to one retailer (in this case, director). Target doesn’t care if I prefer Walmart’s brand of cotton swabs over theirs. I can go to Target, pick up the things I need from there, and feel no guilt crossing the street in the same errand run to pick up a few things at Walmart. Nobody guilt-trips me about purchasing the products I like from the store I prefer. In this example? Disloyalty is a capital offense, punishable with exile to the Island of Misfit Consultants, where you are dead to your director. Complete with pearl clutching.

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      1. Data Junkie

        Another example would be Home Depot. If one “store” does not have my item in stock, they will happily send me to another store, rather than make me wait for the item to come in to their own stock.

        But this is the opposite of what Mary Kay expects their consultants to do. And the only reason they have this rule is to maximize the amount of unsold product sitting in the consultant’s garage. There is no other logical business reason for doing this, except to benefit MKC and the up-line. These rules bring absolutely no benefit or value to the consultant or their retail customers…in fact these rules harm the retail customer experience.

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  5. Eyes Wide Open

    “Cheating on your Unit. Helping THAT Unit earn Cadillacs and win trips.”

    Meaning the SD does not earn commissions, credit toward her car, or credit toward a trip. Only the SD of a Unit earns the car, the commission from consultant purchases, and trip credit, and all the other fluffy unimportant recognition. So one must laugh at the notion of cheating on your Unit.

    I would wager that the SD who is selling inventory at 50% is just trying to offload her store to reduce her personal debt.

    You just can’t make this stuff up!

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    1. Exactly! The Unit doesn’t earn the car or the trip, the SD does and so the SD gets to profit from the downline (unit) paying into the scheme.
      That was another of this cognitive dissonance things that I pondered over… it doesn’t make sense!
      Yet you get swept up in the moment and help your SD win that trophy on wheels… that again shows the cult tactics at play. It’s all smoke and mirrors! Mary Kay is a cult.

  6. NayMKWay

    Reading that conversation, I was reminded of one of the many one-liners uttered by Norm Peterson (George Wendt) on the show Cheers.

    “It’s a dog-eat-dog world, and I’m wearing Milk Bone underwear.”

    Mary Kay Corp may have rules against this sort of thing, but their system creates the very desperation that drives Directors to it:

    – Too many Directors for the market, thanks to endless-chain recruiting.

    – Minimum purchase requirements to qualify for commissions.

    – Overpriced products with little retail interest.

    – And of course, turning a blind eye to activity that breaks the rules but benefits the company’s bottom line.

    It’s only natural that Directors would turn on each other to survive. Don’t blame the Directors, blame the system.

    And get the heck OUT, is my advice. Get a regular J.O.B. with real income and real benefits.

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  7. Shay

    I was an Ulta a few weeks ago and I bought a two faced pallet that was on sale and the girl told me I came just in time because they were getting ready to be sent back to the manufacturer..
    because they weren’t selling see how normal retail works?

      1. MySharona

        Heather- if you’re near an outlet mall, look for The Cosmetic Company Store. This is the outlet for Estee Lauder owned lines, and they have a lot of Too Faced along with MAC, Clinique, EL, Origins, Bobbi Brown, Tom Ford, Smashbox, Glam Glow, etc. If you see something you like there, get it, because there’s no guarantee they’ll get it again. They sometimes have great specials like $5 MAC lipsticks and low prices on EL Night Repair.

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