Mary Kay Inventory “Investment” Con
The secret to getting Mary Kay consultants (especially new ones) to order lots of inventory is overcoming their objections. New consultants typically are skeptical about spending thousands of dollars on inventory that they’re not even sure they can sell. But no need to test the waters and hold a few classes before you order! ORDER NOW! You’ll sell tons. Trust me.
And so the con game goes. You want to be successful, don’t you? Would a store open without anything on its shelves? Do you think women really want to wait for their cosmetics? Order now. Order often. Have lots on hand and you’ll be successful.
Still not convinced that you need to order thousands of dollars of inventory from the start? Your Mary Kay director will bring out the big guns: It’s an investment. Debt bad. Investment good. Investment is not debt. Credit card or not, it’s not debt. It’s an investment. Get it? An investment in your family’s future.
More is more. More is not less. Not less money to feed your children. Not less money to put clothes on their backs. More products means more opportunity to profit.
And the below story is one that has been circulated for years in Mary Kay. There’s only one huge problem with it: The story assumes that you’ll be able to sell all of the inventory you’ve ordered. Anyone who’s ever been in Mary Kay and is honest about it will tell you that it is extremely difficult to sell the product.
Oh yeah, there is an occasional woman who is beating down your door to order something. Once in a while you’ll find a hostess who has 8 women show up for your class and you get 5 new bookings. But those instances are so few and far between. The truth is that very little of the Mary Kay products are actually retailed. The vast majority (I estimate more than 80%) actually sits in basements and garages.
So while this “investment” con sounds great when you’re in the pink fog, those of us out of Mary Kay recognize the story for what it is: pure fiction.
We have some money to invest and I was thinking about the story one NSD told. While she and her husband were lolling around the pool he said, “Honey, I meant to tell you; I invested $10,000 in (whatever) and we will make 7% interest in 7 years.”
She said, “Oh, really?” He said, “What’s wrong?” She said, “Nothing.” He said, “I know something is wrong; what is it?” She said, “I know you think of yourself as a great businessman.” He said, “so tell me what’s wrong.”
She said, “Well, I was thinking that if you had invested the $10,000 in Mary Kay products, I would have received 13% (her Unit Commission) on $10,000 immediately – that would be $1,300, plus, some gorgeous prize, probably a TOP TRIP with Mary Kay and 50% – $10,000, when I sold it!
And it wouldn’t take me 7 years to sell it! That would be $11,300 we would make on our $10,000. A consultant with 5 recruits would make the same commission as the NSD!
Do you look at your MK inventory as an investment, or something you hope you can sell? What are you making on your Money Market Account? 4%, 5%? How about your savings account, 2 1/2%, and CD’s, 5%? If you’re doing GREAT in the Stock Market you may make 15%, (and no one is doing great in Stock Market right now), or you may lose it all! We have looked into different plans such as an annuity which makes 7% if we invested $15,000 and leave it there for 10 years. Bonds could make 4% or 5%, if interest rates are high, but they’re low so that won’t work.
I have money in a IRA. That’s good. However, I am past the age where I can add to it and if I take it out I am taxed on the full amount THIS YEAR. Everyone is telling you to plan for your retirement. I do believe that you need to start some kind of retirement RIGHT NOW!
Oh, you aren’t making enough money to save any? Work your MK (along with your regular job) and put your profit into a retirement account. You say you don’t have time to do anymore than you are doing now? Sure you do. You better, if you want any money when you’re 65 or older.
The best interest you can get on your money RIGHT NOW is to invest in your Mary Kay Inventory (at 55% UNTIL JUNE 28TH) and learn to be the best Mary Kay Consultant in the business. Listen to motivational tapes in your car daily. Other consultants are doing it. Find out how.
Do you get tax benefits at your other job? What if you can’t sell it? Oh, well, the only reason you wouldn’t be able to sell it is if you never told anyone that you were a Consultant. What if you have to send it back to Mary Kay. So what! You had to have sold some of it at 50%. You can’t lose any money.
What about the interest on the loan? What about it? When you are working a profitable business, making a lot of money you need tax benefits. It is important to get your TAXABLE INCOME down to as close to zero as possible. Say you are making $40,000 at your job, then want enough tax shelters to get it down to as close to zero as you can. You probably don’t have ANY tax shelters working for someone else. With Mary Kay you do!
Maybe you do want to quit your job but you say, “The Company pays for my insurance”, not true, the Company doesn’t pay for your insurance, you do! They just don’t pay you what you are worth because they are using the money they should pay you to pay your insurance. DO YOU KNOW YOU CAN PAY FOR YOUR OWN HEALTH INSURANCE? THINK ABOUT IT!
