Advice for DIQs
Written by Leslie
If I had to do DIQ all over again, there are things I would do differently. I did 8 years in Mary Kay and I really think I had a good unit.
- I wish my director would have been more understanding when I chose to go to college (why do that if you’re dedicated to MK was her response).
- Same thing when I ultimately had to get a job. I know they call it Journey Of the Broke, but this lead to so many mixed emotions because I’d never been so broke until I did MK. I just didn’t understand, I was often queen of sales for my unit and felt like I was hiding a huge secret. Try as I might, I never made 50%.
- Shark Tank, of all things, really put into perspective for me. A 50% margin is what you need to break EVEN (oh shoot). Profit comes at 65-90% profit margin depending on what you’re selling. One item to keep in stock you’ll need a 65% margin, over a hundred like in MK and you’re going to need more in the 80-90% range. If a consultant made a pitch on shark tank the two critiques they’d likely make would be: you need to increase your margins significantly, and that inventory is a nightmare and will bleed your business.
- Don’t encourage taking out debt to fund an inventory. Because the company measures success based on what you buy not what you sell (minus cheap bracelets at weekly meetings), it just makes that jump into debt rewarding for superficial reasons like recognition and prizes. A small business should not be taking on debt, especially in the first month. Normal business owners would get investors, start a campaign to raise capitol, take preorders.
- Not make me feel dirty when I left. This was the most saddening and surprising thing I experienced, and again I was in a pretty good unit. It was the right decision for me. My mom, whose an executive of a business says “as hard as it is for the company to lose an employee and train a new one, I never want someone to feel held back or like they owe it to us to stay.”
By comparison of my time in MK versus now: Now I’m in a company that was named one of the top companies to work for in its industry. I thought MK was a company that valued me by giving me opportunities to prove myself. But where I am now, the tone is totally different in a positive way.
Day 1 the new place said “please don’t pay for anything out of pocket; it should never cost you to work here” (that was a culture shock to say the least!) And please don’t do any work, including checking emails, without being paid for it. (No zero sales parties)
Do I think MK is a terrible company? No. Do I think they either intentionally or unintentionally mislead people? Yes. Do I think they’re a good place for women to work? It depends.
A therapist once told me that you’ll find the jobs/hobbies/relationships that feed your top 3 “wants/desires”. When I was in MK I wanted to feel pretty, classy, and have a reason to travel. It fed all of those. But now my desires have changed, and MK would be a horrid match for me.
I think that’s why this site can be feel so outrageously taboo to each “side”. If you felt your desires were being starved in MK, you want to convince everyone to jump ship and become saddened when people won’t. I try to embrace the grey–that nothing’s ever black or white–and ultimately people who are feeling nourished by MK will stay because the jump doesn’t make sense.
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Leslie, while I appreciate your open-mindedness, you remain naive about the nature of MLMs like MK. It is mathematically impossible for any MLM downline to be profitable as a whole. The bottom 99+% must lose money for the tippy top of the upline and the company to turn a profit.
Yes, you can have an entire downline of willing participants, all happy with what they are getting out of their experience. But you simply cannot wish away the exploitation. The downline necessarily loses a lot of money in the aggregate regardless of the mood of the participants.
While you may be okay with this, so long as everyone is happy and nice to each other, being neutral about the very real exploitation is dangerous. Whether they care or not, these ladies are wasting money and time on something objectively harmful to their own downline, their own pocketbook and their own reputation.
Off topic slightly – pyramid schemes have been pitched before on Dragons Den UK and Canada. In the UK one it was a water-generating dehumidifier with water that made Duncan boke and Deborah tear him a new one. He was a top Kirby seller. Deborah said that method of sales really annoyed her “you used to stand in someone’s living room and barrage them until they capitulate and buy that carpet cleaner like you are trying to do to us.” “It’s good old multi-level pyramid marketing” quoth he. Then it all fell apart and he left with nothing.
In Canada a guy tried to recruit the dragons into his Lyonesse downline! He denied it was a pyramid scheme (he called it “the nasty p word”). Arlene got him to explain it and came back with “what shape have I just drawn?” with her hands as he explained adding the dragons to his downline.
But yes 50% margin you might, just might, break even. On a good day. You need a margin of at least 70% to make profit. The margins for Covergirl in Target are about 1300%. So they can put it on clearance at pennies to the dollar and still make a profit.
It’s impossible to profit in MK in the UK where the 50% “discount” is 40%. So you pay MK UK 60% and make a loss. To make a profit you would have to 2x-4x the price in the Look Book. So that £30 foundation would need to sell for at least £60. But no customer will want to when they see the price of £30 want to pay over that. £60 is Dior territory. £120 is Pat McGrath or Tom Ford. And MK doesn’t have the quality to back up that price like Dior et al do. So I have no idea how MK consultants over here even break even let alone profit with such poor margins. Even PUCs are paying over the odds for their own products at a 40% discount.
The other problem identified is that inventory is an albatross around the neck. It’s debt until it’s sold at a profit. MK teaches their consultomers to conflate revenue with profit. And underestimate the hours spent selling that one product to generate absurd hourly rates. So you had a $200 party? So you take $100 home assuming no discounts, no hostess credit or gifts. And you were at the party for 2 hours so that’s $50/hour. Except it’s not. What about the gas used to get there? Other expenses. And it wasn’t 2 hours. It was 12 hours. 6 hours warm stalking to get the booking in the first place, 2 hours coaching and guest listing, 1 hour prep, 1 hour drive there, 1 hour drive back. 1 hour post party cleaning up and doing paperwork. Another couple of hours if you didn’t have inventory on hand to sell there and then and have to deliver. So that’s 14 hours now. So that’s an hourly rate of $6.67. Below minimum wage.
Due to the constant product and packaging changes MK love to spring on their consultants with no warning, that inventory is very volatile. It may turn out unsellable tomorrow and that’s $4000 down the toilet. And you can’t act like a retailer and return it without killing your IBC #. I’m a shareholder in several retail businesses (2 supermarkets and a pharmacy). If a product is not selling or it’s end of life or end of promotion it goes back to the wholesaler or mfr with no fanfare. We also have insurance. If a fire or flood befalls us the insurers take over. MK consultomers rarely have insurance so a fire or flood or A/C outage that melts lipsticks is even more disastrous. I haven’t seen any training documents saying get insurance for your inventory. The next question is a separate business insurance or just a rider tacked on to your homeowner’s insurance?
Basically it’s a losing proposition for everyone except MKC. They don’t care what you do with your inventory when they have your money. The expenses landed on the consultants from IBC to NSD are heavy – inventory, production, unit prizes (to be fair they are cheap – about $1-2 each; such reward much prize), seminar, air fares, the whole lot. Normal businesses pay for their employees to go to trade shows and seminars. Free travel, free hotels, free food. And they are useful events rather than happy-clappy rah-rah sessions that spew the same old trite aphorisms that never worked in the 1970s let alone 2020s.