Monday, March 10, 2008

Inventory discussion

Before I even begin, let me start off by saying this post will be controversial (to put it mildly), but this is the Balanced Mary Kay blog, and I think this is a very important issue.

I saw a reference to how Dave Ramsey counseled a Mary Kay rep about inventory debt on a WAHM board I visit.

You can see the original source here. Please be sure to listen to the live recording because the written part is not complete by any means.

The consulant in question has about $4000 in inventory. She is selling, but she is using 50% of her sales to restock her inventory. She and her husband have a lot of debt (not just from Mary Kay). Her initial inventory purchase was $3600 and she also bought about $1000 in marketing materials, the carrying case, etc.

Her husband wants her to sell through her stock and use that money to pay off her MK debt.

There are a few points I want to make about what Dave Ramsey says:
  • Dave says several times what a "wonderful" company Mary Kay is.
  • Dave says he believes Mary Kay is an excellent opportunity.
  • Dave advises to keep "a few hundred dollars worth" of her "best sellers" and then for other stuff order often enough "to keep the UPS man busy." Since it only takes a few days to get products, having a fully-stocked store isn't a problem.
  • Dave says that "some leaders" have the "mistaken process" of loading up their consultants with a garage full of stuff so they can get their pink cadillac, and that is the problem - not with Mary Kay the company in general.

So, what do you think?

Mary Kay is one of the few Direct Sales companies that encourages inventory.

On the other hand, it is one of the few companies that hands customers product as soon as they purchase it. Most other companies have a wait of up to 2-3 weeks for orders.

I know we will have people on both sides of this issue, and that's fine. Just keep it civil, folks. :D

74 comments:

  1. I would venture to say the majority of people who are targeted by MK are not salespeople. They are not people who are knowledgeable about skin care or cosmetics. So why would you want to persuade this person to order thousands of dollars of inventory?

    Especially since new consultants are encouraged to start out with family and friends -who do you know who will want to help you in your new business? And it only takes a few days to ship. Family and friends will wait. I never understood the push for a large initial inventory order.

    Until you run out of friends and family and have to actually get customers that you don't know, you have no way of knowing how well you will do. What if you are not a sales person?

    Yes, the 90% buy back. You still lose 10% plus the cost of samples and everything else you cannot return. Then the phone call from your director when she learns that you are returning your inventory. "But you will go to MK heaven! You won't be able to ever sell MK again! Don't you want to leave the door open for later, when your circumstances change and you have to make some moeny??"

    I am sure not all of the recruiters in this Godly company are frontloading, but enough are that even this "Balanced Mary Kay" site is talking about it.

    ReplyDelete
  2. getting back 90% is more than you will ever get back from any other business venture if you decide to quit. That is one of the few things that makes it better than other direct selling companies. Critics always focus on the 10% but at least you are getting something back. Its an investment and it stands to reason that you might have some loss, but MK has given us a system in place so that we wont lose everything. How can you criticize that? No other business venture that I know of will even let you return any of your product that you purchased.

    Does anyone know the buy back policy with Avon, or Warm Spirit etc. Do they have one?

    Open a barber or beauty shop and call it quits after a year, can you send some of your supplies back and get some of investment back? Dont think so. How about a day care or a landscaping business? Dont think so on those either.

    The very fact that there is a 90% buy back makes me feel good about doing this business and recommending it to others.

    As far as all the other supplies you may buy, write if off on your taxes and call it a day. MK does not have to be a total loss.

    Your director is supposed to call you and let you know that you wont be able to sell MK again. If she didnt call, then there are those that would accuse her of not caring. Sometimes the directors cant win no matter which way they go. If they call the consulant they are criticized, if they dont call they are criticized.

    Do what is best for you, tell your director so and let that be the end of it. No drama has to follow

    ReplyDelete
  3. Any member of the Direct Selling Assoc. has to offer the 90% buyback. It is not done out of the goodness of MKC's heart. If you go to the DSA's website it states it clearly.

    And chances are if you are going to open a barber shop, landscaping business, day care, etc. you would be recommended by your financial institution, friends, family, etc. to think about the investment for more than a day. MK tells you to sleep on it and if you have "pink dreams" it must be the right decision.

    And it's nonsense that you can never sell MK again if you return your inventory. It's been done multiple times. I, personally, know 2 people who've done it.

    ReplyDelete
  4. in that case, then one would do well to go into business with a company that belongs to the Direct Selling Assoc. such as Mary Kay simply because they offer the 90% buyback, because you wont lose all of your investment. Whether or not it is being done out of the "goodness of their heart" or not is of no relevance, it is still there if you want it and it offers some reassurance. All of that seems very positive to me, not negative as you try to spin it.

    I think I would feel better about getting a loan for $4,000.00 worth of inventory,( if that were my choice) than for $20 grand or more to try and start any other kind of business, that carried some of the same risk.
    No matter how long you think about it, over night or over a month, with a bank rep or with your husband, 90% of $20 grand wont be coming back to you if you decide the beauty shop or day care was not a good fit for you.

    As far as not being able to sell again, who knows if that is really true, i dont plan on finding out. The point is, directors have a duty to call an exiting consultant at least to inquire about what made her come to that decision. If the consultant wants to let her know why or not then that is up to her, but I think any descent director would at least call that consultant for some type of exit interview if to do nothing else but wish her well. Directors should not be criticized for calling. However I dont think they should try and convince them to stay. Why would you want someone on your team who doesnt want to be?

    ReplyDelete
  5. I think we got off tract here.

    The topic was about going into debt for MK. I still do not see how it is beneficial for anyone to order thousands of dollars in inventory right off the bat without even holding one SCC on their own. What's the rush? Why not wait to order an inventory after you've gone thru family and friends? When you have customers who do not know you, who do not know how little experience in skin care, cosmetics, or selling that you actually have, then order a small amount and see how it goes.

    I personally would love to hear why it is a good idea to encourage a large inventory order right away.

    ReplyDelete
    Replies
    1. Just as a heads up, many consultants do wait. I have a director who really focused on what was right for the individual person. I respected that, and have a fairly successful business.

      For reference sake, "inventory" options for Mary Kay start at $600 and go up to $3600.

      Delete
    2. If you walk into a retail store and want to buy something they sell, they say," Great! what would you like, you pay me today, I'll order it for you and have it in a couple days!!" You probably wouldn't feel too good about it. You don't HAVE to have inventory but you WILL sell more if you have inventory on hand. It is a personal choice and a good director will help you make the best one for you and not be pushy!!

      Delete
  6. We got off track because you were the first to mention the 90% buy back as if it was not helpful. I was simply stating my opinion that I think it is helpful. Learning about the 90% buy back does help with inventory decision making. I am fully aware of the topic of this post, but since YOU bought up the 90% buy back, I addressed it and that is how we "got off track".

