Find the Money For Your First Order

A Mary Kay sales director’s entire life revolves around recruiting and initial inventory orders. Units are maintained with initial inventory orders. Cars are won with initial inventory orders. The first order a consultant makes almost always represents the most product she will ever order.

Thus, lots of time is spent training directors on how to “pull inventory” (as Dacia calls it). Part of the trick to getting someone to order thousands of dollars of inventory is finding the money to do so. If you’ve got someone who needs to make some money, how likely is it that she has a bunch of money lying around to buy MK inventory?

So our buddy Linda Toupin (retired NSD) had a helpful handout as part of her sales director “boot camp” that she sold to sales directors. (The cost ten+ years ago was $770!) It’s all about finding money to buy that inventory. The first option includes cashing out investments and retirement accounts. (Terrible idea!) And then there are all the ways you can borrow money from people.

Notice that the very LAST way Linda suggests you find money for an order is by SELLING PRODUCTS. Imagine that! They claim you’re going to have a retail business, and yet the last possible way you could get money to by products from MK is by making sales to customers!

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11 COMMENTS

  1. “The first option includes cashing out investments and retirement accounts. (Terrible idea!)” No kidding. When my sister’s furnace went kerblooey about 20 years ago, she borrowed against her 401k and the income tax hit was astronomical. And I hope the potential pinkies out there will understand that YOU NEED THAT MONEY FOR WHEN YOU RETIRE!!! If you join MK, there is no pension and you will not make money doing it. You will lose money.

    The obvious problem with credit cards and bank loans (besides the bank laughing you out of the place when you tell them what you want the money for) is that they must be paid back. Where are you going to get the money to pay back your debt in a timely manner? You’re not going to make money in MK. You’re going to lose money. If you don’t pay, they will come after you and will take action, not to mention that your credit rating will end up somewhere in the center of the Earth and make it difficult or impossible to ever get credit, a mortgage, an auto loan ever again.

    Sure, someone who loves you might loan or give you the money. Will they still love and respect you if you don’t pay them back and squander their $$$ on MLM crap and never make a cent at it? When you start trying to recruit them and beg them for pity purchases after they funded your “business”?

    Selling stuff has its own host of problems. A piano is a big, heavy thing that’s not easy to move around. There’s a limited set of people who would buy one since you need the space and strong enough floors and most of all, you’re able to play the darn thing. If you have jewelry worth any kind of money, keep it. You’ll never make enough in MK to earn anything remotely similar. China and silverware are becoming less and less useful in our increasingly casual world so unless yours is very old or very desirable you’re not going to get a ton of cash for it. Plus it’s heavy and fragile and costs a fortune to ship.

    Coin collection is something I know about and could bore you for hours with. Basically, the only US coins worth any significant amount of money are very old, made of gold, or have rare year and mintmark combinations (mintmarks being the little letter that tells you where the coin was minted.) Serious collectors are shy about buying valuable coins that haven’t been professionally graded (assigned a number from 1-70 based on its surface condition) and slabbed (put into those hard plastic holders) due to the number of counterfeits out there.

    TLDR: no, that coffee can full of wheat pennies and Bicentennial quarters isn’t worth anything. And if you do have valuable coins that are worth money, don’t sell them for the purposes of buying MK.

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    • You’re so right about pianos. I play and I taught people how to play for a good long while, and it’s hard to GIVE a piano away! Used pianos are everywhere, from church basements to schools, YMCAs and so on, to the point that most places don’t want one. There’s a saying, “It’s easier to get rid of a dead body than to get rid of a piano.” Lol!

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  2. If MK is such a money making opportunity why wouldn’t Linda loan her new consultant the money for inventory ?

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    • Parsonsgreen…your question leads to a slippery slope of reasoning. Why does Mary Kay charge for the starter kit at all? Then the elephant in the room: why have a door-to-door sales force at all? Sell the products on-line and you can eliminate the extremely expensive MLM distribution channel, allowing these same products to sell for 75% less, making them more value competitive.

      The reason they don’t do these things? Retailing to outside customers is not the goal because the consultant is the customer. MLMs like Mary Kay are not structured to provide positive cash flow to the customer sales force. They are structured to take money from the customer sales force to provide cash flow upward to the kingpins and the corporation. These products would never sell at these prices and quantities without a captive down-line of consultant customers.

