Smart Inventory Choices
- February 17th, 2008
- View Comments (20)
Across the board, I am seeing a lot of mistakes made with inventory orders. I am sure we have all been there. I know I have made a mistake here and there. I’ve decided to dedicate this post to helpful ideas and tips for placing inventory orders–from the initial order to restocking orders. We don’t want to order more than we can handle, but we don’t want to come up short either. Which is better? In my opinion, I think it’s OK to come up short. I do think it is smart business practice to have an inventory, but there are good ways and bad ways to achieve inventory. Here, I am going to make some suggestions that I feel are useful for keeping inventory under control and manageable–both product-wise and money-wise.
For New Consultants
Where to Start
The first thing to always keep in mind is that inventory is optional. It is not required. When deciding whether to order inventory or not, one must consider what is in one’s budget; how much one wants (desires) to work one’s Mary Kay business; how serious one is about Mary Kay (i.e. Is this a hobby or a business endeavor?); how much time one wants to put into her Mary Kay each day, week, month, etc.
If one is unsure where to start, my suggestion would be start with little to no inventory. If you come up short, you can always order more if needed. My definition of “little to no inventory” is $0.00-$600.00 wholesale. When ordering, always keep in mind the retail amount you are getting. When you are ordering $600 wholesale, you are really putting $1200 retail on your shelves. That’s a lot of stuff. It is. It’s especially a lot when you are brand new and not used to selling anything out of your home or otherwise.
If one has a plan to hold a set number of appointments each week and feels fairly confident one has a good client base to start from, I would recommend anywhere from $200-$1200 wholesale. I do believe that it is a good idea to start with some inventory, however, if it’s not feasible, it’s not feasible. Taking orders to start is not impossible. Personally, I started with $1200 wholesale. That means I had $2400 retail to start out with. I think that was a little much to start for me, but I survived and learned from my own ordering and inventory errors. Honestly, I don’t think there is any reason to start any higher than $1200. If you are a stellar seller, you will be reordering soon and will most likely hit your Star. Isn’t that better than ordering $1800 off the bat and panicking? I would think it is, but what do I know.
What Should I Put In That Initial Order?
Mary Kay is a skin care company. My recommendation is to have Time Wise in that order. Miracle Sets, foundations, Microdermabrasion, eye creams, Satin Hands, and Satin Lips. Glamor is secondary in Mary Kay, however, mascara is popular even with non-makeup wearers. 
Ultimate Mascara and Oil-Free Eye Makeup Remover should be in that initial order as well. If your order is going to be small, focus on skin care. That is what we do at our appointments. If it’s going to be a little larger, order a little bit of color–maybe what comes on the basic color cards for classes.
If you are starting small, it gives you room to move when you begin to gage what your customers want and need. You are going to learn a lot about people in this business. You will experience different personalities and different tastes. As you build relationships with your customers, you will learn what you sell and what you don’t sell. This is another reason I advise start small so you don’t overestimate sales of a particular product and wind up stuck with excess.
But What If My Customers Don’t Like to Wait?
This is why I do think some inventory is a good idea; but at the same time, if you don’t have it, you don’t have it. In my experience, I’ve found that most people are OK with waiting and expect it because they realize MK is a direct sales company like Avon, Partylite, and Pampered Chef. They expect to wait for those consultants to deliver and expect to wait for Mary Kay as well. My customers are often surprised that I have things ready for them. I do think it is good to deliver on the spot. It helps to prevent buyer’s remorse or the option of running to the mall or drug store for some other brand.
I only have one customer who wants her products yesterday. 
If you have to make your customers wait, make sure you are up front with them. Tell them you will be ordering it that night or the next day and you will have it within 7-10 days. If it will be longer, tell them. They usually understand. And then make sure you deliver on time! Track the order on InTouch. If it looks like it’s delayed, get in touch with your customer. Ask your director or a sister consultant to front the product if necessary.
Financing
If one chooses to have some inventory, the next thing to think about is how to pay for that initial order. Of course, cash is always best, but let’s face it, we don’t all have that kind of money just laying around. Many opt for credit. My advice, if you opt for credit, try to get a 0% APR. I did that. If you can’t get 0%, use a low APR card. I know that is difficult these days. Even with stellar credit the rates are way up!
Things to ease your mind:
- Interest is deductible. If you do choose to use a credit card or take out a loan, the interest is a tax write off.
- Discipline yourself to stick to a payment plan.
- Don’t charge more than you are comfortable with. Period!
- Watch for credit card bonuses like 0% APR on purchases and/or balance transfers.
- Mary Kay comes with a 90% buyback gurantee for anything you purchased within the last 12 months at any given time in your Mary Kay career! If you feel like you are in over your head, you have that life preserver to grab onto!
If you are married discuss your options with your spouse. Some husbands are going to be less open to inventory than others. If you decide to order inventory without consulting with your spouse (which I do not recommend); order small and tell him what you have done! You don’t want to have to justify a large credit card bill that he didn’t know about later. That is a bad idea.
I was single and living alone when I signed my agreement. My decision was mine only. Not everyone has that freedom. It’s OK. If you talk to him about it and he still adamantly says no, just work from your Starter Kit and catalogs and take orders. It can be done.
For Everyone From the Brand New Consultant to the Veteran Consultant
Reordering and Restocking
Rule Number 1 in ordering more product to restock your shelf is: if you didn’t sell enough to order that much, don’t order it! There are exceptions. I’ll list them briefly here, but I will be writing a more detailed post in the future about ordering, recognition, and building inventory.
The first exception is for those who are starting small with inventory. It is recommended in this case, that instead of profiting right away, use the profit to invest in more product so that inventory can be built up without debt or additional debt. I did this for my first year or so. Now, if I had something pressing, I would pay myself, of course. You have to live first! Maybe I should repeat that: you have to live first!!
The next exception is if you are close to a goal such as Star–and by close I mean $100 or less–you could stretch the order to meet that. If you are ordering according to what you are selling, you are going to sell that extra $200 retail without problem to make up for that splurge. If you are $600 away from your Star, don’t charge it just to get there and plan to sell it later. Chances are, if you aren’t selling it now, you are going to find yourself charging more in the future and it will snowball. When someone tells you “find a way, make a way,” they are referring to selling this product! They are not saying go out and charge it. Things are not meant to be taken literally in this business. Read between the lines! Use critical thinking skills! You are not a robot. You have common sense and good judgment– use them!!!
Rule Number 2 in ordering is order according to what you are selling. If you sell $400, order $200. Pay yourself the other $200! If you are building inventory, use that $400 to reorder. Do not order $600 wholesale if you only sold $400 retail! Don’t do it. You could regret it later. Also, if you get into this habit, you will definitely get into some trouble in the future.
Rule Number 3 is be future focused. Always think ahead to how your ordering habits now are going to affect your financial future. Get out of the moment for a minute and look at your big financial picture! Think about how ordering more than you need now is going to affect you in the future. Look at your past sales record. Does it paint a realistic picture that you will sell the extra product quickly? If it doesn’t, I would hold off. Master selling what you have before you just start ordering.
Rule Number 4 is watch out for the hype. In Mary Kay, there is a lot of prize recognition for sales. It is based on what we order wholesale. Do not buy your prizes. Do not buy your prizes!!! I’m going to write a whole post soon about how wrong this is on so many levels. Don’t do it. As I suggested above, if you are $100 or less away from a prize, you could probably get away with cheating it a little. If you are any more than that, hold off. It is far more rewarding to earn the prize because you actually did the work and sold the product than it is to just punch in your credit card number and raise your debt. Most of those prizes are not worth the amount of wholesale you have to order to earn them. They are a bonus for a selling job well done. If you haven’t sold enough to earn that prize, go buy one at a store. You’ll save money. If you don’t want to do that, sell your product. You’re not ordering products to get the prize. You’re ordering the products to restock what you have sold! Once you do that, you get a bonus; a prize from Mary Kay, Inc. or your director or both.