    Personally I dont think that starting off with a bunch of inventory is a good idea, I only brought it up as in comparrison to other business ventures and how even if you did start with thousands it will still be cheaper.

    I personally think you should start with $600 and no higher until you see how well you are going to do. Even if you start with none you can still make a go of it. I started wtih nothing until I worked enough to get my inventory up. I invested little by little. If I had to do it over again, I would start with $600, mostly skin care and items that sell quickly and that run out easily. You can set yourself up for reorders that way. That can take you through your first few skin care classes and wont start you off in debt that is overwhelming.

    ReplyDelete
  7. Geez, calm down.

    Thanks for answering the question, though. We agree that large inventory orders are not a good idea.

    I mentioned the 90% buy back as not a great thing in regards to this woman on Dave's show. Even if she returned all of the $4000 worth, she is still out a minimum of $400, which is a lot of money to be out when you need not have spent that much in the first place.

    ReplyDelete
  8. I like how Dave Ramsey says to keep the best sellers in inventory and let MK stock the rest. And to know what is a best seller, you have to actually be selling. You. Not what your director sells. So he advocates no large inventories. I wish more directors did that.

    ReplyDelete
  9. I've posted my thoughts on a few different places over the past week so you may have already seen it but if not, here it goes.

    I do not thing a new consultant should be making any inventory decisions until after she has held some classes. Do the Perfect Start and then the recruiter should be sitting down and going through what the consultant sold. This will make up her first order. She can even add at a maximum 10% more of items that she sold a lot of as it would appear that those items are popular.

    The people that she will be doing her first classes with, will be friends and family. They don't mind waiting for their orders to come in. And besides, you have to wait for other direct sales companies to deliver your orders anyway.

    Regardless of the size of inventory she starts with, the recruiter is responsible for helping her sell half of it. Anne Newbury taught this and she also taught the 60/40 split.

    Coming from a manufacturing environment, I completely agree with Dave Ramsey on the Just In Time ordering. Sometimes, my orders have arrived within three days.

    Inventory tracking software is also a must so you can see what you sell the most of and what you don't sell at all. This will show you which items to stock and which ones to not stock.

    Just my two cents.

    :)

    ReplyDelete
  10. I figured this would bring a discussion on the board. LOL

    One thing is that the consultant in question had sold about $1800 worth of product when she called Dave's show. This is a rep who is selling products - not just ordering. She was restocking with 50% of her sales.

    I find it interesting that Dave didn't say not to have any inventory - just to have stock of your best sellers and then order the rest as you need it.

    I did not start with inventory. I ordered what people had ordered already. No one had a problem with waiting.

    I think I would rather have inventory with the skin care and not so much with glamour.

    However, that is JMHO and I may change my mind down the road when I see how my customers order.

    ReplyDelete
    Replies
    1. I am working with mostly younger women, who are not really interested in keeping up with a skin care system. I try to teach them the importance, but the younger crowd is more interested in glamour. I have been selling my DOTD makeups that I use during my SCC and Mineral Power Foundation and Brushes younger women LOVE them!! Just my experience

      Delete
  11. I'm too tired to go into it with the depth it deserves but I DO NOT Beleive a consultant should come in with thousands of dollars in inventory. (And I am a director). I do find it is helpful for a consultant to start with some and then build her inventory as she builds her customers and can stock what she sells. I was taught this and fifteen years later - continue to teach as I was taught.

    I would much rather have a consultant order $600 and then sell and order and sell and order then having the order $3600 and not order again for who know how long or quit. One $3600 or 6 $6000 brings forth the same results.

    Personally, I am very, very glad we stock inventory, with the amount of product I move, I couldn't even imagine doing it any other way.... and the majority of my clients need their cleanser, moisturizer, etc... yesterday when they order it.

    As for the directors that want to start out a brand new consultant out with a full store, I disagree.
    Period.... start and build to a full store. No one will ever get me to change me mind on that.

    ReplyDelete
    Replies
    1. I am considering joining and this is the approach I would like to take!

      Delete
  12. I agree that $ 600 should be the max for a new consultant. Most people who start in MK are doing so to MAKE money not to incur a huge debt in order to permit the 1 person who orders 1 eyeshadow to get it quickly! I think that's why they get discouraged and quit!

    Once you get "trained" and your customer based built up, then you can keep the items you know people use in stock.

    I don't think you would plan to open any other business with a huge inventory if you didn't have your target market more clearly defined than "some women" & "some men".

    ReplyDelete
  13. Most people who join most Direct Sales companies are not sales people--I certainly never thought of myself as one (and still don't). This is why I believe there is no reason for a new consultant to start with more than $1200--and that's if she has a lot of confidence. I would never advocate for someone to come in with a Star order.
    I have also found that most people expect to wait because that is what they experience with most direct sales companies. My customers are always pleasantly surprised when I can bring them a product tomorrow. ;)
    I'll add that determining what sells and what doesn't is not an overnight occurrence. I made mistakes for a year or two and then figured out that I don't need eye shadows and lipsticks. I NEED Time Wise on my shelves! I don't keep a huge amount of it either. Right now, I have 5 of each Time Wise formula. This way, I have what I need for me and I have some to sell. I sell more of the Combo/Oily than the Normal/Dry. I sell less lipstick, blush, and eye shadow than anything. It will be interesting to see if the new mineral makeup will turn a new trend in my sales.
    Anyway, I digress. I agree with what eversleigh is saying. There is no reason for a new consultant to come in with thousands--especially if she isn't accustomed to sales. I posted an inventory article on my blog and the point I make there is wouldn't it be more positive and encouraging to start small and have to order more and EARN a Star than to just order more than is needed and panic about whether it's going to sell? I would think so. ;)
    The 90% buyback is great! But that's not license to order $4K in inventory and possibly lose $400 (although that is if absolutely zero sales are made).
    My rule of thumb is initial inventory should be $0-$1200. My thoughts can be found here: http://shadesofpink.wordpress.com/2008/02/17/smart-inventory-choices/

    ;)

    ReplyDelete
  14. Good topic Shay! (obviously)

    I hope that I will have a few minutes this evening to add my .02!

    welcome eversleigh and victoria... also welcome to all the new people I haven't had a chance to say hi to yet!

    I will ask this quickly... so that discussion can continue. Is there EVER a time where it WOULD be appropriate for someone to START (as in first order) with several thousand dollars worth of inventory?

    - In what scenario would that be a smart business decision?
    - Are there directors that encourage such a large INITIAL inventory order?
    - What logic do they offer (if any) for carrying that much inventory so soon?

    ReplyDelete
    Replies
    1. I chose to start with a large inventory for a couple reasons.

      1. I decided I wanted to be a director about a week after I signed my consultant agreement. I had a while to think about what inventory I wanted, where I wanted to take my business, and so on. Once I decided that directorship was my direction, I wanted to have extra stock on hand in case my fellow MK Ladies needed anything. (I like to be helpful.) I have found it highly beneficial.

      2. Tax benefits of a small business. Inventory is generally part of a business loss for the first year in business. The tax returns in my national area, on average, see a $2-3k positive shift.

      3. Motivation. I just know me, and I'm the sort of person who needs someone else to make deadlines for me. By taking out a loan to pay for my inventory, I was going to make sure my inventory paid me back.

      Delete
    2. It's also way easier to just hand someone the stuff they buy rather than making deliveries and playing UPS all day.

      :)

      Delete
  15. I also want to make a comment on the "Just in time" ordering that stores do.

    Stores order merchandise so it arrives "just in time" for the customer to pull it off a shelf, not so a customer comes to an empty store.

    If a MK rep were to truly use "just in time" ordering, they would order product so it would arrive right before a customer requested it.

    This, IMHO, requires a level of psychic ability that I simply do not have. :D

    I suppose you could get an idea of when someone would need to reorder by calling periodically, but even then it would not be an exact science.

    ReplyDelete
  16. David, I can't think of any good reason for a new consultant to come in with a large inventory order. Even if she had thousands of dollars lying around and would not go into debt, I feel she should do some classes and make some sales before ordering inventory - and even then, not to go overboard.

    I have a friend that came in with $10,000 in inventory. She had the money - no debt - but I still think it was not a good idea.

    This lady is a SUPER salesperson. She can run circles around me as far as sales go, and I still don't think it was a good idea.

    ReplyDelete
  17. I'm with MK4ME - I would rather have a consultant come in and consistently place smaller aroders (because she is SELLING and needs to restock) than have her come in with a Star order and possibly get frustrated.

    Again, JMHO.

    ReplyDelete
  18. Another thing to notice about the consultant who called in to DR's show:

    Unless I totally missed something, he didn't say to send all of the inventory back. She didn't WANT to send it back. Her husband didn't want her to send it back.

    She is making sales. She was just asking about "selling through her stock," not sending it back to MKC.

    Big difference.

    ReplyDelete
  19. I just don't see any reason to risk it. Why order so much at one time? To save the $8 shipping charge? If you have enough money to order thousands, then the shipping charge shouldn't bother you. We can order and get it in less than a week. Take advantage of that. Storage space is something to think about, too. Where do you PUT thousands of dollars worth of product?? And why would you want that much around the house, anyway?

    ReplyDelete
  20. Victoria,

    This lady has a HUGE house (Hubby has a GREAT job) and a whole ROOM just for her MK stuff.

    She sells a lot - no doubt about it - but she also orders to replenish her stock every month, too. She KEEPS $10,000 in inventory on hand at all times.

    ReplyDelete
  21. I appreciate this discussion as I am a MK newbie trying to figure out how much inventory to carry. Personally, I took orders from friends and family for about a week prior to placing my first order. My recruiter helped me place my first order based on those initial orders, what I wanted for personal use and a little more to help build an inventory. Total order was $600 wholesale. Other than being told what bonuses were given for initial orders, I was never presured to buy more.

    After selling most of my inital order, I did decide to place a larger order ($1200 wholesale) because I found that it was easier to hand over the product when an order was placed. I have a toddler at home and running stuff all over town isn't always an option.

    Mostly, I'm stocking skin care basics and just ordered a limited amout of the new mineral colors since most of my customers are new to MK.

    Personally, as a customer, I never wanted to wait more than a couple days for items, so it's hard for me to ask my customers to do the same.

    ReplyDelete
  22. Hey, Newbie!

    I can see the benefit of being able to hand over products, like you said. I also have four kiddos, so delivering product isn't always a great option. LOL

    I will probably never have a lot of glamour products in stock. I plan on having stock of skin care, but I will probably place glamour orders as I sell things.

    If I am doing lots of Color Classes (as opposed to a skin care class), I might have some glamour items that are "cash and carry," but I will cross that bridge when I come to it.

    Glad to see you posting! :D

    ReplyDelete
  23. PS - FWIW - Newbie, I think the $1200 inventory is reasonable for someone who is selling product. Seems like it is working well for you.

    WTG!

    :D

    ReplyDelete
  24. mkshay,

    Thanks! I figured if I can't sell $1200 of product within the next couple of years (3 year shelf life) then it's probably not for me.

    ReplyDelete
  25. the beauty of this business is that you can do what works for you, there is no hard and fast rule. Just dont let anyone force you into starting with more than your are comfortable with

    ReplyDelete
  26. Newbie--your plan sounds like my plan. I started with $1200. I was going to do $600, but gave myself some credit and decided I would probably sell right through that. ;) In retrospect, I think I may have started a little too high, but I can't say I regret it.

    ReplyDelete
  27. From experience between $600 - $1200 seems to be a great starting place. Now with the client base I have and the fact they don't want to wait for it I have built to $10,000 wholesale (and it is TOTAL paid for not one penny is on credit). And I move it because I have clients that use all the lines. I can sometimes go thru 20 3-1 cleansers in a week, how would I pick out who should wait and who shouldn't.

    I do a quarterly open house in the city I moved from. I do a Friday and a Saturday. I bring my products to my old hometown and invite my clients. I usually sell and they leave with $2000 - $3000 in those 2 days. Can you imagine the money I save by having it there because I don't have to drive to deliver or mail and they love it and tend to buy more because they can see everything.

    So even if I believe you should start smart, I still believe you should build to where you operate a smart business and I do not believe this is done with no inventory. Many, many of my clients are last minute, "oh I almost out"! If I want something,that is consumable, I really do not want to wait. It isn't like jewlery or tupperware, that I might not need, like I need to wash my face.

    Starting a consultant with $4000 inventory to me is still not to anyone's benefit except someone that is looking at a large commission all at once. (JMHO)

    ReplyDelete
  28. I'm 8 months in with 2 team members, and I began with an $1800 order. It was perfect for me and I sold it rather quickly. I only restock the amount I sell, so I still only have about that same amount on the shelves.

    I've been told that I don't have a "full store" and am not at "profit level". Well, I beg to differ. I take 50% and restock, I use 10% to purchase sales tools, and I certainly do keep a 40% profit.

    I know there is teaching out there that says you should pour every sale back into purchasing inventory until you have a full store, but I completely disagree with this.

