Interested in the vast differences in inventory and compensation plans for Mary Kay Cosmetics vs. Nerium?
Mary Kay is 50 years old this year. Opened Sept 13, 1963
Culture - Mary Kay Ash was a pioneer for women in business. She was a wonderful person who believed in building women. Personal development, sisterhood, business skills are all part of this culture. Women join Mary Kay to not only build a business, but many times for the sisterhood, positive women, fun, and personal growth.
Cost to join - $100 for showcase plus inventory. Inventory packages start at $600 and go up in increments of $600. $3,600 wholesale is considered a full inventory and consultants are taught to keep reinvesting their profits from sales until they reach that amount of product on their shelves. That is $7,200 in retail product… a lot of cosmetics!
Being “active” in Mary Kay means placing a $200 wholesale order within one month. That one order keeps a consultant active for 2 months. Sometime in month 3 the consultant needs to order again to remain active and keep receiving their commissions from their personal recruits. To always remain active during a year a consultant must place four $200 wholesale orders. This is $1,600 retail product purchased each year.
Compensation Plan - 50% commission on personal sales. This is before expenses, hostess gifts, discounts on products, mailings, etc. Those all come out of the consultants profits. 10% is encouraged to save back to pay for these. Discounts given are huge in Mary Kay, so that 50% commission is really not the true story. Consultants also must be authorized to take credit cards so their customers can pay using a credit or debit card. Consultants pay a fee to do this just like other retail businesses do. This is also a consultant expense. She also is responsible for making deliveries out of her inventory to her customers, which is very time consuming and costly because of the cost of gas.
Recruiting Commissions - 4%, 9% to 13% commission on recruiting (13% with a $600 personal order - anything less only 9%)
With 1-4 personal recruit’s a consultant earns a 4% commission paid out based on the total wholesale orders of their team. This comes directly from company and is paid once a month. Example 1,500 volume would be a commission check of $60.00
5 or more personal recruits who all place an order in the same month 9% commission On that same $1,500 example above that would be a check of $135.
5 or more who order and you order a $600 wholesale order that month you earn a 13% commission. Note - the ordering requirement to get the highest commission. That is required to get the maximum commission. Same example above $195.00 commission at 13%.
Consultant car program - 12 personal recruits to win a car. Starting with 5 recruits and then moving up to 12. The car program takes 4 months of $4,000 volume per month. They need to be strung together. $16,000 total production. The car is leased in the companies name and the consultant is the designated driver of that car. One other person in the family can be added on as authorized driver. The company pays the taxes and insurance and once the car is earned if the production qualifications are not made the cost of the car is deducted from the consultants commissions. Once a car is earned they have it for 2 years, and then have to go through the car qualifications again.
Becoming a Director - Another 4 month program that can be entered into after the 4 month car qualification. The volume requirements are the same per month. That group of 12 needs to build to a group of 30. At this point the person entering Director Qualification can add her personal recruits people also. Prior to this they did not count. Less then 2% of the consultants in the company will ever reach the level of Directorship because the qualifications are too stringent. It’s also difficult to keep once attained.
Director Commissions - 13% commission on unit volume - average unit is $5,000 per month In addition to that Directors earn 9 - 13% commission on their personal recruits
Cadillac production is $16,000 per month for 6 consecutive months
Bonuses paid monthly - $500 - $5,000 per month depending on unit production
Directors are also responsible for purchasing their own Director suit, shoes, jewelry, etc. They run unit meetings, purchase all of the quarterly product promotions, etc. The average Director in Mary Kay is earning less then $2,000 a month.
National Sales Director Status - This is the pinnacle of success in Mary Kay. It takes years to build to this status. It requires 10 consultants become a Director, and 8 of those 10 also need to have a consultant who reaches Director status.
National Sales Directors are required to retire at age 65. They receive 60% of their income based on their very best 4 years and that 60% is paid out to them for 15 years. If they should die before the 15 years is up their family will continue to receive that income.
The last stats I saw came from the company “Applause” magazine from August 2012. There were 142 National Sales Directors listed there who had incomes listed of $10,000 or more in a single month. The month posted was from April. There are over 1 million women in Mary Kay in the U.S. Barbara Sunden is the #1 National and she has been with Mary Kay for over 40 years. She earns in excess of a million per year.
Cost to join - $100 for showcase plus inventory. Inventory packages start at $600 and go up in increments of $600. $3,600 wholesale is considered a full inventory and consultants are taught to keep reinvesting their profits from sales until they reach that amount of product on their shelves. That is $7,200 in retail product… a lot of cosmetics!
Being “active” in Mary Kay means placing a $200 wholesale order within one month. That one order keeps a consultant active for 2 months. Sometime in month 3 the consultant needs to order again to remain active and keep receiving their commissions from their personal recruits. To always remain active during a year a consultant must place four $200 wholesale orders. This is $1,600 retail product purchased each year.
