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.

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2 Responses to “Harper’s Article Exposes Mary Kay as a Pyramid Scheme”
  1. Myrian Says:

    I cannot speak for other cnoeamips, but I do know that Mary Kay is not a mlm. Mary Kay is a dual marketing company. Meaning we buy directly from wholesale (Mary Kay) for $1 but sell to our customers for $2.Considering there are close to or over 2 million consultants in Cananda and the US alone, there are only 20% who are actually out there making money, holding appointments, earning cars, etc. The other 80% either got in Mary Kay for personal use to get the discount, only sell to their immediate friends and family, or hands out books. These avenues don’t bring a successful portion of income or cars, and these people generally do not hold appointments.There are people in several home-based businesses who give up for many reasons. Last year, I had a total of 6 consultants on my team who quit operating their business because, simply, they didn’t try.A lot of people see home-based businesses as a get-rich-quick plans. When simply, none of them are. Home-based businesses are just like going to work for Corporate America in order to get paid, you have to go to work.With a home-based business, you control when you work, the hours, the income making potential, and how far and fast you want to succeed. With Mary Kay, we don’t have glass ceilings on money making potential or growth. I love working for myself than at a Corporate America job making that persons dreams come true. What about your dreams? Who’s going to make those come true? It starts with you and only you.Corporate America will only pay you what THEY think you deserve and I personally would rather have control over what I make than someone else (in Corporate America).

  2. mlmmyth Says:

    If it was a dual marketing company as you defined it (we buy directly from wholesale (Mary Kay) for $1 but sell to our customers for $2), there would be no bonus for referring other people to be Mary Kay sales people. This doesn’t appear to be the case.

    Also, hundreds of thousands, perhaps millions of people, have reviewed the Wikipedia description of Mary Kay, “Mary Kay, Inc. is a privately owned direct selling company that sells cosmetics products directly to consumers, using multi-level marketing” and found it accurate.

    Your numbers about the people joining to get a discount seems to be false according to the data at Mary Kay Destroying Women. If Mary Kay people signed a distributor agreement, for any reason – discount or not, they are a distributor and thus are Mary Kay is bound by the FTC statements on MLMs Vs. Pyramid Schemes.

    Here’s a little secret about MLM, but it was revealed in the Harper’s article. If any significant income comes from those you’ve recruited, you don’t control it at all. If you can buy 40,000 units at $1 and sell 40,000 at $2 and make $40,000, then you are doing well. I highly doubt the average Mary Kay salesperson is moving 110 products per day, 7 days a week, 52 weeks a year. Even then $40,000 isn’t exactly making dreams come true for most people.

 

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