    I've been very careful with color and only have two eye colors, three blushes, 2 loose powders, and 2 pressed powders left of the "old" variety, and stay VERY well stocked on skin care.

    I like to think I'm saavy. I've done this and have still been a "star" every quarter (I like a carrot).

    I didn't pressure either of my team members to come in large. One came in at $600 and blew through it quickly. The other debated for 3 weeks as to what to do, took orders, decided that losing out on her free "look" was ok, but did end up doing an $1800.

    I do think it's nice to have something on the shelves in the beginning to at least have something to show other than the catalog - but even an $1800 isn't totally necessary, even though that was the choice I made.

    ReplyDelete
  29. Wow! I love hearing the different points of view.

    Okay, everyone -

    Have the changes in the color line affected how you stock inventory?

    Has it made you change how much you stock?

    What advice would you give someone that came in with a big inventory order and is having trouble moving it?

    Since someone loses 10% if they send their product back to the company, what advice would you give someone if they were thinking of leaving MK as an alternative to sending everything back?

    Do you think sending everything back is sometimes the best alternative?

    ReplyDelete
  30. mkshay, you ask very good questions...

    Have the changes in the color line affected how you stock inventory? Has it made you change how much you stock?

    Absolutey, YES. When I found out a year ago that the colours were changing, I just about had a heart attack....I had $3500 in products that were going to be changing. I know others with way more than that too. I will NOT stock colours now until after I have seen a year of sales. Then I'll run my report and it will tell me what colours/products I have sold.


    What advice would you give someone that came in with a big inventory order and is having trouble moving it?

    Have a sale...last year I had a half price spring sale with all my customers for all the products that would be changing. Then in the fall, I had another half price sale for all the products.

    I don't recommned liquidators because it's hardly worth it. It's less than 25% of what you paid wholesale...if they'll take the products at all. They are being inundated with products as well. Very last resort.

    I also do not recommend eBay...it's flooded with products and you'll never get nearly the money you should from it. It's likely better than a liquidator but not much and you can't use your name because it violates your MK agreement and you can be terminated.

    In Canada there is a group of us trying to band together to do something positive...a big Product Give Away. We anonymously pitched the idea to MKC to which they completely shot down. The idea was to get some space, have tables and all the MK sales people band together with their discontinued colours, send press releases to the media, charge $5 to $10 at the door, collect names and hand out catalogues. The people coming in, could take what ever product they wanted from who ever. But receipts had to be made up because we could write it off on our taxes. We'd divide up the money from the door. Divide up the names and potentially have new customers. We asked MK to do nothing but approve our idea. We will move forward but differntly as we are not being supported by them.

    Since someone loses 10% if they send their product back to the company, what advice would you give someone if they were thinking of leaving MK as an alternative to sending everything back?

    If they wanted to remain in MK, they can't send the products back. Find other consultants to trade with or have a sale to move your inventory. Ask your best customers to hold an open house or invite a few people over for an MK overview of the products.

    If they want to stay in MK but can't because of the debt, they have no other choice. Perhaps they could get a lower interest rate.

    Do you think sending everything back is sometimes the best alternative?

    For some people yes, especially if they came in with huge inventories. The debt is debilitating and can make you sick.

    Just my two cents.

    :)

    ReplyDelete
  31. Have the changes in the color line affected how you stock inventory?

    I sell mostly skin care. The new color options will not affect how I stock inventory. Basically, when it comes to the glamour stuff, I see what my customers order and if it's something I don't normally carry, I introduce it to my inventory by maybe ordering 2 the first time I get an order for it. This typically happens with eye colors, blushes, and liners.
    If I see a trend in my sales moving to the mineral makeup, I will keep some in stock, but honestly, I have never sold much color.


    Has it made you change how much you stock?

    Nope. :) Right now, I'm not even stocking it. I have ordered my own personal supply and I have ordered samples. I often take orders for brand new products and once I see how much is selling, I keep a little in stock so they don't have to wait the next time. My customers are understanding. They are often surprised when I have things on hand. I believe this is due to how other DS companies operate. They presume MK is the same.

    What advice would you give someone that came in with a big inventory order and is having trouble moving it?

    Whenever I have trouble moving something I have a sale. I do buy one get one, or just discount it. The way I see it, since I pay 50% of the cost, I can discount as low as 40% off and still profit. I typically discount between 10-25% depending on the reason. For example, I do birthday month discounts of 25%. I may do a huge clearance of the old color stuff, though. I am probably going to mark that down to 40%. I think selling it even at a discount is good because it gets the product to someone. When they want to reorder it, they will pay full price if they love it. If they don't want to pay full price, offer incentive (book them).
    If someone is struggling, it is best to get an assessment of what they are doing. Look for things she is not doing. Is she holding appointments? Is she handing out Look Books? Is she following up with customers? If she is doing these things and is still not moving product she may need to look at the client base she is keeping. Finally, the best thing to ask is "Do you WANT to sell this?" Maybe she isn't into it. Then it becomes a decision whether to use the buy back option.


    Since someone loses 10% if they send their product back to the company, what advice would you give someone if they were thinking of leaving MK as an alternative to sending everything back?

    First, I look at what they have sold. If they have been selling steadily, I would encourage them to try to sell off what they can. Even if they discount it to 50% off, they will break even rather than lose money. If they really hate selling and just don't want to do this, I ask them if they think they never want to sell it again. If they answer yes, they never want to do this again, then they are probably best off doing the buy back. I do think a 50% sale (or even 40%) can be a better option as they can break even or even profit somewhat. It ultimately comes down to the consultant's decision, but she should have some options available.

    Do you think sending everything back is sometimes the best alternative?

    Yes. I think if someone absolutely hates doing this and has a ton of inventory that isn't moving, the buy back is the best option. If she makes the decision to quit early, I may suggest she sell as much as she can within say, 6 months and minimize the loss by sending less back. Ultimately, if MK is a bad fit and the person is unhappy, she may feel more closure by sending it all back. It's like it clears her from it all.

    ReplyDelete
  32. Oh yea, btw, great questions, Shay!

    Love4MK--you're doing a great job in your business! Awesome story! And it sounds like you have a strong team, too. ;)

    LookingForAnswers--I think we were writing our responses at the same time. ;) I hadn't even thought about liquidators and ebay. I agree, though. Those are good as a last resort. If someone wants to go that route, they should first sell as much as they can while still under contract with MK. Then, if they do the buyback, and there is still product that could not go back (as in, it was purchased more than a year prior), then ebay or a liquidator may be the way to go--after contract termination. ;)

    ReplyDelete
  33. Got some ideas, but will have to get back to you later tonight!

