Of Mice and Car Dealerships

Atrocious misunderstanding of facts aside, Pink Truth continues to insist that Mary Kay is... is... well at this point, I am not even sure what they are insisting over there.

On the one hand, they are still complaining about how long it takes Mary Kay to "get current"

Done it said (at 5:31 today, Dec. 17):

"New shades of lipstick its about time!!!!"

While elsewhere, it seems many others are moaning about how hard it is going to be to get rid of their old lipstick. OR Complaining about losing their commission check when product gets returned. T-t-t-t-t-thats what happens when you front-load. T-t-t-t-t-t-t-thats why front-loading doesn't work. Oh yeah and aren't all of you "out" of Mary Kay? Why do you care what colors they have or don't have? Why do you care if a front-loading director "loses" their commissions? Isn't that kind of the justice they deserve?

Anyway, as I said, all that aside:



I have been wanting to draw a comparison of Mary Kay to something we are all at least a little familiar with. Car Dealerships and the Car Salesmen that work there!

I was pleasantly surprised by Raisinberry's comment today:

"mkdv24...oh you cracked me up!!! TRIPLE 21 ! What are they thinking???? If this was a real sales contest, they would just watch the sales and award the highest sellers...like top ten... or top 100 and it would have NOTHING to do with a pre determined number, pulled out of the air.REAL SALES CONTESTS ARE BASED ON SELLING

Imagine the car dealer telling his salesmen that they win the trip to Cancun when they sell triple 21 cars! O my Lord...i used to FALL for this stuff!"

So, I will combine an answer to this, with my illustration. I hope it does not prove too confusing!

First of all, Shay (our star fleet commander ;) ) answered the question of sales contests excellently. You will have to go find her comment yourself as I am not sure it will make it to the main page as quickly as I would like. You should be able to see it - here -

I just wanted to point out to RB that a CAR and a TUBE of LIPSTICK are two different things. The CAR is going to cost ummm quick calculation..... at least several thousand dollars more than the lipstick. Totally different ballpark.

On the flip side of that... if you adjust your numbers, most car dealers (if not all) WILL say... If you sell x cars today/this month/this quarter, you will win xyz. To take it a step further, if you wanted to (as a salesman) you COULD buy the number of cars that it would take to reach that goal. BUT WHY?

Ok, now onto the illustration.

In a car dealership (not all, but most) you have the following "levels".
Owner
GM - General Manager (sometimes the owner doubles as GM)
GSM - General Sales Manager
SM - Sales Manager
Salesman. (sorry, no fancy initials here!)

Now, the owner wants to make money. In order for the owner to make the money he wants/needs to keep the business running and worthwhile he will determine how many cars need to be sold each month. (again, sometimes this task is relegated to the GM, the point is, the owner says, "we need to sell this many cars this month")

The owner tells the GM, "If you want to keep your job, this store better sell this many cars/make this much money". (He probably rarely uses the words "if you want to keep your job", but believe that it is WELL known that the target MUST be reached)

The GM, along with running all the day-to-day of the store, will sit down with the GSM. He will make sure that the GSM knows how many cars HAVE to move that month. They will probably strategize about what sales incentives to offer, what kinds of discounts they can offer, etc.

Now the GSM will get all his sales managers together and tell them what programs they are running. There will almost always be a, "sell this many and get this" sort of incentive. There are also, get this, incentives for how much money the salesman makes on the deal. If he sells a car that the dealership is "in" $7,000 - for $10,000 he will get less of a bonus than if he sells that same car for $12,000. I digress.

Now each sales manager goes to his department and tells his team (usually 4 0r 5 but it varies) how many cars they need to sell. THEN he says, "AND if you sell x cars today/this week/this month you will "WIN" xyz".

In short, "the car dealer telling his salesmen that they win the trip to Cancun when they sell triple 21 cars!" is REALLY not that far off.

More to the point, on the flip side of the prizes, the glitz, and "all that" the car sales business is BRUTAL.

First of all, ANY and ALL of the people in this equation are VERY disposable. If any of them from top to bottom, don't "make production" (yes they call it that there as well) they will be gone so fast that no one will even know where to find them.

Worse still, if you do "too good", you may be in danger. You see from the owner on down, no one in that world wants YOU to make money. They want as much of the pie as they can get. When an individual (esp. a sales manager) starts to do really well, he/she is in GREAT danger of whats known as a renegotiation of the terms.

They may start out receiving 20% of the PROFIT of each car. But if they start moving 20 cars a month, 20% becomes too big of paycheck and management starts feeling "ripped off". So all of a sudden, you get 5% of the profit of each car you sell.

What's that, you don't like that deal? Well you can always quit. I am not joking, nor am I exaggerating. It is really foolish because dealerships lose some of their best salespeople this way, but greed "has a way".

To wrap things up a little and in conclusion;

1. The "similarities" that Mary Kay shares to a "pyramid structure" can be seen in almost any sales organization - mlm or not.
2. The "deal" with Mary Kay is actually a LOT better than many other industries.
3. The fact that Mary Kay has a hierarchal structure that favors those "on the top" does not make it a pyramid scheme.
4. Sales incentives are often laid out with a goal. Again, read Shay's point on this one - its a good one.
5. You can find dishonest people in any industry. I have seen entire dealerships that are corrupt. From the owner to each sales person, you are almost guaranteed to get ripped off just from walking in the front door. Let's say that this dealership sells Mitsubishi. It would seem a bit silly to start a website levying vehement attacks against Mitsubishi Corporate because of this dealership. It would be even worse to levy attacks against EVERY individual Mitsubishi salesman because of this store.

Now, I guarantee you that you can find at least one Mitsubishi dealership that is this corrupt in every single one of the great 50 States. Still not a just cause to say that Mitsubishi is bad. Corruption is everywhere. I think that Pink Truth should perhaps simply change their name to "Anti-Capitalism", broaden their topic a little to include every industry in the world, and *pow* they will be MUCH closer to "doing what they say they are doing".