Archive for August, 2012

Harper’s Article Exposes Mary Kay as a Pyramid Scheme

There's a good article in Harper's Magazine on Mary Kay and MLM this month. (It seems to also include this article)

The stand-out quote in my opinion was:

Most who make money earn about minimum wage, while fewer than 300 of the 600,000 Mary Kay ladies in the United States net a six-figure income. The women I interviewed for “The Pink Pyramid Scheme” told me stories about struggling to patch together daycare or to survive high-risk pregnancies while working long hours scouting prospects and hosting parties without any guarantee of a sale. Debts mounted, marriages failed. They couldn’t have it all because Mary Kay’s business model (like that of any multilevel-marketing enterprise) is designed primarily to profit from, rather than enrich, its workforce.

This really highlights a few key points with MLM:

  • Income Opportunity is Minimal - The expectation should be a minimum wage job. However, that's in earnings, it may not factor in costs of running the business (samples, training, travel, etc). The six-figure income is far from the norm and considering that only 1 in 2000 people make it, it's very unlikely that one can expect to work harder and smarter than the competition and succeed.
  • The Risk To Your Finances - Patching together daycare, high-risk pregnancies, working long hours, and hosting parties that might not lead to a sale... Mounting debts, and failed marriages. These are all very bad things that could be avoided.
  • Designed to Profit from its Workforce - Those six words are very powerful and very clear. They should be on the warning label of anyone looking into an MLM. Anyone looking to join an MLM should have to sign a waiver that they have read and understood this.

For those looking to learn more about Mary Kay, there's extensive information at The Pink Truth.

This post involves:

MLM News

... and focuses on: