"My issue with mlm is that, even if you fail, it is likely someone else will have profited from your efforts."
Why is this such a bad thing? And why do people act like it is unique to MLM??
When I worked in retail, I was in management. I earned a commission on my sales, plus a commission on the sales of my team. My supervisors earned these commissions, plus bonuses for things like reaching goals, increase in sales over last year, low inventory shrinkage, etc.
My supervisors and I had quite a different point of view, and that may be due to how our checks were earned.
You see, I trained my people to ask questions and meet needs. They told my people to push the higher ticket items. Period. (This was in different types of retail - not just one store, BTW.)
Bonuses for meeting certain goals are pretty standard in any type of sales - oriented industry. Some of them will do anything to reach said goals. All in the name of profit.
Sales-oriented companies aren't going to change the way they do business and reward their employees. It is a profitable system for them, and it rewards results. They don't necessarily care how the results are achieved, either. As long as there are no laws broken or tons of customer complaints, they really don't care. (Trust me - I have been to enough "rah rah" sessions and have heard this in more than one corporate event.)
So, what does this have to do with Mary Kay?
- While IBC's are not employees, the structure that MK has in place to reward their people is not evil. Or unique. To give a percentage to an IBC or Director is not out of line.
- Abuse of the system happens. It happens in retail. It happens in MK. It happens in every business known to the free world. There are not-so-nice people everywhere. It doesn't mean the system is flawed - it means that flawed people are in the system.
- The key to getting rid of the bad apples is speaking up. I don't mean whining on a message board or blog. I mean a real, signed-with-your-name complaint to Corporate. Then follow up with it. (There is nothing wrong with wanting to know what has become of your complaint!) And keep in mind that one complaint will probably not have much effect (unless laws have clearly been violated), but a lot of complaints by different people will have an effect.
- My ex-mother-in-law has a saying that I still use to this day: "When in doubt, don't." If your Director or anyone else is telling you to do something and it feels "hinky," trust your instincts. Take some time to think about it. I can't tell you the number of times that I have had supervisors ask me to do something shady in order to boost sales or increase profit margins. It is not always easy to say, "No," when it might cost you your job (and it did, more than once), but you sleep better at night.
- Learn about the MK system. Learn how it works. Learn how you get paid - both on your sales and those of your team - and then do your business the right way. Be an example.
MK has not come up with some off-the-wall way of paying people. They have taken a system that was already in place (remember that Mary Kay was in commission sales for so many years?) and then adapted it to suit the MK company.
Thoughts? Comments?
Posts
Some may have a problem with this because chances are, if you are low on the MLM totum pole, you may not make much profit; especially in the beginning. ( I am talking a living wage, not hobby pay. I am refering to a wage that you can actually live off of, not supplemental pay. ) And you work and work and work and those above you are guiding you to work and work and work. And they are profiting from your work and you may not get much in return. In a regular job, you at least get an hourly wage or salary. You are making money, too, not just your upline. In MLM you may make some, you may lose some. Regardless, someone is making money off of you.
ReplyDeleteThere are some differences, but there are also some sales jobs that are strictly commission, as well.
ReplyDelete"My issue with mlm is that, even if you fail, it is likely someone else will have profited from your efforts."
ReplyDeleteThat's a great quote - whoever said that must be a genius.
You are, of course, quite correct to say that the same is true of a regular job.
Not even I would attempt to disagree with that point.
However, the point I didn't make is that in both mlm and a regular job the amount of money you earn is controlled to a degree and someone else is making more from your efforts than you are.
Now, to avoid that situation, the only possible alternative that I see is to be self employed in the manufacturing industry, or to be the person at the top of the pyramid, be it a network marketing pyramid or CEO of a company.
That said, if you are in mlm, or at least the wrong mlm, is it not true that you could be earning much less than minimum wage or even losing money, whilst those in your upline still profit from your efforts?
At least with a regular job more work, i.e. overtime, means that you are guaranteed to earn more money.
It may not be what you are worth but at least you know in advance how much it will be and completing those hours guarantees that you will receive that payment.
If someone could show me a mlm where I could guarantee a good wage simply because I was dedicated, put in the hours and worked hard then I would join.
However, there are too many people who do the above and invest there own money and still fail to earn.
Why is that do you think??
In response to Judi: "And you work and work and work and those above you are guiding you to work and work and work. And they are profiting from your work and you may not get much in return."
ReplyDeleteNo one gets paid A COMMISSION in MK unless someone places an order. So, if you are working your tail off and not seeing results and you don't order anything, no one gets paid. If your director is giving you her time, she's not getting paid (at least not directly) for that because it didn't produce results (YOU didn't place an order).