    ReplyDelete
  34. lookingforanswers,
    I like the idea of the big product give away, sounds intresting. Charging admission at the door sounds good and taking names to get prospects is a great idea as well
    I wonder if in the US we could do something like that, let us know how it goes!

    ReplyDelete
  35. Glad you like the questions, Ladies!

    I am trying to do more to get conversations and debates going, rather than just having me spout off. Blah blah blah. LOL

    ;)

    ReplyDelete
  36. eversleigh said:

    "I am sure not all of the recruiters in this Godly company are frontloading, but enough are that even this "Balanced Mary Kay" site is talking about it."


    This IS the "Balanced Mary Kay" site. It is NOT simply a pro-MK site. There is good and bad in EVERY company, and MK is no exception.

    Healthy debate on both sides of the MK issues have ALWAYS been welcome here. Personal attacks and the like have not.

    I encourage you to keep coming back and sharing your views. :o)

    ReplyDelete
  37. Lookingforanswers, that sounds like a really inventive idea! Keep us posted as to how it goes.

    :o)

    ReplyDelete
  38. I have been reading here for quite a while and this site comes off to me as a pro MK site. Nothing wrong with that. But there doesn't seem to be many anti MKers here.

    I have read where pro MKers agree that there are some things wrong, but they then protest all the good, like that covers over the wrong.

    I know that consultants are not "employed" by corporate, but I find it hard to believe that MKC does not know what is going on with all the frontloading and buying dictatorship. And if they DO know and choose not to do anything . . . I just can't get excited about that kind of company.

    ReplyDelete
  39. For those of you who say you don't stock much color, what do you do when someone places a small color order that you don't have (e.g., one blush)? The shipping cost would be more than your profit. Or do you make the customer wait until you have more orders from other customers - which could be several days/weeks - especially for a new consultant who might not have $100s of orders coming in each week.

    ReplyDelete
  40. Newbie -

    So far, I have told my customers (mostly family and friends) that I am placing an order on a certain date (once a month) and I will gather up orders until that date.

    However, as things pick up, I will up that to twice a month and then also build some inventory.

    ReplyDelete
  41. eversleigh -

    I will admit that this site has (especially of late) been coming across as purely a pro-MK site. :o)

    I am trying to change that (with David's blessing) and trying to present a more balanced view. (Although it can be hard because I love MK.)

    Having an anti-MK point of view is fine, but there is a difference between debating and being either argumentative or personal in comments (which has happened in the past on this site).

    I am glad you are here! I hope you keep posting. You bring up some very good questions and points! :D

    ReplyDelete
  42. eversleigh -

    I really think the issue is in how it (initial inventory) is presented.

    If the Director tells people that it is their choice but suggests a high inventory order, then I suppose MKC views that differently than a Director saying a high inventory order is required.

    Hmmmmmmmmmmmmmmm.....I think would make a good post for a topic. :o)

    ReplyDelete
  43. i know we are told not to do this but sometimes you must, but I have traded a product before I order just one, or there have been times that I have referred a customer to another consultant for that one item for a one time sale so that the customer wont have to wait.

    But most times I have enough activity to where I can order at least once a month, so if someone wants an eyeshadow or a blush or something I tell them when I am going to be ordering and they get their money to me by then.

    There is a young lady right now who wants two colors that I dont have in stock. I let her know that I will put it on the order going out next week. She is a good customer so I know she will wait for me. Plus she is going to pay me in advance which sort of motivates people to wait since they have already paid

    ReplyDelete
  44. foreverpink & mkshay, thanks for your support.

    At this point the company won't deal with us because we won't reveal who we are - we don't want to be terminated.

    I do say though that it was brought to the attention of the President and VP of MK Canada so they heard us.

    The group just wishes that we could get the word out more and push it a bit harder.

    We are going to continue our efforts. It may take us a few months to get it worked out but we're hopeful in the group that it will work.

    BTW, thanks for having a really good place to talk. It's really nice to be able to come and read and talk about a "balanced MK life".

    :)

    ReplyDelete
  45. Newbie--if I need something small in a pinch, I ask my director or other consultants for a trade. I have a couple customers who go through their stuff faster than I can reorder it! I place orders regularly so I can replace it quickly. Sometimes, my customers actually tell me they are low, but not out. This buys me some time so I can just wait for my order to arrive.

    ReplyDelete
  46. lookingforanswers -

    You will find this is a great place for discussion about MK - as long as people keep it civil. LOL

    Glad you are here!

    ReplyDelete
  47. I didn’t want to comment on this until I had the opportunity to listen to Dave Ramsey’s comments. I’ve read the comments above, so I know that the thread has morphed a little. I have some experience as a line manager and then as a demand manager in implementing a Just-in-Time (JIT)/Kanban/Lean Manufacturing environment at a major equipment manufacturer. I like Dave Ramsey. I think that he has got it right in his efforts to get people out of the debt cycle. Unfortunately, this time I think Dave got it wrong, or more specifically, got it backwards in his discussion of JIT and applying it to a consultant’s Mary Kay store.

    Here’s what I heard about Tara’s situation: She placed $4700 dollars on a VISA card in August, of which $3600 was wholesale product. Because she ordered that amount, she received approximately $600 in retail bonus, and paid $530 in sales tax (6.8% in SLC). That sales tax will be recouped as she makes sales, but then reused as she reorders her stock, so it washes out. Although Tara stated that she had spent the $1100 dollars over the order for MK luggage (I assume she meant product cases from MK Connections) and other business supplies, I think the real number is about $560. She stated that she had sold approximately $1800 in retail. There are two big unknowns in this analysis. The first is how long Tara has been in business. She said that she started in August, but we don’t know when she called into Dave’s show. The second is whether she has been selling the product at MSRP or discounting it. For the purposes of this analysis, I’m going to assume that she’s been selling for 6 months (aka $300/month in retail sales), and that after product/hostess gifts, her effective discount rate is 10%.

    At an interest rate of 18% per year, computed daily, her first month’s finance charge was about $75. If she is paying more than that each month, her principal will go down and so will her monthly finance charge. I don’t know what her goal to pay off the credit card was, but if it was to do so in 1 year, then she needs to be paying about $435 each month. If she is replacing her inventory, using 10% of her sales for new supplies, and losing 10% in effective discounts, then she needs to be selling about $1450 in MSRP retail each month. If she is only selling $300 MSRP per month, and restocking her inventory, etc, then she only has about $90 left over to pay the credit card each month, not counting gas money. No wonder her husband thinks she has too much inventory. They have other debt issues and this isn’t helping. This is where the assumptions have a big effect. If her expectation was to pay off the credit card in two years, then her minimum monthly payment goes down. I also haven’t factored in any tax advantages or how much of her bonus product she has been able to sell.

