Mary Kay and Pink Truth are guilty of not understanding, or clearly communicating percentages. Mary Kay offers a 50% gross MARGIN. This means the COST of the product to the consultant is 50% of the PRICE to the consumer.
Mary Kay does a better job of communicating the essence of this. They (typically) say that you buy the products at 50% of the retail value. THIS is true. They do not say that you make a 50% profit. This is not true.
Pink Truth is way off. Assuming that they meant gross profit MARGIN, you don't account for discounts or other expenses, it is simply an equation of how much the product cost vs. what the retail price of the product is.
As far as this example goes, if you can get 8 purchasing girlfriends from someone, why not give them $80 of free product? Cost to you, $40. Amount of money you made (operative word "made" --- don't give her the $80 until you get the money from the orders) should easily cover that and then some... plus you stand to make more money on reorders --- if you take care of your customers and follow up with them.
What had me RollingOnTheFloorLaughing was "
I realize that retailers all run sales and special offers that cut into their profits. It’s a gimmick used to get people in the door and get them buying. I’m not opposed to that basic marketing tactic.
..."
Essentially, Tracy realizes that she is making a mountain (or mountains) out of a mole hill, but "oh well, I hate Mary Kay and this is the internet, so I can say whatever I want.
Expect the lemmings to jump in and agree wholeheartedly with the "we hate Mary Kay" chant. |
|
No comments:
Post a Comment