A director may have others on her personal team and within the unit who are selling and ordering and she does get her commission from them. But no one is "making money off you" unless you are ordering products from the company.
Scam said, "That said, if you are in mlm, or at least the wrong mlm, is it not true that you could be earning much less than minimum wage or even losing money, whilst those in your upline still profit from your efforts?"
This is true -- in the "wrong" mlm. Mary Kay is at least designed to encourage working on all levels and no one gets paid COMMISSION unless someone orders the product from Mary Kay, Inc.
I have more to say but it's crazy busy here today.
Scam -
ReplyDeleteYep, a genius! LOL
I didn't put your name to the quote because I didn't want to single you out - I have heard this type of comment before from others.
However, if you want, I can give credit in the post to your genius. ;)
I tell you it's hard work being good looking, funny AND intelligent :(
ReplyDeletelet's not forget humble, too!
ReplyDeleteNow that is the hardest part of all!
ReplyDeletePoin 1: well, for most businesses, if they weren't making some profit, they would no longer be in business, and this wouldn't be good for anyone.
ReplyDeletePoint 2: Many wait people work for below minimum wage, I am sure on an off night in a restaurant, or if they run into some lousy tippers, they leave for the night with less than minimum wage for the hours they put in, likewise on a good night, I am sure they can make much more than minimum wage.
It doesn't mean they were not doing a good job on the off nights. I am sure that there are nights they work much harder for less money than on great nights with great tippers.
Point 3:
"Scam posted: At least with a regular job more work, i.e. overtime, means that you are guaranteed to earn more money."
-hmmmm... I was salaried at my position before going fulltime with Mk, there were many weeks, I worked 60-70 hours a week, I brought home no more than if I worked 40 hours a week, now, my salary was suppose to be based on a 40 hours work week, but the only weeks I remember only working 40 hours a week, were the ones I was on vacation!
So, there are trade offs in all job opportunities, it is up to us to decide what benefits us the most. The trade off's from the conventional job may be worth not having the "guaranteed" amount on payday.
So many of us here agree, MK is a great opportunity but it is NOT for everyone, alot of people do not do well without a 9 - 5, tell me what I need to do, type position. Personally, I don't need to be micromanaged, I do what I need to do, I personally, don't want someone breathing down my neck supervising every move I make and telling me how to do it. I like being able to take the credit (0r the heat) if I don't do something well, I didn't like doing an awesome job, making loads of money for the Company and then having my boss and higher ups get all the kudos for my work.
Except for death and taxes, I havent heard of too much else that is a definite in this world. So, we all have our choices. I don't go start a blog about people who work conventional jobs because I would rather do what I do, it is my choice, just as everyone else has a choice, if you don't like MK, fine, get out, if you don't want to be part of an mlm, get out, if you want a 9-5 job, go get one. It really is quite simple.
and for all this talk about MK being a cult, ah... if you want to use the loose definition of cult to associate MK and cult, the same definition would mean that pt is also a cult, and people that have alot in common, like car racing, snowmobiling, etc... must all be in cults too.
I will close with the line my kids have been brought up with and I just love it.
God was good enough to give you a brain, now show some appreciation and USE it!
Well... I own a hair salon and the people that work for me don't make a minuim wage, they work on commission. If they do hair they get part of that and my shop gets part of that. If they want their paycheck to increase then they have to do more hair. This is the way that most salons work. There are some that are on booth rental, I don't do that because you can't make a living collecting rents. Sometimes the people will leave and you are left holding the bag if they have ordered their products and don't pay for them. So I just do commission.
ReplyDeleteWith MK you get what you work. If you don't work you don't get anything. MKC makes a profit off of what you order they have to or they could not be in business. I don't know what they make and that is really beside the point. You know to that the commissions that the directors get I don't believe that it comes out of the consultants pay..correct me if I am wrong. Anyway the way I see either do it or don't the choice is up to you but don't gripe because of this and that. Life is not fair and no one promised that it would be. You can either say oh life has treated me so bad I will just stop, or you can say life has handed me a lemon and I think I will add some sugar and make some lemonade. Like a said before life is a choice or a highway chose your path and stick to it.
I know that on pt they like to blame the big bad MK well get over it please. I see on there that tc is making a profit off of her site and she is doing the same thing that she claims MK is doing so what is up with that. You can buy her pt shirts well ok. Or you can join a mlm just click here so...there you go.
Well have a good evening.
I've read way too much on the internet from both the anti-MKers and the pro-MKers about how they just don't feel right making a profit off their friends and family so they give them a discount or sell to them at cost. Of course, the anti-MKers take it further with an attitude of how dare MK and the NSDs encourage new consultants to make a profit off their friends and relatives. Harumph.
ReplyDeleteSo, yes, apparently many do consider "profit" to be a dirty word.
IMO, they need to get over that.
Friends and family are HAPPY to help friends and family get a new business off and running. They may not be able to actually buy a great deal, but generally they can buy some. And perhaps they can provide referrals. Perhaps they can hand out business cards for the new consultant.
Judi said, "And you work and work and work and those above you are guiding you to work and work and work. And they are profiting from your work and you may not get much in return."
Shades of Pink said, "No one gets paid A COMMISSION in MK unless someone places an order. So, if you are working your tail off and not seeing results and you don't order anything, no one gets paid. If your director is giving you her time, she's not getting paid (at least not directly) for that because it didn't produce results (YOU didn't place an order)."
EXACTLY.
I'm going to use an example of a personal recruit of a director, 13% + 13% commission. 26%.
26% commission on a $600 w/s order is $156 for the director.
Sell $600 w/s, which is $1200 r/t AT retail, the consultant's profit is $600. (Yeah yeah yeah, I KNOW that's gross. Duh. and Yeah yeah yeah, I KNOW too that's IF she sell all of it. So don't even go there.) This is an example.
If that consultant did not sell any of that $1200 r/t (for whatever reasons), then she has no business ordering any more. Thus she won't "lose" any more and the director will NOT make any more money.
Money management taught by MK, Inc., (and it's on InTouch, too!) is that 60% of sales goes back into the business and 40% is the profit. So, no matter how much or little that consultant with the $600 w/s ($1200 r/t) sells, she needs to apply the 60/40 split.
Let's pretend she only sold $400 in her first month. $240 goes into more inventory and misc supplies. $160 is her "profit". She may decided, or even need, to use part of this for a credit card payment, business cards, whatever. BUT she really needs to minimize her expenses.
$200 w/s order, at 26% commission, is $52 for the director. While the consultant can sell it for $400 r/t. Earning the consultant $200.
IF consultants would actually USE this 60/40 money management method, they would NOT find themselves going into debt. "And they are profiting from your work and you may not get much in return" would NOT be happening. The consultant would be making money.
As for making a living wage.....
ReplyDeleteJudi said, "if you are low on the MLM totum pole, you may not make much profit; especially in the beginning. ( I am talking a living wage, not hobby pay. I am refering to a wage that you can actually live off of, not supplemental pay. )"
Note, "especially in the beginning". True. But then what business of any type makes a living wage in the beginning?
Way too many consultants expect to make a living wage right from the very beginning. They don't, so then they give up way too soon.
Please note: YES yes yes I am aware that there are supposedly those in MK who claim "executive pay for part time hours" etc yadda yadda yadda, thus leading some to believe they're gonna make a living wage right away. Well, I'm sorry about that, but it's just not true.
Someone said in a comment, "When in doubt, don't." Well, don't believe it.
Here's another one, "If it sounds too good to be true, it's probably not true." Okay, I messed that one up but you all know it.
In the beginning of one's MK business the profit margin is going to be small. Generally speaking. It takes time, effort, consistency, self-control, self-discipline, rigid money management, and patience to build a "living wage" MK business. I'll add, that it also takes a healthy dose of saying "NO" to spending your money. Saying "NO" to yourself and to other MK people.
There are always exceptions to the rule. What I have observed is that when MK people ignore the "rule" and go with they "exception", THEN they get themselves into trouble.
Stick with the information that comes from MK, Inc. Learn to tell the difference between the info that comes from the sales force and from MK, Inc. Be extremely cautious, let me repeat that - EXTREMELY CAUTIOUS - with any info that comes from the sales force.
Exactly, Rebecca. So if you need to make some real money to live off of, MK is not for you. You'll do better working a minimum wage job if you need the money now.
ReplyDeleteThe commission structure is definitely not any different in Mary Kay than anywhere else. That's why people never balk at it when presented with it the first time. It actually looks pretty good compared to what you would earn from most companies.
ReplyDeleteRebecca said, "If that consultant did not sell any of that $1200 r/t (for whatever reasons), then she has no business ordering any more. Thus she won't "lose" any more and the director will NOT make any more money."
So true. That's why I'm of the opinion to not carry inventory (or very little of it). Your money is always yours until you pay the $1 to make that other dollar you "just sold". Again, people here may not agree with that, but in my hindsight, that would've been the most lucrative way for me. Mary Kay makes way too many changes. Again, most will say every company does, blah, blah, blah. But most companies don't keep upcoming changes a secret from their resellers so that [they] can recoup what's outstanding in their warehouses in favor of their sales force eating profits of what's outstanding in their own stores. That's b.s. I don't agree with only a certain percentage of their sales force "getting" to have this information and then being told to keep it secret for a certain period of time, either. And it's at the desecration of the director to fill you in when she's "allowed". If 100% of your sales force is ordering/selling your product, then 100% deserve to know at the same time. Put it on the Corporate site so everybody finds out at the same time. After all, everybody is selling, right? Regardless of the cloth on your back, you're still providing the same service.