    In general, I’d say that her sales are not enough and that she has to make some decisions. In particular, how much stock can she sell down and not replace, and how can she get her monthly sales up. I think that Tara’s basic problems are that she either (a) purchased more inventory than her sales support, for whatever reason, or (b) planned to do more sales and is not doing it. Interestingly, I took a look at the Ready, Set, Sell inventory worksheet, and Mary Kay recommends 13 points or more for a $3,600 initial order. Under “Desired Monthly Earnings”, $1,200+ in monthly gross sales is the top choice and is equal to 4 points. I don’t think a person should be even thinking about a $3,600 order unless she checked that line.

    I also think that Tara spent about $200 more on “other stuff” than she needed to, although that’s a pretty minor point. $200 is less than 5% of $4700. My wife recommends that a consultant not spend more than 5-10% of her wholesale total on the initial order on section 2 items, and never suggests buying the product cases right away. The only MK Connections items that she recommends are a business kit (cards, name tag, etc) and a beauty coat, plus getting a MK website ($25 for the 1st year, $50/yr afterwards) and signing up for ProPay ($39/yr) to be able to clear credit cards.

    So where did Dave Ramsey go south. It’s in his discussion of JIT. He mentions big manufacturing companies. Then he suggests keeping the fastest moving stock in hand and only ordering the other products as customers place orders. As Shay already noted, JIT doesn’t work if you want to have products on the shelf, even just one, for your customers. You have to be able to forecast the demand, Contrary to Dave’s suggestion, the easiest material to forecast is the fastest moving stuff. The infrequently ordered and “custom” stuff can’t be forecasted without a huge statistical input (basically at Mary Kay’s warehouse level). In the company I worked for, the easiest stuff to put on a JIT schedule and then a kanban system were common parts (nuts, bolts, gaskets, chassis, etc) that were used across multiple versions of the equipment. The stuff that couldn’t be forecasted reliably was the customer-specific special requests. Because of that, the best we could chew our time from order receipt to shipment down to was about 8 weeks, but that was okay because the customers never expected the item to be sitting in the warehouse ready for shipment. (Except for repair parts, and those were stocked at depots close to the customer sites for our technicians. In fact, a repair depot is a much better analogy to a consultant’s store than the manufacturing line. The customer wants his $5 million dollar machine fixed, and he wants it fixed yesterday!) Good examples of items that could be ordered using small, more-frequent (i.e. weekly) orders are Oil-Free Eye Makeup Remover and TimeWise skin care, but to forecast the demand a consultant has to have some sort of sales history.

    A better analogy to a consultant’s Mary Kay store is an office supply store. Some stuff, like copy paper and pens move real fast. If you don’t have it on the shelf, the customer will go somewhere else. Some stuff, like fancy hole punches or binding equipment, can be ordered as it is sold. Maybe you keep one or two basic office chairs, but if the customer wants a fancy leather executive chair, that has to be ordered (and paid for in advance). The difference between the office supply store and a consultant’s store is that the office supply store probably has minimum order sizes. They may be able to order just one paper cutter, either due to quantity or total wholesale order cost minimums. Their drop-ship fees might also eat them up, while MK’s is a flat $8.75. I’ve seen consultants run their store many different ways. I’ve seen them order once a month and I’ve seen them order $100-200 every week. It all comes down to how fast your stock is turning over, how much stock you want to have on your shelf, your desired level of service (are you and your customers okay with something being out of stock for a short period of time?), how much time you want to spend tracking your inventory each day or each week, and lastly, how much of your capital you want or can you afford to have tied up in inventory.

    Here are two simple discussions of JIT and Kanban: http://www.graphicproducts.com/tutorials/kanban/index.php and http://www.epa.gov/lean/thinking/kanban.htm . You can find more by googling “Just in time kanban”.

    ReplyDelete
  48. The problem I have is not inventory, but INITIAL inventory. Once you run thru your friends and family and get down to business, you do not know how much you will be selling. Why order that much INITIALLY? Why not wait? To save $8.75? To get some free product that you may or may not be able to sell? Whatever you get free will not help you if you can't sell it.

    ReplyDelete
  49. No small business knows what their sales will be. Everything will be an educated guess, and a lot depends on the attitude and activity of the owner.

    For example, let's say that you are going to open a small clothing store. You can forecast (aka guess) your weekly/monthly sales. You'll probably have to do that in the form of a business plan if you want to get a loan from a bank (which is why, before the current tightening of credit, a lot of small business owners were using creidt cards. You don't have to bow and scrape before some 20- or 30- something "loan manager".)

    MK provides a guide to how much initial inventory you may need. It's a GUIDE. There is no way it can be perfect, and no way it can address every person's individual situation.

    The consultant orders what she is comfortable with ordering. I've seen new consultants come in with everything from nothing to $3000. I've seen new consultants come in with $$ in their eyes, a $1800 order and then do nothing or next-to-nothing. I've seen consultants come in with a $200 or $600 order, and need to reorder in a week or two.

    By the way, my wife had no "family" sales when she started 22 years ago, and only recently gained her future sister-in-law as a customer. My mother is not a customer and her mother was a consultant (and became and still is a director). There are no sisters on either side of our family.

    So what a consultant does is very much up to the consultant. unfortunately, there is no test or evaluation that can tell how well someone will do as a salesperson.

    Another BTW, my understanding is that Mary Kay had the 90% buy back guarantee BEFORE the DSA, and that MK was one of (or the) prime movers in getting the 90% buyback guarantee into the DSA's code of ethics. Around the same time, several states were passing laws requiring such a guarantee. I found this link showing the DSA's code of ethics from 1981: http://216.47.150.240/departments/csep/codes/coe/direct.selling.assoc.1981.html

    ReplyDelete
  50. Continuing my previous post ...

    When you look at that link, it has links to other versions of the DSA's code of ethics. In reading the 2001 version, there are italicized comments. The italicized comments under 7b make it sound to me that there was a 1998 amendment that discussed the buy-back guarantee. Without further information, it would appear to me that the DSA added the buy-back language sometime between 1988 and 1998. IIT's library may not be complete with all versions of the DSA's code of ethics.

    ReplyDelete
  51. It looks like the link got cut off:

    http://ethics.iit.edu/codes/coe
    /direct.selling.assoc.1981.html

    ReplyDelete
  52. MK Honesty--I believe you are right and Mary Kay employed the 90% buyback before the DSA required it. Is Mary Kay, Inc. older than the DSA? In any case, I'm pretty sure this info is in Mary Kay's autobiography and also in Mary Kay on People Management. ;)

    ReplyDelete
  53. P.S. I've read both books.

