$1800 wholesale level = $25 prize cost
$2400 wholesale level = $40 prize cost
$3000 wholesale level = $50 prize cost
$3600 wholesale level = $70 prize cost
$4800 wholesale level = $100 prize cost
$6000 wholesale level = $150 prize cost
$7800 wholesale level = $250 prize cost
$9600 wholesale level = $350 prize cost
I cannot say for sure if this is accurate or made up but it seems authentic to me.
Assuming these numbers are right, what are your thoughts?
Are these too cheap to be worth the effort of reaching those sales numbers?
Should Mary Kay award prizes that are equal in value to the amount of money you are making for them?
What are your thoughts on this?
I will allow any and all thoughts, and after some time has passed, I will weigh in!
Thanks
Posts
Something to keep in mind is that as Directors we work with Wholesalers, so for example, the real gold ring with real diamonds promotion I did for my unit was more than the recommended 4% of commission that the company recommended but far less than you could go and "buy" on the street. So, what I am trying to say is that the actual dollars spent by the Director may not reflect the actual "street value" of the prize.
ReplyDeleteSecondly, the prize should not be the reason for the activity, just the icing on the cake. Now some cakes have better icing... (I am partial to cream cheese myself). I remember as a consultant tossing many of my prizes, it was not about the prize, it was about the ACCOMPLISHMENT. Ah, but that was me....
So... does the list look right. It is actually very generous, at DIT we are taught to spend 4% of our commission on prizes (at least that is what we were taught when I went). So for an 1800 Wholesale, 13% commission would be $234 and 4% of that would be $9.36.
So... no matter how sucky the prize... I ask, when is the last time your employer gave you anything? Seriously. I have a few things from the corporate world, but not much and it was not that these items were given to everyone, but that I happened to work the marketing team a lot...
As Directors we don't *have* to offer prizes, some do... some don't... some offer great things... some offer little things... some offer some "what were they thinking" things. Some people are gifted with promotions, some are challenged. If there is something you really really want to work for, tell you Director and ask her for a specific challenge. You might just get what you are after. :)
myst,
ReplyDeleteThanks for stopping by here, I usually don't comment before I give a chance to everyone else to comment. I wanted to ask you a question of clarity though.
You used the 13% commission in your illustration. These numbers (if I understood PT correctly) was for NSD's. Do you know what their commission is? Do they make more than 13% on an IBC's orders or less or the same?
Thanks... (more later)
I got a prize every time I placed an order. Always jewelry, and I use that word loosely! They were junk, yes, but it was so exciting to get a gift! They were so extremely gaudy! I would have never have bought them for myself, but since it was a gift I felt I had to wear them to events. And I loved it! It was like being able to be someone else for a couple of hours.
ReplyDeleteAnd when I went to career conference I got a pink lips suitcase on wheels and a satin pink pillow along with yet another gaudy piece of jewelry. My friend and I wore everything we had ever gotten in MK, not much, but they are so big it looks like a lot. I have nothing but good memories of that career conference. We got a lot of laughs wondering what outsiders thought of all these nicely dressed ladies wearing enormous fake jewels!
So I vote YES for cheap prizes, they are better than nothing and keep things light.
Now that I don't go to any events I gave them all to my 6 year old. Since she remembers me wearing them she is on cloud nine to have some "REAL" jewelry.
Judi - I love your story!!! :)
ReplyDeleteDavid - Here is NSD Information from the Advance Online Brochure, the basic structure for how you are paid on your presonal team and unit is the same regardless of your position. I did not include all the bonus information (e.g. off-spring national bonus, etc.)
Compensation
Personal team commission of 4%, 9% or 13%
For the 13% personal team commission, a National Sales Director does not have any personal activity requirements, but is still required to have at least five personal team members each place minimum $200 wholesale Section 1 orders.
Sales Director personal unit volume commission of 13%
National Sales Director Commission
NSD personal unit volume commission of 10%
An NSD may elect to keep her personal unit at the time she debuts or form a personal unit at a later date in order to develop additional first-line offspring units. She will earn a 10% NSD commission on her personal unit’s wholesale volume in addition to a 13% Sales Director commission on that unit’s wholesale production.
Independent National Sales Director Commission Schedule:
Based on Combined Monthly Wholesale Purchase Volume NSD Commission
First-line offspring sales units 9%
Second-line offspring sales units 4%
Third-line offspring sales units 2%
First-line new offspring Sales Director Bonus
Bonuses will be paid for the development of Sales Directors from NSD’s personal unit according to the following schedule:
NSD Bonus
At time of offspring Sales Director’s debut $5,000
At annual anniversary of same unit’s debut when offspring Sales Director generates wholesale production of $60,000 or more within last 12 months $1,000
To be eligible for the first-line new offspring Sales Director Bonus, the NSD must have qualified to earn the first-line offspring bonus at the time of the offspring Sales Director’s debut.
I honestly don't get excited about the prizes offered by the company. It was surprising to me that I'm not prized orientend, but I'm not. I'm not moved by the prize to go out and work. Nope. I am more motivated by the quest for success. I view the prize as icing. Earlier this year, I was making my own sales goals and just happened to earn some prizes from my director along the way! There were 2 that I particularly liked so when I realized I was getting close to earning those, I focused more on my goal. So, in those cases, the prize did help me to stay on task.
ReplyDeleteI also seem to get overwhelmed when I focus on the prize. All of a sudden, I get this anxiety and I feel overwhelmed. I can't explain it. I've found that just focusing on my financial needs is a better approach for me to take to get results.
I love that you shared this info, myst! Since I want to be a director someday (SOON!) it's good to have an idea of what the expense can be.
Pynkmyst, Shades, and Judi, have pretty much said it. It is the "extra". The prize is to be an incentive to help you and then reward you for working a certain level.
ReplyDeletePersonally, I never want my consultants, buying prizes, I want them to work towards them. The prize is an incentive to working.
I always laugh when I read quotes such as "I can't believe I paid $1800 for a toaster"! Duh.... that is really sad but maybe a little understandable the first time one was ever a star consultant. What is beyond sad is when you read quotes such as, I have been buying my star prizes for the lst 5 years". Forgive me if I sound harsh, but, can one really be that naive? Can they be that starved for any sort of recognition, that they are buying it at these prices? If you really, really want the prize that badly, wait long enough and you will be able to buy it on ebay for way less than $1800.
When I earn a prize, I feel the pride in knowing I did the work and that is what is being rewarded, I would be embarrassed and ashamed of myself if I bought the prize and tried to claim that I did the work for it. That would make me a fake (fraud).
I have always wondered since this seems to be so basic to me, why not boycout my grocery story? They offer rewards if I spend so much in a quarter. For example spend over $500 in this quarter and you can get a free Turkey. If I happen to spend $500, I get the free turkey but I am not going to go in and spend $500 to get a $20 turkey.
Also, they frequently run specials buy 10 for $10. Many times the deals are great deals. But who's fault would it be if I bought 10 of something because it was a good deal but it went bad before I got a chance to use it?
In both of the above examples, I have a choice. The store is doing a promotion. If I don't use common sense, should I blame the store? I really see no difference in these examples or the Mary Kay examples. Companies all over the country offer incentives for certain levels of performance.
One simply must exercise common sense in making decisions.
Just offering, if there is an individual out there that would like the MK Red Jacket Barbie, I would even sell it for less than $1800! (just joking)
Thank you, David, for this forum for balanced & honest debate, I really appreciate it.
ReplyDeleteI think the problem with the Star Consultant prize program is that a consultant may get caught up in the excitement of earning one of those prizes and in all the excitement (engcouraged by the SD) end up ordering way to much inventory. When the inventory isn't selling like she thought it would, the consultant may realize that she could have purchased a reasonable amount of inventory and bought herself a purse or a piece of jewelry or whatever. My unit places alot of emphasis on how great it is to earn these prizes. And the prize I earned coming in as an Emerald Star Consultant, while I really like it, is not worth the amount of inventory I can't seem to sell.
The decision to place the initial inventory should be based on what the consultant wishes to do with her business. Personally, I do not show the prizes for being a star consultant to a new consultant considering her first purchase. I want the decision to be a solid bsiness decision not swayed into a decision based on excitement of the prize. After the decision is made then the star program can be explained. A star prize can always be earned during the quarter. IMHO this helps give the consultant something to work towards.
ReplyDeleteAnd I have always found that I would rather have a consultant get started and then build her inventory after she finds what she is selling the best as opposed to coming in with a full inventory and then finding out that she has ordered items she may never move.
I understand there are different view points on this but I find it rare a consultant really joins and starts selling strong and continues to sell strong. It is a building process and I feel that building inventory should be a process too.
I agree with MK4ME. Inventory is a building process. I didn't start with a star order, but by the end of my first quarter I was a Sapphire and I got that MK Barbie! lol I have a Barbie collection so she was perfect! Things slowed down so I didn't order unless I HAD to. It helped me keep my money in order. :) Some prizes do excite me, I guess! ;)
ReplyDelete