Judi, you raise a good point. When you're a salesperson embarking on a "new" career with [some] companies, they'll start you off with base plus commission for one year. That one year is for you to establish a client base. After that, you're working it 100% commission - which is usually increased when the base salary ceases. That's the in-between scenario of 100% commission from day one or salaried employee. Really nice for the person considering sales but has never done it before. Usually the company can absorb these sales people if they choose not to go forward with the sales aspect of their job and offer them something in-house and more "conservative".
Rebecca said: " Way too many consultants expect to make a living wage right from the very beginning. They don't, so then they give up way too soon."
That's true. But these consultants are used to working for somebody. They quickly find out what writing the pay check (your own) entails and they bail. I'd wager that a lot of these newbies probably "objected" to the Mary Kay opportunity when it was presented to them, because they weren't "the salesman type" or whatever excuse it was. But were assured they didn't have to know this or that about this 'n that. This is where the 90% buy-back is a saving grace, provided that the (majority) of their inventory still falls within a year of its purchase.
Shay said: "You see, I trained my people to ask questions and meet needs. They told my people to push the higher ticket items. Period"
Yes. This is true as well. That's why eCommerce is so successful. People can do all their product research in the comfort of their home, price compare and then have the choice to buy on-line or at a store. Yes, if they choose to purchase in person, they 'may' be subjected to aggressive/sly sales pitches, etc. But at least most consumers are armed with the right information and can buy from them or up the street.
Flybye, I agree with everything you have said.
ReplyDeleteI am also not in favor of carrying large inventory. I always remind new consultants that they can accumulate to $600 to be considered "qualified" and if it doesn't happen it is OK. Sure there are rewards for ordering $600 at once, but if it isn't realistic don't do it.
I only disagree here: "Mary Kay makes way too many changes. Again, most will say every company does, blah, blah, blah. But most companies don't keep upcoming changes a secret from their resellers so that [they] can recoup what's outstanding in their warehouses in favor of their sales force eating profits of what's outstanding in their own stores."
It has been my expereince that we are informed of changes in a timely manner. Maybe it is just the directors I work with. They always tell us when changes are coming and they tell us how to operate more like a store when selling the older products. The only rapid change I experienced was the lip gloss changes 2 or 3 years ago. They brought out a new line and then switched to nourishine and changed the colors again. I don't sell much lipstick/lip gloss as it is so I have stopped ordering it in bulk.
I like this: "I'd wager that a lot of these newbies probably "objected" to the Mary Kay opportunity when it was presented to them, because they weren't "the salesman type" or whatever excuse it was. But were assured they didn't have to know this or that about this 'n that."
I want people on my team who want to be on my team. If someone says, "I don't have time," I am not going to tell them they will have time. I have no idea if they will have time. It is very challenging to work MK around a full time job and home life. If someone wants to try it, by all means they can try it. If they are reluctant in the beginning there is no reason to tell them to try it.
This goes back to the selling. To me it's about selling. If I can't sell the products effectively, why would anyone be inclined to try it out? If they ask me about it, of course I'll give them information, but I'm not going to talk to people about the business if I'm not mastering the art of sales.
I have just recently found the PT blog, and I have been quite entertained by the postings. It seems to me that the women posting there needed more business eduction. They didn't have the "profit" they thought they deserved because their businesses were mismanaged in some way. They are misplacing blame because they don't want to blame themselves.
ReplyDeleteWhen you enter into MK or any MLM you have the choice of using the opportunity as hobby time, part time, or full time. And you should probably have that figured out BEFORE you begin and before you order inventory. Of course, the more you work, they more profit you should have, and the more inventory you should have on hand. It should not matter to you what your upline's bottom line is...only yours.
If you stop to think about it, everything you own or want to own, used or want to use has been based on a sale at one time or another. Someone has profitted from that item or service. That is how the world works. Profit is one element of business success. Another element of a successful business is proper management. And, of course, the most important part is ethical practice.
I am a MK consultant...part time. The opportunity has been successful for me. "Profit" is not a dirty word...it is the word I associate most often when I plan a trip using only the money made from my MLM. I don't know what my upline thinks about "profit". I don't care. I am responsible for my checking account and my bottom line...and only mine.
So true, anonymous. :)
ReplyDelete