Watch for related posts in the near future. This is going to be somewhat of a series on inventory, money, prizes, and self control. 
Tags: Idea Sharing, Inventory, Money Management, Ordering, Personal Responsibility, Self Control, Self-Discipline
Shades of Pink
Pink Biz
warzmondu
Vanessa
Stumble It!
Superb post Shades! Very good advice for newbies to seasoned consultants. I love how you have broken down the suggestions for newcomers and those of us who are sellers
Bravo.
It’s really exciting to get caught up in all the hype for caddy and star orders, but we all need to be realistic: YOU are the one running your business, not your director or recruiter or whoever. Sure, you will be a team player if you place a Star order without needing the inventory on your shelves but come on now, if you don’t sell it, you don’t buy it. I know of so many other consultants who got sucked into the hype and they found themselves in a lot of debt and overwhelmed, and then bitter because of it! This is a great company and a great product, we are so blessed to be able to participate…but by participating, we are businesswomen, and we have a business to run.
Great post, shades. I love how you keep it real for so many of us.
Your post is the first great explanation of inventory that I have heard in the MK world in the last four years. I tell my recruits basically what you wrote each time I talk with them about inventory. Some listen, some don’t.
What concerns me is that the MK culture right now is about recruiting and doing large inventory orders. I have been in MK for 8 years and this wasn’t the case when I joined, not locally or on the corporate level. I pray that corporate gets a hold of this run-away train soon though. Many great women looking for acceptance in the right place but with the wrong mindset are getting hurt.
Good job. You’re going to be a great Director.
Thank you, ladies!
PinkLady–I understand your frustration. I feel it, too. My post here is based on how the directors I work with present inventory to new consultants and also how I present the information to anyone I’m talking to about joining my team or ordering inventory.
Thanks for helpful information on inventory. I am newly aquinted with Mark kay way over here in Norway where the prices are sky high, but I feel the products are worth it. Good to have sound guide for ordering.
Thanks again
All the best,
Cher
Good Post Shades… I didn’t order for about 7 months and I wasn’t working it either. I didn’t let any tell me what to order or how much. When I did decide to order I had orders before I placed the order. I only ordered $600 and then I went from there. Have I ordered more than I needed well yes I have do I now NO I don’t.
What we have to remember is this is our business and we are the only ones responsible for what we do and that is that. Your recruiter or director is not going to pay off that credit card you are. Be wise in this, because you can get in over your head. I have been a star consultant for like 7 in a roll this time I might not make and if I don’t it is no big deal. I am not going to put myself in a financial jam just to get a prize. That being said just be wise and remember you are the one that is going to pay for what you order. And just don’t order to order.
Have a GREAT DAY
Cher–Thank you for visiting! I guess I’m officially international now.
I’m glad you found the information helpful to you in your situation, too. Please visit often. I will be writing more on this subject as well as on money management.
Pink Bren–you make so much sense! I made some order mistakes early on. My issue wasn’t so much the prizes, but I would get this idea that I HAD to be able to provide products to everyone at an appointment. So, I would order $400 instead of $200 for example. Then, something would happen either the appt. would cancel, or sales would be much smaller than anticipated. So, I stopped anticipating and just order what I need at the time. If I need to order more later, I will just do that.
Congratulations on you 7 consecutive Star quarters! That is awesome! I haven’t been a star in awhile. Maybe sometime this year. 
Good posting Shades and I DO have something to crow about (still without a computer) that should change next week. I put out 4 Facial boxes and I managed to get the IHOP!!! Ill let you know the results. I miss all of you Im catching up today.
This was an excellent explanation about inventory!
Great job!! I look forward to reading more soon!
Thanks, Shay! Hopefully, I’ll get more up here pretty soon.
Colleen–great to see you again! Hope you get your computer soon. Great news about your facial boxes!
Excellent job Shades!! I have never understood why some directors want to bring in new consultants with “huge” orders*. MK does not restrict how many times a month you can order, so it is not like you must make sure you have enough product because you can’t get more if you run out.
