What I Wish I Knew About Inventory
When I first started Mary Kay, (more than 20 years ago!) I bought into the hype. I heard about inventory, was told I NEEDED it in order to be successful, so I bought a bunch. After all, who in their right mind starts Mary Kay with the intent to fail? We all start with the intent to succeed, and if that’s what we NEED, then we’ll do it!
Back then, I was given a sheet from my sales director that outlined how many classes per week you needed to earn so much, how much the supposed average sales per class were, how much the supposed average reorders were… Little did I know, all of that was total fiction. Made up. (By women who blathered about how Christian they were.)
These days, Mary Kay Inc. has an official inventory worksheet. It has looked like this or this in the past. I read those sheets, and I realize that just about everyone “needs” $2,400 or $3,600. Heck… You even give yourself extra points on your worksheet if you plan to attend weekly “success meetings.” What? You need more inventory because you’re going to waste your Monday nights at rah-rah sessions? At a minimum, the company “recommends” $600 for everyone. Wow!
Give yourself more points depending upon how many appointments you’re going to hold each week. Don’t forget that you’ve been lied to about how long an appointment will take, and you don’t yet realize that no one wants to have classes. No big deal. If you don’t know these things right away, you’ll give yourself a zillion points and you’ll “need” more inventory.
Now look at the “goals” toward the bottom. I think a lot of women get involved in Mary Kay and have those goals up front, because they have no idea what it will take to get there. (i.e. They’ve been mislead in the recruiting process like 95% of the recruits are.) But if they have those goals… voila!… they add on 7 points and “need” a minimum of $1,200 or $1,800 wholesale.
So what do I wish I would have known then?
- All the guidelines about how much inventory you “need” are inflated. No, Mary Kay Cosmetics and your sales director are not looking out for YOUR best interest. They are looking out for their own, and that means pushing you to buy as much as possible.
- $600 is the magic number for inventory, and will the be the lowest option that your recruiter offers to you. This is because the contests run by Mary Kay Cosmetics all depend upon “qualified” recruits, and qualified means that they have ordered at least $600 wholesale.
- The company changes the products on a regular basis. Products are discontinued, formulations are changed, and packaging is changed. They do anything they can to change the product so that yours is outdated and no longer listed in the catalogs (and therefore harder to sell). You’ll need to “invest” in the new products because that’s what’s in the catalog.
- Your sales director will try to convince you to stock inventory because women won’t buy if you don’t have it on hand. That is not true. Those who have inventory do not get significantly higher sales. They might have a few extra items sold here and there because they have it on hand, but it’s not enough to justify sticking thousands of dollars into inventory.
- Your sales director will try to convince you to stock inventory because it will cost you $9(ish) for shipping each time you order from the company. It is not that big of a deal. Even if you placed an order with Mary Kay Inc. every single week, in a year you would spend less than $500 on shipping. That is still less than the interest on a credit card or loan. Do you want a few thousand dollars out of your pocket and into inventory, or would you rather pay a little shipping fee when you need something? Oh, and they always forget to tell you that even if you have inventory, someone always seems to order something you don’t have on hand. You need to place and order and pay shipping for that too. So why not avoid inventory and order on an as-needed basis so you don’t get stuck with any outdated products?
- In order to receive your products at wholesale (50% discount off suggested retail), you must be “active.” Active status is achieved in the month you place a minimum $225 wholesale order (A1) and the following 2 months (A2 and A3). Example: You order $225 wholesale on April 6. You are considered active in April, May, and June. After June, you must place another minimum $225 wholesale order to receive your discount.
- Your consultant agreement prohibits you from buying products from anyone other than Mary Kay Inc. Why? To force additional purchases from corporate. If you were free to buy products from another consultant, you would both benefit when you need a couple of products to fill an order. By forcing you to buy only from corporate, Mary Kay Inc. profits from another wholesale purchase, especially if you must purchase the minimum $225 wholesale.
- Your director may tell you that it’s against the rules to trade products with other consultants. That’s not true. The consultant agreement only specifies that purchases of products must be made from Mary Kay Inc. It does not address trading between consultants. Your director has told you it’s against the rules in order to try to force you to order from the company and pad her commission check. You should ignore her, and trade products if you can find a consultant with what you need.
- The lure of “free products” when you first sign up is available during your first AND second month as a consultant. Sales directors try to get you to purchase an inventory package of $600 wholesale or more during your first month in order to get product bonuses from Mary Kay Inc. Those bonuses are available when you make an inventory purchase in month one or two. Example: You sign up on September 20. If you purchase an inventory package of $600 wholesale or more in September or October, you can receive free products. If you wait until November, you will not receive free products, no matter how much you purchase.
- You can use Mary Kay’s “ product repurchase” option at ANY TIME. Mary Kay will buy back from you an amount of products equal to your wholesale purchases from them for the last 12 months. (Many recruiters and directors will lead you to believe that the repurchase option is available ONLY in your FIRST 12 months with the company. This is not true. It can be done at any time.)
- In the U.S., the amount you receive back for your products in the product repurchase will be based upon what you paid for them. You must provide documentation proving your purchase of the products. In other words, if you traded products with another consultant, you won’t have a Mary Kay receipt showing how much you paid (because you didn’t pay). You won’t be able to send those products back.
- Limited edition items almost never “run out”. If they do, it is only because the sales directors scared everyone into thinking they’d run out, so everyone bought more than they needed. This tactic is often used on the Christmas items. Sales directors want you to buy, buy, buy to help pump up their commission checks. The bottom line is that limited edition products do not sell as well as they’d have you believe. And if MK really does run out, you’ll be able to find plenty of limited edition products on eBay!
Oh, how I know that the Kaybots are seething because we’re telling their potential recruits about this. They are able to frontload much more when the whole story isn’t out there!