The truth about what you can make in Mary Kay – Warning – explicit!

 I got this information from a pro-Mary Kay blog where the poster was being chastised for being so “negative”.  I went back to get the name of the blog, but the post is gone now, so I can’t find where it came from – I was on several blogs during the day.  Take it for what it’s worth, but I found it to be pretty much a fair representation of what it takes. 

I have to say too,  this is one of the few times I’ve been glad that Steve is miserly with our money, his money, whatever.  I’m glad I didn’t have a lot of inventory. 

Also, remember these formulas when attempting to “replace” your salaried income with MK income:
Of every dollar (in profit, the 40% of the 60/40 split) you make:

1. 33% goes to taxes and savings
2. 33% goes to additional expenses (meetings, gas, event fees, Seminar Fund, Fall Advance Fund, Career Conference Fund, etc)
3. 33% goes to YOU to “replace your income.”

So for every 10 dollars you sell (retail):

$5 gets used for wholesale ordering
$1 gets used for shipping, Section 2 on that wholesale order
$1.33 gets set aside for your taxes at the end of the year and for savings (emergency fund)
$1.33 goes into an account to cover other expenses of working this business
$1.33 goes to you to replace your income

So let’s say you currently make $50,000 per year. Assuming you’re at the 28% tax rate with no other things coming out, you NET about $36,000 for your household. That is the salary you’re looking to replace.

$1.33 represents 13.33% of that $10 sold above.

To get $36,000 clear cash for your household based on the formulas above, you need to sell $270,000 retail per year.

Let’s break it back again.

Sell $270,000 retail per year (that’s about $740 per day):

$135,000 in wholesale orders
$27,000 for shipping and Section 2
$36,000 for the tax man and savings
$36,000 for your other expenses
$36,000 for you to replace that salary

Now all that may seem like ALOT. It IS. But it’s also a realistic picture of how your dollars need to be allocated if this is your ONLY source of income.

Expenses from this business, if you participate in everything (you know, show up to go up) are HIGH! So you cannot ignore those.

Cannot ignore the IRS, and if this is your only income, you surely better be saving a good chunk too!

And if you faithfully re-order at the 50% level for every dollar you sell, and don’t embezzle from yourself, then you can’t ignore that either.

Now let’s look at this the other way.

Let’s say you SELL your way to an Emerald Star Year ($3600 in WHOLESALE orders every quarter). Notice I say SELL your way and not ORDER your way (we’ll talk about debt in a moment)…

That’s $28,800 in retail sales.

$14,400 in wholesale orders
$2,880 for shipping and Section 2
$3,840 for the tax man and savings
$3,840 for your other expenses
$3,840 for you to replace that salary

Not close enough, eh?

There’s always recruiting, BUT even with that, you cannot neglect your personal sales. And your recruiting commission has to be split in 3rds also. And if you recruit enough to become a Director, your expenses only get higher.

There is an NSD local to us who did not quit her “day-job” until a few months AFTER she debuted as an NSD. There is some wisdom in that!

Of course, I look at all of this as a single, self-supporting female with no children and no husband.

If you are married with kids, while you may another another income coming in, your expenses are likely higher at the end of the day (kids are expensive!).

A spouse is helpful if you are going to lose your health insurace and other benefits once you quit.

If I were you, I would sit down with a financial planner and really look at whether or not this would be a fiscally responsible decision for you.

If you are realistic and honest, only 15% of every SALE can be “pocketed.” The other 85% has to go back into supporting your business and covering your expenses. That is the REALITY if you do this the “right way.” Oh, and if you do quit, resolve and vow and PROMISE yourself that you will NOT go into this venture in DEBT or making LOANS for inventory!!! You do NOT NEED thousands of dollars in inventory to run this business, especially if you do not have an established and loyal customer base yet, and if you are not especially skilled or confident in your selling ability! Just DON’T DO IT! I don’t care what your Director says, what your NSD says, DO NOT GO INTO DEBT FOR INVENTORY!!!

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7 Comments

Filed under Life in General

7 responses to “The truth about what you can make in Mary Kay – Warning – explicit!

  1. Meg

    Yup, sounds about right. Sounds like eBay, too. I lost my shirt. And my husband’s.

  2. Pingback: Mary Kay II « Aphra Behn - danger of eclectic shock

  3. You’re exactly right. I got involved because my niece, who is has a master’s degree in elementary education and is a very Christian woman decided to get into Mary Kay and I decided to “help” her. She is still caught up in believing that MK is all that it says it is, and is a Christian company. She’s working so hard for a car, I haven’t really talked to her about what’s really going on because, quite frankly, I don’t think she would believe me. At least I didn’t get into it to make a fortune, but it still galls me to think of how stupid I was and how I blindly believed their come on lines. The whole thing just leaves a bad taste in my mouth.

  4. NoMaryKay

    Wow I sold Mk for 3 months I knew it wasn’t for me .

  5. Maggie

    It is a company that supports a christian life. It is your own business. If you have good business sense, can sell products, and keep records you can make the business work for you. Not everyone is cut out to have their own business. I love the products and love the enteraction with other women. My husband supports the family, so I can do this for fun. My recruiter has done this for the past 4 years with no other income and has been able to support herself. The company will buy back any product you purchased wholesale in the last 12 months. They give you 90% of what you paid. Yes, your are still out 10%, but 10% is better than 100%. Hope all of you find other sources of income that help you live happy fulfilled lives.

  6. I totally agree with you, Maggies.
    And I agree with you, Minnow, about not going into debt for inventory…unless you really believe you can sell it. (But you should only need to do that once…not over & over). Maggie’s right …if in 12 mos, you still have it on your shelf, you can return it.
    I have been a consultant for 3 yrs and I am not making the money I would like to. But, Minnow, I think your calculations are off. Each wholesale order has the same shipping cost…no matter how big. Taxes are there, yes, as they would be in any business. And expenses stay in the same range whether you are selling a lot or not. So, if I’m only selling $20,000 per year, I’m not going to see much profit. But if I bump that on up to $40 – 50,000, my expenses (which are tax deductible) will stay in the same range (except for taxes) and I will pocket more money.Then, I start to get other perqs, like a car.
    And Mary Kay’s dream was to share the opportunity, so no one can make the really big bucks w/o a team….a team that is also making a little extra income or a lot, depending on their personal motivation. Then, the bonuses from Mary Kay start as they compensate me for leading other women.
    Not everyone behaves as Christ, no matter what they say their affiliation is….just like in any environment, including church. So, there are aggressive directors who badger their people…but that was not MK’s dream and the company does not encourage that.
    Her dream was to encourage other women to be their best….as customers & team members. I have learned so much about myself & how to grow stronger by attending wkly mtgs & other events. Mary Kay’s value to me has not been in my pocket, yet, but in my heart.

  7. Emily Thornton

    I was an idiot at got a loan for my inventory…my recruiter said that i would get all my money back from taxes if I didnt sell it all. I have no dang clue of how to do that? Im sure it was a big fat lie but I I do not know how to deal with my loan. Will you help me?

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