      In MLM, money is transferred from the bottom 99% to the top 1%. Little, if any, comes from retail sales to folks outside the MLM. Meanwhile, in real companies, everyone makes positive income. All the talk of levels, production, bonus plan, awards, free cars, seminar…is all part of an elaborate pink smoke-screen to hide this reality: Consultants are the target customer of Mary Kay, and these consultant customers provide all the cash flow that powers the Mary Kay machine.

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  3. I was reminded of an episode of “The Marvelous Mrs. Maisel” where Susie owes a bookie $40 (1960, so a lot of money). She has $30 in cash, and reaches out to a friend who has some money (but not the full $10), who reaches out to a friend (who has some money, but not the full amount needed), who reaches out to someone who owes him $1. The bookie says something to the effect of “If you need to set up a bucket brigade to get $10, maybe you shouldn’t be gambling.”

    If you have to consider cashing in investments (selling something big, borrowing from ‘people who love you’) in order to find $600-$4800 (plus tax and shipping) to ‘fund your store’, then maybe you shouldn’t be gambling your future financial stability. And if you have a long-term relationship with a bank, a credit card with a zero balance, or a credit score of 680 or higher, I suspect you probably don’t need the MK ‘opportunity’ in the first place.

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  4. Don’t banks and credit unions check into why you are taking out the loan? And if so, wouldn’t a loan to invest in a pyramid scheme “business” be declined? Apparently not, because they are suggesting it.

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    • He he. Banks know what’s up. For unsecured loans (like credit cards) they don’t care the reason. But some MLMers have tried to get “business loans” to start their little MLM “business”. I’d like to know the exact words the bankers use in this case, as I’m sure they don’t want to offend their customers. “Bank One is not in the ‘MLM’ loan business. We recommend you try another bank.” Good luck with that!

      There are loads of stories of LuLaRoe huns trying to get business loans (at the time, $4-6K was minimum entry price) to start their personal clothing empire. No joy from the banks. In the words of the Soup Nazi, “No loan for you!”

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  5. Ok one of the first posts I found here was one like borrow $600 from 3 friends or if you can’t then try 9 friends and ask for $200… ring a bell?
    That one was CRAZY

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  6. Oh, yes, I remember the initial order conversations when I was recruited. I thought I had made it clear when I signed up that I was not interested in inventory. I knew that after family, job, and volunteering commitments, I would not have much time for MK. But, ya know, full-time income in a few hours a week, amiright?

    The director wanted to set up time to call, so I gave her some times I was available. Oh, no, that wasn’t soon enough. Gotta get that inventory ordered, donchaknow. So I grudgingly agreed to a time to talk that suited her. She blew me off. She set up another time. Blew me off again. At this point, I came to the conclusion that she was playing games. She set up an appointment to call “sometime Sunday afternoon.” At this point, I was annoyed and definitely was not going to wait by the phone for her call. She actually did call, while I was at Ace Hardware buying a garden hose. Oh no, this wouldn’t do at all! I needed to be at a computer with my credit card handy. At this point, I am aggravated at her for wasting my time, and I still have no interest in purchasing inventory, so I’m more than willing to waste her time.

    She finally calls, at the time I had initially told her I was available. I firmly declined to purchase inventory. No, I was not concerned about losing out on the free products that would come with a $600 inventory purchase. I am able to do math, and I could spend $55 on those “free” items if I wanted them, rather than spending $600 on product I did not want or need, and come out ahead. This did not go over well at all with Ms Top Director.

    So then my recruiter, who was in DIQ, tried to persuade me to apply for the MK credit card for my inventory purchase. I politely declined. The next day, she inquired about how my credit card application is coming along. I told her that I have plenty of credit, and I did not want inventory. I did not hear much from her after that, until she reached out at the end of a slow month to try to get me to place an order and reactivate. I told her that my husband had just been diagnosed with cancer, and I absolutely could not take on anything more at this time. After that, crickets. So much for sisterhood and women supporting women and doing life together. But that’s OK. Husband is doing well, I don’t have a basement full of MK products, and life is good here.

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      • Thanks! It’s just that they sell the idea of this supportive circle of MK sisters, but the second I actually need support and I’m not in a position to be a money-maker for the upline…poof! They vanish.

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