    ReplyDelete
  54. The history of the DSA can be found on its history page (duh):
    http://www.dsa.org/about/history/

    ReplyDelete
  55. Thanks for the reference! I'm not sure, but Mary Kay, Inc. may have had some influence during this period:

    "In 1968, a final reorganization gave the association its current name, the Direct Selling Association, and the headquarters moved to Washington, D.C., where it has remained since.

    "Today, DSA operates from its D.C. headquarters which it shares with the Direct Selling Education Foundation and the secretariat of the World Federation of Direct Selling Associations. DSA provides educational opportunities for direct selling professionals and works with Congress, numerous government agencies, consumer protection organizations and others on behalf of its member companies."


    It's in Mary Kay's autobiography somewhere. I'll have to take a look this weekend. I know I read it somewhere (I read everything when I first joined).

    ReplyDelete
  56. mkhonesty, I love your posts. :D

    ReplyDelete
  57. eversleigh -

    I have issues with the initial inventory as well. I think it is difficult for someone to use her crystal ball and determine how much she is going to need to start with.

    I, personally, would rather have a consultant order a smaller starting inventory and sell through it quickly than get a larger inventory and have it sitting on the shelf. That's just me. I think if a consultant has the initial success in selling through their inventory and has to reorder, it can be a great encouragement to her.

    I really think that initial inventories is where a lot of people get tripped up. This is JMO, but is based on things I read on other sites and message boards.

    I would rather have a consultant have small successes in the beginning and gain confidence that way.

    ReplyDelete
  58. I put a post on this morning here but it went off into oblivion so I’ll try again...

    I agree with Eversleigh and MKShay about the problem being about the INITIAL inventory. Once you get going slowly build that inventory and after a year of consistently selling or sooner for some, you’ll see exactly what you need to keep in stock.

    MKHonesty, you obviously do your research and have experience where others may not. My husband also worked for a company that implemented lean manufacturing while he was there and they had Kaizen days. It was fascinating at how greatly it improved production but it took some folks some time getting used to a new process. The company he works for now encourages Six Sigma training.

    http://en.wikipedia.org/wiki/Lean_manufacturing

    Although I see your point about JIT ordering and being backwards the way it was explain by DR.

    The point I took from it, is that we as consultants do not need to have the entire inventory on our shelves as MKC has it on their shelves for us. It does make sense for limited edition items and new items that you’ve never sold before. Once you have a customer base and have re-orders within 3 to 6 months, then you start to have some items on your shelf for when your customers re-order it.

    A good software program will be valuable. You can set it up so that it creates an order when your inventory gets down to the minimums that you have set. This is what stores do. Every time someone goes through the cash at a department store, their computer system subtracts it from their inventory and adds it to an order. Whether they order on a daily, weekly, monthly schedule is likely determined by how quickly the stock is rotated.

    Yes the 90% option is great and even better if Mary Kay herself had input to its development (which I believe she did), however, if you don’t want to leave MK but just reduce your initial inventory decision, there is no outlet for that.

    Yes the inventory Guide you mention is to be used, but the Director will spin the information which ever she needs it to spin. The Director is to provide the facts....all of them and they do not. They will strongly recommend the biggest packages because it determines the size of their commission cheque. The inventory discussion is meant to be leading. Yes it ultimately is up to the new consultant to make that decision but they make their decision on trust and on the information they are provided. They trust that the Director is guiding her to be successful. Not to be just another number to make production. We have a Director in Canada who is known in our city for telling potential new consultants that they need $6000 to start. She has been doing this for years and she’s been around forever.

    I have been with MK for nearly 20 years and yes did some time as a Director. I know what’s required each and every month to meet production. I know it’s all about the numbers.

    I would trade all the consultants who came in with $4500 inventory orders for more of them coming in with $600 orders...at least they’d still be in MK and not having to choose the 90% because they were unable to move that amount of product.

    Let me put it this way, if you had 10 new consultants coming in with $600 w/s in orders after they’ve completed their Perfect Start, that’s $6000. It more than meets production.

    There’s not a Director alive who wouldn’t take a unit like that. Since the new 10 consultants are under no pressure financially, they keep repeating the process and let’s say a total of 10 new consultants come from that for the next month and they each do $600 w/s in orders. Plus the original 10 doing another $600 in w/s orders. Can you say $12000 production?

    And let’s say it continues to happen again for a third month – 10 original placing another $600 in orders plus their 10 placing $600 plus their 10 placing $600...$18,000 in production. Plus the original 10 will be on their ladder, earning prizes and feeling that yes this business can work. And they are not in debt.

    They are positive about the experience and that spreads to the people that they meet who will order and recruit because of this.

    Starting off small and ordering just what your selling, will prevent you from having a Fuchsia lipstick sit on your shelf from the early 90’s like I did and eventually throwing it out because I had to have a full store to be prepared for any type of sale.

    MK is supposed to be a different kind of company – without a huge investment and that your breakeven point is to be quicker thus getting you to profit sooner. Profit = Positive.

    Just my two cents.

    :)

    ReplyDelete
  59. Looking for answers you stated it PERFECTLY!! I have found that the directors who have a STRONG foundation are those who get consultants to place between 200-1000 orders and they sell out and buy more and it teaches them how to turn over their inventory and have they have stronger offspring and stronger units!!!! A lot of them are not TOP directors but their commission checks are between 2500-5000.00 a month consistently!!!!

    ReplyDelete
  60. LookingForAnswers -- We've used Blvd for years, and it has a simple "minimum stock level" ability for each item. I would like it to have a low-limit (i.e. don't order until the quantity gets to this level) along with the minimum stock level setting.

    The problems with implementing a real stock ordering program for an individual consultant are:
    1. Not enough volume across the entire product line to forecast future demand accurately. In other words, the demand is too "spiky" at the individual item level.

    2. If you try to smooth the spikes, you are going to have to accept that sometimes you might be out of something. If you try to raise the stocking levels, then you are tying up too much capital (and perhaps debt) in inventory.

    3. Because a consultant does not want to place an order every day to fill what the computer is telling her to order (which is what a daily-batch MRP system does), she has to determine how much stock to have on the shelf so that she can place her orders weekly, bi-weekly or monthly, and not be out of stock on a lot of items by the time it comes to place her order. She also has to allow for the time it takes for her order to get to her doorstep, which varies by the time of the month unless you live w/i an hour of a distribution center and can pick up your order. MK also creates an incentive to order certain amounts with the Biz Builder bonus program. The consultant also doesn't want to be repeatedly spending $8.75 (or a lot more if you live in AK, HI, PR or Guam) in shipping costs.

