Out of Product, Out of Business
by Donna Bayes
I am a senior sales director and have been with this company for 25 years, so I'd say that I have a little personal experience under my belt.
I recently read some discussions from consultants on a Mary Kay bulletin board about being out of product because of embezzling (spending all of your reorder money, rather than reinvesting it into more products). I'm sorry to say that I completely relate. Twenty-five years ago, when I began Mary Kay, we were poorer than church mice. I constantly embezzled my money. I paid the light bill, I bought groceries, bought school lunches with my MK money. All my MK money!! It became a nasty habit. So, when I needed product, which was constantly, I had to get creative in how I would get it, because I didn't have any money to reorder. I resorted to begging and borrowing (never stealing!). I shamefully used others' inventories to run my business. Although I always paid them back, it wasn't always promptly, and it was always hard. Sometimes an entire new order had to go back to the other consultant.
I also, many years ago, bought at wholesale from my adopted director. She became so used to that idea, that when she was trying to finish up her cadillac one year, she called to see if I needed any product! Neither my recruiter, nor director, earned the commissions they should have earned, and I didn't get the star recognition or end-of-year recognition I should have. Plus, I broke the integrity of my agreement. And, as I was paying cash (to the director) at 40% for that product, the thought went through my mind...why can't I pay the company, rather than the director? If I'm living without spending 100% of my funds, because I'm paying the director cash as I go, then surely I could not dip into my 60% when purchasing from the company.
I did whatever I could to get inventory--used hubby's paycheck, got loans, used credit cards, even got an inheritance once and bought $3000 wholesale to restock my shelves. But still, my nasty habit continued.
But, then we did something that was one of the best things we'd ever done. We went strictly cash. I had no credit cards. We closed all accounts and I worked strictly with a debit card. I still got loans. I had gotten many many loans in my own name. I never had to have my husband co-sign. Sometimes I paid those loans off in two weeks, sometimes in a couple of months, but I paid off many, many loans. But it seemed that I still was not using the 60-40 split as I should, even though I was much better. You shouldn't have to reborrow if you're handling your money properly.
Then several years ago, my husband chose to marry someone else. And I was on my own. I went to the bank to borrow a little money for an order. And I was turned down. Even though they had a file on me two inches thick of past re-paid loans, I got turned down because I didn't have a husband to fall back on and I was totally self-employed. I was shocked, to say the least. I still don't think it was fair, but...that's the way it went. And, you know what? It was the best thing that ever happened to me.
I had to totally rely on myself. It scared me enough that I began to place orders before paying my bills, even my rent. Placing orders is now my #1 priority. For, with no inventory, you surely are out of business. I can't pay the bills without inventory. Yes, I might pay it this month, but, if I don't have inventory, never again. I must have a large inventory to stay in business. And I have a GREAT inventory now. Rarely do I have to trade a product with anyone.
What joy! What peace! What confidence a large inventory offers! By the grace of God, and I mean that humbly and sincerely, I'm still in MK 25 yrs later. He helped me all those years that I "didn't play by the rules, financially." However, I never experienced the success I could have had, had I run my business with sound financial integrity. I've been more successful and happier in my consultant business in these past several years than I was all those other years of struggling to service my customers with product.
Another thing I have noticed. As Mary Kay always told us..."the speed of the leader is the speed of the gang." And my unit seemed to reflect me in the inventory category. Many of them were always borrowing and trading products...or, heaven forbid!, buying it outside the unit! These past many years, my unit maintains inventories where they rarely are out of a product. They save time by completing the transaction at the point of sale and run their businesses with integrity. What awesome, responsible women!
With that said, I would like to propose my suggestions to those consultants in the Mary Kay world who struggle to maintain an inventory. First of all, my heart goes out to you in compassion, for I truly understand where you are. Secondly, I will tell you that you don't have to be there. You must make a quality decision to change your situation. Before God and yourself, commit to running a responsible business of integrity. God is waiting for that decision and He will not let you down, if you will live by that code of honor to Him and yourself.
Next, you have to figure out how to get product one last time. Holding lots of classes close together, gathering the money and buying the product and then delivering is probably the one that makes the most sense, financially. But, some customers don't want to wait for their products. I also believe as you build your business inventory again, that you might have to place many small orders. Get those boxes coming regularly to your house.
So, as long as you are a responsible person who pays back debt and doesn't default on it, then you might consider getting one LAST loan. And then, vow to work on cash only with a debit card. Don't wait until you can "place a large order." Order small and often. Keep that money going into the company...it takes the temptation away from paying the light bill with it. You can sack up an order with a flashlight, but you cannot buy more product to sack up if you've used your reorder money to pay the light bill.
Remember that if you're out of business, you'll have to find another way to pay your bills. What would you do then? Would you get another job? Maybe that's what you need to do. Get a part-time job to help you build your inventory. Do whatever it takes to get yourself back in business on a sound financial footing...and then stay there. Your pride in yourself; the sense of peace and well-being; your gratefulness to the good Lord; your integrity that others see are all worth it. You can do this; you must do this. It is the only way to grow in this business.