Visit the
“Nobody held a gun to your head.” -Misc Friday PT Critic
Yes, you can pay for your own health insurance, but if you want anything better than bare-bones coverage that’s basically useless in the everyday world it’s ex-frigging-spensive. Especially if you have a preexisting health condition. After he retired, my uncle was paying like $800 a month. Thankfully he had a sweet pension and social security… because he’d worked and paid in from the time he was 15.
In Pinkville, where people brag online about selling $90 at a party because it’s rare…
Yeah, no.
Wow. Mary Kay conflating business terms again.
Account balance after one year, assuming simple interest…
Husband: $10,700
Wife: -$8,700
Yes, that’s negative. She spent $10,000 and got $1,300 back, for a loss of $8,700.
Sales of her inventory can help offset that loss, but 99.6% of participants will never recoup their “investment”. MLM has a terrible track record for ROI. Best to steer clear.
I did the “full inventory” purchase on multiple occasions in MK when I would “restart” my “business.” Horrifying. And put it on the MK credit card, through Chase, and then later they just became the MK credit card with Visa. The interest, when I finally ditched the entire mess, was 28.99%.
So much money. So much time. I was such a good little hun bot. If you’re new here and just trolling around, read a little more. You can ask any questions here (unlike at your Monday night live or Tuesday night success meetings, or post it on your social meeting) any lingering doubts you may have about the “business.”
We’re successful women who escaped the snare of MK.
Who is it that is hanging around reading the daily post and reader comments enough to downvote someone saying THE TRUTH about how expensive and pointless “investing” in MK was? Are you here solely to downvote TRUE statements, are you the kbot spy, reporting back on PT’s topics and you can’t resist the urge to disagree but lack the integrity to speak? Lack the courage of your convictions to put forth YOUR truths to see if they can withstand opposition?
If you can dispute the items you downvote, DO. IT. I am DYING TO HEAR IT, truly, I am. Income claims WILL require a scanned schedule C with Tracy being the one to redact your personally identifiable info, but we – I speak collectively – are ready and willing to consider YOUR truth if you can substantiate it.
This is so absurd, it’s really gotten on my last nerve obviously lol. Quit the passive aggressive style you are trained in and speak up, defend your cult, LET’S HEAR IT, PLEASE. Not solely in incoherent Friday rants, defend yourself here since you believe you can. Nothing changes if nothing changes, silence is acceptance so even your silent downvotes don’t cancel out your acceptance of PT AS TRUTH because you don’t have the courage to speak the truth you believe you believe in.
Mary Kay shifts the risks and costs of inventory to the IBCs by pretending it’s a good thing, not the financial ball and chain that it really is.
In a REAL business, inventory is not an investment. It’s money tied up in something that has to be SOLD to get that money back out. It costs money to store it and insure it, and you risk it becoming obsolete or spoiling and becoming a total loss before it is sold. For most inventory you never get as much out as you put in when the carrying costs are included.
In a real business the magic “profit level” on inventory is as close to zero as you can get it and not lose customers.
It’s like retail customers who think that “in the back” is some magical realm where the exact item they want is waiting for them, and their joy is being crushed by you, the recalcitrant employee who won’t just pop into the stockroom and grab it for them. We couldn’t get people to understand that if we had all this great stuff “in the back” it wouldn’t be languishing back there; it’d be out on the floor so we could sell it and make money off it.
Most departments had very little in the stockrooms unless it was a seasonal item that got put away until next year (rare, most of it was just clearanced out at the end of season) or not to be put out before a certain time/event, like Harry Potter and Star Wars prequel merch.
MK et al are counting on the fact that most people don’t understand how real businesses handle inventory in order to get n00bs to frontload and have their own version of “the back”. And learn in short order why having so much stuff “in the back” is a bad idea.
“in the back” is the retail version of a “magic Bag of Holding”
One average bookkeeping class would be enough to unmask the fraudulent practices MK uses to delude their victims. Cost of Goods Sold – them’s some magic words. I am CERTAIN there are kbots who have had good financial education but yet, they must suspend belief in all they know to be factually true, and I guess not much can offset that internal need that brings them to believe in mk.
And this is why you’re strongly encouraged to get your tax and bookkeeping information from carefully curated classes WITHIN the Pink Fog. Everyone else is just being negative, and there’s no need to worry your little brain with all the details–that’s what the professionals are for!
To make money, the NSD with the degree from Harvard Business School was more than willing to mislead her recruits and downline.
Are you referring to GMB’s “honorary” degree? Puke.