    You have to be careful about using Wikipedia as a source, but this time it has a good description of MRP, MRP II and ERP that will leave 99.9% of consultants with a deer-in-the-headlights look. (It's hard to get a biased discussion about something so dry.) Even at the large, high-volume manufacturing level, there is no perfect solution and compromises have to be made.

    ReplyDelete
  61. MKHonesty,

    I too use BLVD (wasn't sure if I was allowed to name it) and I love the fact that I can print a report to tell me which products I've sold in what month and the quantity.

    Certainly I wouldn't expect a consultant to order daily, even weekly. I prefer to order monthly but I've got my systems down pretty good. Yes, I have been caught with not having a regular item on the shelf OFEMR for example...

    It really depends on how much you're selling and how quickly you rotate stock. If I had BLVD sooner (only got it a couple of years ago), I would have the report in front of me that I didn't need to have two Brick cheek colours on in my stock as I never sold one.

    Yes, Wikipedia isn't necessarily the most reliable, I agree but it is generally fairly detailed with lots of other reference links.

    MRP, etc...dry for sure...

    Your posts are great by the way (I'm just the devils advocate) and with all the information being provided here, it can only be helpful for anyone reading.

    ReplyDelete
  62. looking for answers, I have been a director for almost 14 years, I have never had a consultant come in with more than $1800 (ever). Almost all of my unit starts between $200 - $1200 and the majority start with $600. There are many of us directors that can share the facts and not go for the "big kill". I would MUCH rather have a consistantly ordering consultant than one that is scared to death because of the product sitting on her shelf with a big payment every month.

    Normally 80-90% of my unit's production comes from current unit members (NOT NEW production). I have had unit members with me since before I became a director because they can grow there business in their time frame.

    I don't call for orders the last day of the month and guess what, because I don't if I happen to call a consultant on the last day of the month for something, she isn't afraid to answer the phone!

    I have made very few (small) coop payments on the cars and I have earned 7 of them. (I usually take the cash anyway).

    So needless to say, I took offense reading your post, like it or not there are directors that are ethical - if I treat others as I would like to be treated, it will be returned and it has. Mary Kay also taught us to help others acheive what they want and you will in return achieve what you want. This is so true.

    If as a director you do this right from the start you don't have to worry about the big kill because you have a selling unit that is consistantly putting in orders. Because of this thinking, I don't have to worry about chargebacks either, because no consultant is facing overwhelming debt if she doesn't get out of the starting gate fast enough or MK doesn't work for her.

    I might not be a million dollar director but dog gone it, I will be the best director I can be and proud of how I conduct myself and represent this Company. And as I lead by example my unit members will hopefully follow my example. And I am not afraid to speak out if I see things being down unethically.

    ReplyDelete
  63. mk4me and all,

    No offense was meant in my post. As with everyone else here, I am voicing my opinion and what I see and what I have experienced in my MK career.

    Yes there are directors who are ethical, I do not dispute that.

    There are many that are not and that's why there are these blogs. To give a voice to the ones being silenced about what is happening in the unethical units/areas.

    If all the units/areas were like yours, there would not be an issue.

    ReplyDelete
  64. lookingforanswers -

    I thank you for voicing your opinion and experience!

    That is what this blog is for! :o)

    ReplyDelete
  65. I have very thin skin, and having read many of the other blogs, esp. one, they would just love to believe there is not an ethical director in the bunch. So if I get a little defensive, it is because I know there are as many good ones as bad ones but just like anything else - the squeaky wheel gets the oil. I have seen pro mk sites, I have seen anti -mk sites, we have this one that is a light off balance but that is only because we need more that have issues to speak out.

    The blog I have never seen, and don't plan on starting is a blog where.... "my director is one of the ethical ones." Posts would feature, she goes over inventory with the agreement and then again when it is decision time. She shows all the levels and shares pros and cons (low keyed) - allows the consultant to decide without pressure. She works with her unit no matter what level of inventory they start with. She doesn't pit one unit member against another.
    She focuses on selling the product and building a customer base beforshe teaches them to recruit every client that they have. She praises and recognizes the consultant for acheiving her goal (even if it small) just as much as she praises the consultant that acheives her big goals- She doesn't frontload and she doesn't dial for dollars. And she tries her best to do what is right. The director that still does classes and facials, that won't challenge a consultant to do something without first doing it herself or right along with her unit.

    A director that wants the best for her people (not what's best for her).

    Oh, I guess I just probably did, now, see how boring that was. No
    wonder we don't here about the ethical ones. It is just like a car accident, everyone just has to look but the car just driving down the road obeying the speed limit isn't even noticed.

    ReplyDelete
  66. I wanted to thank all of you for your comments. My friend just got into the business and she and I have been talking for a few weeks about all of my questions in case I'm able to start as a consultant as well. Sometimes it's hard to ask a friend about business, so I'm thankful for this blog which is by no means horrendously biased on either side. Inventory really is the major decision point for me and I'm trying to work that out before I even sign the agreement. I'm very pleased to hear that starting from scratch is indeed beneficial. I don't have much at all to invest and I would almost think that the marketing aspect should come first before real inventory. In fact, my friend had the great idea to make a note to customers that you make orders on a certain day of the week, or really any kind of schedule, so they know ahead of time when to order so they can anticipate when they can get their product. For someone starting small, that sounded great just to keep communication open with customers but also so they do know when they'll get their stuff!

    I did have one question, though, for the time being; I'm to understand that shipping is $8, correct? Is that based on the shipment itself or is it based on weight/quantity? In other words, can shipping be more or less than $8 or is it always $8 for every order?

    Again, I really appreciate this blog now that I've found it! Thank you!

    ReplyDelete
  67. hi martha, welcome. Shipping is $8.75 on an order. Whether it is a $200 wholesale or a $1200 wholesale. It is one flat fee.

    The only thing with "planning" orders like that is many clients don't schedule when they run out of products and often want it yesterday. There will be clients who may look for a consultant because they prefer not to wait, then again, they may be happy with you and not mind the wait.

    I think a little inventory is still better than none, but that is jmho.

    ReplyDelete
  68. Thank you for sharing valuable information. Nice post. I  am very impressed to read this post. The whole blog is very nice I found some information here Thanks..Also visit my site Wholesale closeout sales The Closeout Club offering huge savings on merchandise at wholesale and below wholesale prices.














    ReplyDelete

For Further Reading...

This Week On Pink Truth - Click Here
Pros and Cons of Mary Kay - Read or Contribute or Both!
First Post - Why I Started This Blog
The Article I Wrote For ScamTypes.com (here) (there)
If this is your first visit please leave a comment here. I would love to hear from you!
If you want to email me: balancedmarykay@gmail.com
But you are probably better emailing mk4me: mk4me2@gmail.com