Friday, June 6, 2008

The Buyback Opportunity

This is going to be a reference piece. I know the information can be found on Intouch and many other places but since it comes up quite a bit and I have noticed, that sometime one is more inclined to read a blog than training material, I thought it would make for a good info post.

One of the benefits of trying a Mary Kay Career and we do talk about it at the interview is that if Mary Kay doesn't work for you, you can return your product to the Company and receive 90% of wholesale (the cost you purchased the product for) from the Company. With this option, it makes taking a chance on Mary Kay virtually a risk free decision, where as if you find you can't sell the product, you can actually recoup most of your cost of the product.

Now, this part of the information is pretty straightforward, the misunderstanding seems to come in regarding the time period that this option is available. The buyback option is available to any consultant at anytime - it is a rolling one year window. This does not mean that you have one year from joining the Company to exercise this option. This means that you at anytime during your MK career exercise this option but the amount eligible for the buyback will be one year back from the date you return the product. I feel this is a very generous option.

Personally, I don't understand why a director or recruiter would want a consultant to think it is only available for one year because at the one year mark, a consultant that maybe joined and didn't get out of the starting gate very fast might feel that instead of taking more time to get going, they better utilize the buyback since they will loose it after that year.

From my years in MK, I have often watched a consultant not move very fast at first and am glad that at the end of a year, they didn't quit because things can change (life) and with more time, many have become quite productive consultants. If they had made that decision at the one year mark, they wouldn't have gone on to to become a great consultant. From my own experience, I did nothing for the first year and half in the Company except order my own personal items. Then somethings happened in my life and I need to make a change and I started working my business. I am very glad that nobody made me make a decision at the one year mark because I probably would have given up MK.

IMHO, it does not do any good for anyone to feel they must make a decision at the one year mark. I also admit, it seems there are even directors that don't understand the "rolling" one year window. At anytime in your Mary Kay career if you wonder how much you are eligible to return, one phone call to the repurchase department and you will have the figure.

I also feel it is counterproductive if a consultant is brought in with a large inventory and she hasn't gotten to the point she is really moving product, it does come to a do or die choice at that one year mark. That is why it is smart not to frontload a consultant. If she is building her inventory with her customer base her inventory can stay level thru her career.

Having that moving window should help all because if a consultant doesn't ever get overwhelmed with inventory, she won't use the buyback as a reaction to a crisis situation. As long as you are managing your inventory, your business can go with the ups and downs of your life. The minute a consultant gets so much inventory she can't see the light at the end of the tunnel, that is when the product goes back and often a consultant that may have had a great part/fulltime business is lost.

I have seen good consultant become "paralyzed" when there is too much product and it seems like if you MUST sell product, it is the time you are least likely too. I think the "hunger" for the sale shows more than the love of the product. When you switch into the "I need to sell" mentality instead of the show the product and "let the customer buy the product", everything just seems to go downhill.

The buyback should work as a caution to all directors/recruiters that you should encourage your unit/team members to be selling not just ordering. A consultant just ordering is going to quit and then you are going to have to deal with whatever happens aka the chargebacks.

So to me it makes sense, order product when you are selling product, don't order product to earn prizes. Provide great customer service by having what your clients order on hand but you don't need to have a year's worth of product on your shelf.

Make sound business decisions when ordering. Keep a balanced inventory, and don't get caught up in how "successful" you look, just be successful. ...And if your goal is to earn $50/week for the kiddos lunch money and that is what you are doing, you ARE successful.

Being successful doesn't mean you have to earn a car or become a director.
Success is acheiving your goal. YOUR goal, not someone else's goal for you.

10 comments:

  1. Im so glad you posted this. I have not heard of my director ever getting any chargebacks I think she may have mentioned one. I know a Caddie director (not real close friend but a friend) who told me in her five year career she has only had two chargebacks! She has a selling unit and they do 13-18,000 every month consistently.
    She only asked for orders ONCE and that was to beat a goal. I think people just dont take the time to read. Good info

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  2. very well said, great post! I hope more people read it.

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  3. I have always liked your comments...and now your posts!

    You said "order product when you are selling product, don't order product to earn prizes." So true! And I can say this because I've done both. Also, "Success is acheiving your goal."

    At one point in my MK career, I got carried away watching everyone else selling away, achieving challenges...and I was staying in the same position I had been for months. Instead of getting on my feet and selling, I started to "buy" my prizes. I'd tell myself "oh, just buy those 30 CelluShapes...you can sell them later! Those TALR? buy those too!" Well, I did. And when I finally had the product I was so embarrassed and so frustrated at having so many that I boxed them all and didn't look at them for months (and I still have some, and that was a year ago). Point is, I don't blame the company. I blame myself....what an idiot!!! lol. Since then I will NOT order something if I don't have the money set aside from my sales.

    I just realized that this has nothing to do with the buyback opp, but I just thought I'd throw it out there!

