Mary Kay Compensation Plan
Mary Kay, a US based company with headquarters in Addison Texas, is dealing in skin care products since 1963. This company was founded by Mary Kay Ash with offerings of nine skin care products and now there are about two hundred products under this brand. Mary Kay Inc was traded on New York stock exchange from 1965 until 1985, when Mary Kay took the company private in a buyout. According to the company statistics for the year 2008, Mary Kay Inc has $2.6 Billion sales in wholesale from 35 different markets, and more than 1.9 million independent distributors. The company reports 600,000 independent distributors in United States, playing their role under Mary Kay Compensation Plan.
Mary Kay is marketing different products in the line of skin care, color makeup, body care and fragrance. These products are marketed and sold by independent sales consultants, who buy the products in wholesale, individually or in several packages. These packages are planned to facilitate the independent distributors who may carry bonus products or items and may buy these products on credit, with monthly payments or installments.
The career path of Mary Kay compensation plan has three basic levels
1. Independent Consultant or Distributor
2. Independent Sales Director
3. Independent National Sales Director
Each level of the career path contains the specific qualifications that must be met to attain the level, and to be eligible for commissions and bonuses associated with the each level. Every distributor has to meet the specification of placing an order of at least $200 every quarter to qualify as an active member. Otherwise he will be considered as inactive and will eventually lose his or her membership.
Mary Kay compensation plan works in the way that once an independent distributor is recruiting new distributors and they are resulted as active members, he is considered in a position to claim the qualification for a senior consultant. At this stage the compensation scenario will also be changed and the distributor will be paid at higher level.
When a consultant or distributor comes with at least 8 personal recruits, he qualifies for the director level, and at this stage the distributor is required to build a team of at least 30 active distributors or consultants. But he needs only 8 personal recruits. In order to maintain the status of Sales Director, the team of representative will have to generate at least $4000 wholesale for every month.
There are also levels of higher Sales Directors. According to Mary Kay Compensation Plan, the company expects the higher Sales Directors to generate sales director units. These sales positions are not permanent, the representatives have to maintain these positions by maintaining the qualifications else they will be reduced to the level corresponding their recent volume and size of the team.
Mary Kay Compensation Plan consists of number of bonuses and commissions which are performance based, and are rewarded to the representatives according to their achievements. These commissions and bonuses are specifically associated with the levels of career path. A commission of 50% off the retail price of the products, sold by representatives is offered for all levels of career path. A representative is also entitled for a commission of 4% to 13% on the orders, made by his team. The representative also earns a bonus of $50 for recruits joining with a minimum order of $600. For Sales Directors, bonus for recruits increases to $100. Sales Directors receive commissions and bonuses on sales volume on their entire unit, not just their personal recruits.