Compensation Plan - 50% commission on personal sales. This is before expenses, hostess gifts, discounts on products, mailings, etc. Those all come out of the consultants profits. 10% is encouraged to save back to pay for these. Discounts given are huge in Mary Kay, so that 50% commission is really not the true story. Consultants also must be authorized to take credit cards so their customers can pay using a credit or debit card. Consultants pay a fee to do this just like other retail businesses do. This is also a consultant expense. She also is responsible for making deliveries out of her inventory to her customers, which is very time consuming and costly because of the cost of gas.
Recruiting Commissions - 4%, 9% to 13% commission on recruiting (13% with a $600 personal order - anything less only 9%)
With 1-4 personal recruit’s a consultant earns a 4% commission paid out based on the total wholesale orders of their team. This comes directly from company and is paid once a month. Example 1,500 volume would be a commission check of $60.00
5 or more personal recruits who all place an order in the same month 9% commission On that same $1,500 example above that would be a check of $135.
5 or more who order and you order a $600 wholesale order that month you earn a 13% commission. Note - the ordering requirement to get the highest commission. That is required to get the maximum commission. Same example above $195.00 commission at 13%.
Consultant car program - 12 personal recruits to win a car. Starting with 5 recruits and then moving up to 12. The car program takes 4 months of $4,000 volume per month. They need to be strung together. $16,000 total production. The car is leased in the companies name and the consultant is the designated driver of that car. One other person in the family can be added on as authorized driver. The company pays the taxes and insurance and once the car is earned if the production qualifications are not made the cost of the car is deducted from the consultants commissions. Once a car is earned they have it for 2 years, and then have to go through the car qualifications again.
Becoming a Director - Another 4 month program that can be entered into after the 4 month car qualification. The volume requirements are the same per month. That group of 12 needs to build to a group of 30. At this point the person entering Director Qualification can add her personal recruits people also. Prior to this they did not count. Less then 2% of the consultants in the company will ever reach the level of Directorship because the qualifications are too stringent. It’s also difficult to keep once attained.
Director Commissions - 13% commission on unit volume - average unit is $5,000 per month In addition to that Directors earn 9 - 13% commission on their personal recruits
Cadillac production is $16,000 per month for 6 consecutive months
Bonuses paid monthly - $500 - $5,000 per month depending on unit production
Directors are also responsible for purchasing their own Director suit, shoes, jewelry, etc. They run unit meetings, purchase all of the quarterly product promotions, etc. The average Director in Mary Kay is earning less then $2,000 a month.
National Sales Director Status - This is the pinnacle of success in Mary Kay. It takes years to build to this status. It requires 10 consultants become a Director, and 8 of those 10 also need to have a consultant who reaches Director status.
National Sales Directors are required to retire at age 65. They receive 60% of their income based on their very best 4 years and that 60% is paid out to them for 15 years. If they should die before the 15 years is up their family will continue to receive that income.
The last stats I saw came from the company “Applause” magazine from August 2012. There were 142 National Sales Directors listed there who had incomes listed of $10,000 or more in a single month. The month posted was from April. There are over 1 million women in Mary Kay in the U.S. Barbara Sunden is the #1 National and she has been with Mary Kay for over 40 years. She earns in excess of a million per year.
Biggest Differences
Only customers of Mary Kay Cosmetics are the consultants and directors.
The consultant can choose to sell out of her inventory and not reorder that month which is the only way the recruiting commissions are made. If a consultant doesn’t have a product on her shelf to fill an order she might “borrow” it from another consultant to fill a customer’s order. When consultants do this it kills unit production.
Breakage - If a consultant quits, any recruits she has do not go to anyone. The company keeps those commissions.
When a consultant becomes a Director they break away from the parent unit, making it nearly impossible to build large volumes. 4% is paid to the Senior Director of the offspring Director, based on that Directors production.
Owning their own business - This is a very controversial statement. Mary Kay consultants and Directors can set their own hours, decide on their own specials or sales, etc. They cannot sell their business, nor can they leave it in their will. They have not created a business with residual income … they have created for themselves a job.
The consultant can choose to sell out of her inventory and not reorder that month which is the only way the recruiting commissions are made. If a consultant doesn’t have a product on her shelf to fill an order she might “borrow” it from another consultant to fill a customer’s order. When consultants do this it kills unit production.
Breakage - If a consultant quits, any recruits she has do not go to anyone. The company keeps those commissions.
When a consultant becomes a Director they break away from the parent unit, making it nearly impossible to build large volumes. 4% is paid to the Senior Director of the offspring Director, based on that Directors production.
Owning their own business - This is a very controversial statement. Mary Kay consultants and Directors can set their own hours, decide on their own specials or sales, etc. They cannot sell their business, nor can they leave it in their will. They have not created a business with residual income … they have created for themselves a job.
Nerium is 15 months old opened August 28, 2011
Culture - yes Jeff Olson is a pioneer in personal development. Nerium is about using the business to build people … not using people to build Nerium.
Cost to join - $499 or $999 - one time purchase. After that the only requirement is 1 bottle per month for personal use. 2 bottles per month at the Senior Director status.