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  4. Wonderful post, mk4me. It's cool to see a director who will encourage IBCs not to buy inventory unless they need it. I often think the prizes are more detrimental than beneficial for the very reason a noni moose said--it makes others feel "less than" when they're not getting prizes and it's so easy to get them since the prizes are not based on actual sales, but only on buying wholesale.

    Anyway, sounds like you have a healthy unit.

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  5. I like the Company level prizes if you are working this as a fulltime business, when I do unit promotions, I focus on different levels of ACTIVITY not ordering and not strictly on selling. Some people just need to have the activity to get the ball rolling, if you challenge someone to hold 3 classes, they might try and not be able to make it happen but if I challenge them to make 25 phone calls, they will get some yeses and voila!!

    The other thing I do so that "everyone can be a winner" is have them beat something they have done, example their best sales month was $500, so if you increases your sales by 10%, you win, that way you can still win even if you are part time!

    That makes it fun for everyone!!

    Sometimes we will even have a contest to see who can get the most "no's" in an hour! Silly fun stuff!!

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  6. Great post!
    I sent back my inventory a year ago largely because I was feeling so much pressure because I had a lot of inventory that I never should have bought in the first place. My recruiter and director did push inventory on me a lot but like I have said before it was my choice to punch in the credit card numbers and hit send. I really think that if I had stuck with only buying what I needed and not gone for being a star consultant and buying limited edition and new products I would still be with MK.

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  7. speaking the real truthJune 6, 2008 at 7:38 PM

    It will come as no surprise that I agree with mk4me. When a woman is stressed and scared, she will usually do nothing. I have had at least one consultant, who without heavy pressure from me, did start with a larger package. When their sales did not make the payments on the card, they panicked and returned the product. Her situation really spoke to me, because if she had not had that payment, I think that she would have remained a consultant on at least some level. She is a customer of mine, so she had no hard feelings towards me.

    I have also seen the other side of the coin where consultants get frustrated when they do not have products. I am much happier when my shelves are stocked and I can hold a party or appt. and hand the clients what they want on the spot. It saves me time and money.

    I think the key is not overwhelming the individual. Some who get in debt get frightened and paralyzed, some get about selling it. It depends a lot on her personality and her life situation. A good director needs to pay attention to these things and not just suggest the same thing for everyone.

    For those who do not know, the New Consultant Ordering Options brochure (in every Starter Kit) contains a questionnaire for the consultant to complete. It asks about her goals, how many appts. she intends to hold, how much she wants to make, if she will be attending meetings, etc. Based on those answers, it recommends different packages. THIS IS COMPANY LITERATURE. Read it, the company DOES NOT recommend all consultants start with a full store. The company recommends different packages based on the individuals answers to some key questions.

    Lastly, I have often told a consultant that I did not recommend above $_______ for her. I think that the second and third orders are important, not just the first, because they indicate sales of the product.

    And mk4me, I am with you on promotions. I reward activity. It leads to results. Sometimes you may not get the results on the spot, but if you consistently put in the activity, the results will come. By rewarding activity, it shows them that it leads to results and it encourages them. Plus, others see the pattern of activity=results and I can play up on that in the meeting, rather than just saying, "Oh Susie, great you ordered a cazillion dollars worth this week". I reward sales as well, and we focus on $100 days.

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  8. speaking the real truthJune 6, 2008 at 7:39 PM

    Oh, and Colleen, I rarely have any chargebacks either and I don't have to sit around worrying about them all of the time. I do not understand why some directors put themselves in that position.

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  9. Another item that has bothered me that I have read that has happened to some on pt is a director doing an order with lots of "misc. lines" or ordering alot of stuff that is soon to be discontinued, for those that this has happened to I am sorry, this does seem like a way just to get a person to order more product. If I know for example the compacts are changing,we may order one and keep a little money set aside to order the new products when they come out.

    I do understand that doing a template order is not "time" efficient but it is "people" efficient - I work with each new consultant and design her first order with her input on what she uses and likes and then I fill in the blanks with product I know she will more than likely move and the colors that sell in our "very rural, boring" area. If I know something is being discontinued, we don't order it. I am sure many directors would disagree with me, but, it is a time for me to really get to know the new consultant and spend time with her and have her realize her success is important to me. Sometime we do it by phone other times we can do it before or after our every OTHER Monday not training (not rah rah) session.

    I have found that if I invest time in my consultant, it is a very wise investment for both of us.

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  10. speaking the real truthJune 7, 2008 at 7:10 AM

    Yes, mk4me, yes, I agree!

    I customize every single order. I take into consideration her age, geographic location, and whether she will be holding appts. or selling out of the book or a basket. Those things really affect what she will sell. Her first clients will probably be her age, and those living in different climates have different needs.

    I am up front about what is being d/c and let them know that I will be ordering them little of none of those items and that we can trade around if she needs them.

    You might get the first order by pressure, and you might get by with ordering her bogus stuff, but in the long run, you've negatively affected your relationship and her trust in you and your leadership. Not worth it to me!

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For Further Reading...

This Week On Pink Truth - Click Here
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First Post - Why I Started This Blog
The Article I Wrote For ScamTypes.com (here) (there)
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