*(Yes, I do know that it means a big commission check, however, it also can mean no orders from that consultant for a long time or a chargeback if they consultant can’t move the product - and if a consultant orders 5 - $600 orders as she sells the product, my commission check will be the very same amount over time as if she did a $3000 initially and her product will be newer as she replaces what she sells then if it has just been sitting on the shelf!)
I agree that starting out with some, does make this business alot easier to do but it is do-able without if the consultant has the determination.
I want my unit members to build their inventory has they build there customer base and stock what they move, personally, no one needs one of everything. I know I have gone head to head with some that disagree with my view point, but I will stand my ground. If a consultant comes in too big and life gets in the way, too much product and too much debt…. can freeze a potentially great consultant. We all know how under pressure, many of us “meltdown”, it can be argued that the strong will rise to the challenge, however, not everyone needs to be “strong” to run a good parttime business. The philosophy of those that overcome tends to be in developing leaders. Well, I personally don’t have a unit full of future directors but I do have a unit full of great consultants. And the individuals that want to become a director, will.
Once again, thank you for taking the time sharing such great information with others.
Hubby and I have sat down and discussed what starting inventory I will have.
I am so glad he is supportive of me and taking an active part of the decision-making process!
That is wonderful news, Shay. I’m happy that you have his support and input. That is valuable.
There is nothing wrong with starting a new consultant off with no products other than what is in the starter kit.
The Perfect Start is just that – Perfect! And keep doing it. After the first two weeks are over, then sit with her and show her what she sold. From that start building an inventory. Slowly. and with only products that she is selling.
If her recruiter has done her job right then this consultant will have sold $1000 to $2000 in those first two weeks and have future bookings and have given out the recruiting literature and possibly have a couple of recruits too. She can then place her w/s order to covers those classes and possibly add about 10% more to have stock of some items. If a Director had 5 to 10 of these consultants in her unit every month, she’d be laughing all the way to the bank.
It’s the 60/40 split we were taught back in the old days that is the most important.
Besides, there’s a thing called Just In Time (JIT) ordering. JIT is a process that manufacturers use that are mega-manufacturers; the big companies. They do not carry inventory; they order it just in time.
With shipping times much more improved over 20 years ago, it takes sometimes only 3 days for an order to come in.
Anne Newbury taught that if your new consultant came in with inventory, it was the recruiters responsibility to help her sell half of it!
Just my two cents.
Thanks for posting your comment here, LookingforAnwers! I am in total agreement with you.
I often do JIT ordering for things such as spa products or limited edition items. I tell my team to focus on skin care if they want to have stock.
Congratulations!
Absolutely a great article on Managing Your Buisness/Inventory Management.
I believe this is the way I learned it many years ago.
I also believe this method was Mary Kay Ash’s intention from the beginning!
I do know for a fact that too many directors/recruiters are pushing for VERY large intial orders these days. This could flip a win/win situation into a lose/lose situation.
I am now nominating you for MISS GO-GIVE!
I bet you have received that honor more than once.
Stoni–thank you so much for visiting and for your kind words. I am truly flattered.
Hi ladies, I just stumbled across this site and love your article on inventory! I have always felt that it is better to come in with some inventory if you can afford it, but that it is much more important so start with a comfortable amount based very realistically on what your goals are. I agree that it can leave a very bad taste in a new consultant’s mouth if she orders too much initially and then gets discouraged when it is taking her longer than she thought to get her business off the ground. We are in the business of enriching women’s lives, and that can be done more effectively overall with their long-term business stability in mind, rather than with our own commission checks in mind!! My goal is to be a Sales Director this year, because I am passionate about this business, and I want our focus to be on selling products, and recruiting people to sell products, not to buy. Thanks again for your blog and awesome article!!! It is very refreshing.
I’m sure all of our NSDs would be proud, as would Mary Kay herself.
Hi Jennifer! Glad you found us here.
Thank you for sharing your thoughts. My goal is also to be a Sales Director. I want to be DIQ by December. I hope to see you back! And thank you for your kind words.