3 UR Free - Once 3 customers are acquired this is only $9.95 out of pocket expense! For every 3 customers one more free bottle can be added, up to 3 free bottles per month.
Nerium Gives Back - for any new Brand Partners recruited a bottle of Nerium is earned to use as samples, or sell outright. This is a stark contrast to the inventory in Mary Kay.
Recruiting - Success Pack bonuses are paid when someone brings in a new brand partner. $50 for a $499 pack $100 for the $999 pack. Differential Bonuses and Customer Acquisition Bonuses are also paid each week. Volume bonuses are pd monthly.
Everything in Nerium is based on the number three. Everything can be attained here with 3 personal team members that make up 3 legs. Once those 3 are on the team the company pays down 3 levels. Everything is volume based. As you move up and rank advance you get paid down more levels based on the entire volume of the group, which includes customers. This is huge and can create true residual income. Not more then 60% of the volume can come from any one leg.
Director - 4,500 volume and a team of 3 personals and their team members make up that volume. If accomplished in the first 60 days that person earns an Ipad, or can take $350 cash, or 7 bottles of Nerium. Directors also receive a 10% coaching bonus. That means a 10% check match on the total income of each of their personal team members. Over time that 10% check matching bonus can become huge.
Lexus Program - $12,500 volume in a calendar month. 3 personal sponsored and their team members. This is a $500 bonus that can be put towards the Lexus of your choice. This car can be leased, or purchased, and can be new or up to 4 years old. The colors can be silver, white, or platinum (the same color as the Nerium bottle) Nerium is only 15 months old and over 1,000 people have already earned a Lexus bonus. If someone who has earned the bonus is not ready to get a car they have the option of taking 7 bottles of Nerium to continue to help them build their business.
National Marketing Director - There are over 200 people who have already attained this position! This includes a $25,000 bonus. This is simply volume based. Any single month with $150,000 volume, one Director in each of the 3 legs is the qualification. National Marketing Directors move up the ranks to 1 Star, 2 Star, 3 Star, etc. Nerium gives Live Better Bonuses. At the 3 Star level a $100,000 bonus is given. At 5 Star a $250,000 bonus is given. At International Marketing Director a $500,000 bonus. Gold International Marketing Directors receive a $1,000,000 cash bonus.
Customers - Nerium Customers receive their own personal website. They can also participate in the 3 UR Free program and receive their product free every month!
Cost to join - $499 or $999 - one time purchase. After that the only requirement is 1 bottle per month for personal use. 2 bottles per month at the Senior Director status.
3 UR Free - Once 3 customers are acquired this is only $9.95 out of pocket expense! For every 3 customers one more free bottle can be added, up to 3 free bottles per month.
Nerium Gives Back - for any new Brand Partners recruited a bottle of Nerium is earned to use as samples, or sell outright. This is a stark contrast to the inventory in Mary Kay.
Recruiting - Success Pack bonuses are paid when someone brings in a new brand partner. $50 for a $499 pack $100 for the $999 pack. Differential Bonuses and Customer Acquisition Bonuses are also paid each week. Volume bonuses are pd monthly.
Everything in Nerium is based on the number three. Everything can be attained here with 3 personal team members that make up 3 legs. Once those 3 are on the team the company pays down 3 levels. Everything is volume based. As you move up and rank advance you get paid down more levels based on the entire volume of the group, which includes customers. This is huge and can create true residual income. Not more then 60% of the volume can come from any one leg.
Director - 4,500 volume and a team of 3 personals and their team members make up that volume. If accomplished in the first 60 days that person earns an Ipad, or can take $350 cash, or 7 bottles of Nerium. Directors also receive a 10% coaching bonus. That means a 10% check match on the total income of each of their personal team members. Over time that 10% check matching bonus can become huge.
Lexus Program - $12,500 volume in a calendar month. 3 personal sponsored and their team members. This is a $500 bonus that can be put towards the Lexus of your choice. This car can be leased, or purchased, and can be new or up to 4 years old. The colors can be silver, white, or platinum (the same color as the Nerium bottle) Nerium is only 15 months old and over 1,000 people have already earned a Lexus bonus. If someone who has earned the bonus is not ready to get a car they have the option of taking 7 bottles of Nerium to continue to help them build their business.
National Marketing Director - There are over 200 people who have already attained this position! This includes a $25,000 bonus. This is simply volume based. Any single month with $150,000 volume, one Director in each of the 3 legs is the qualification. National Marketing Directors move up the ranks to 1 Star, 2 Star, 3 Star, etc. Nerium gives Live Better Bonuses. At the 3 Star level a $100,000 bonus is given. At 5 Star a $250,000 bonus is given. At International Marketing Director a $500,000 bonus. Gold International Marketing Directors receive a $1,000,000 cash bonus.
Customers - Nerium Customers receive their own personal website. They can also participate in the 3 UR Free program and receive their product free every month!
Many thanks to Stephanie Ritchards for her research and this detailed information.
