Many recruits are snared into Mary Kay Cosmetics with the lure of executive earnings. They are told that the sky’s the limit, and the earnings are unlimited, if only you are willing to work hard enough. Sales directors tout their “highest checks” without ever mentioning all the business expenses that must be paid out of those checks, or that those are a one-time deal and don’t represent their normal commission checks.
The hard workers are the ones who make it big in Mary Kay, right? Wrong. One has to look no further than superstar Allison LaMarr, who was the fastest woman ever to make it to Mary Kay National Sales Director. Yet all of that hard work resulted in a downward spiral that culminated in Allison becoming the fastest quitter in Mary Kay history. She has flailed around since, attempting to be a personal coach, a failed participant in multi-leve marketing company MLM Bellamora, a former “executive” for multi-level marketer Seacret Direct, and has been spinning her wheels trying to build a downline as a distributor for Seacret. (No wonder she stopped posting publicly about her Seacret stuff long ago!)
Time and again, a critical analysis of the numbers shows that almost everyone who participates in MLM will lose money, regardless of their effort. Even those who reach the top 2% of Mary Kay – – the sales directors – – aren’t making a whole lot of money. Even the most successful directors – – those in the pink Cadillac – – are making around $40,000 per year, if they’re lucky (and that’s only with 40 to 60 hour work weeks). Even with repeated hard work, sales directors are regularly failing to move up – – and are very often moving down – – while telling recruits that they can make as much money as they want and promote themselves whenever they feel like it.
But if you work hard enough and get lucky enough and make it to “top director,” you’re set with that executive income, right? Wrong again.
I was recently provided the Income Advisory Statement for a top director in Mary Kay. This woman is in the top 25 directors in Mary Kay in the United States. She is in the Circle of Excellence, and goes on the Mary Kay Top Director Trip. She has a number of rings and prizes that she has won. While the number for total income, including commissions and prizes of $150,000 looks impressive, a closer look reveals a different truth:
- Prizes totaled $50,000. While this sounds wonderful, the truth is that the value of many of the items appears inflated. And taxes must be paid on all of these prizes, at the inflated value.
- The commissions totaled $100,000. This is the actual cash in hand for the director, out of which all business expenses and income taxes must be paid. Remember that the taxes are at higher rate than if she had a real job, since self-employment taxes must be paid in addition to regular income taxes.
- The monthly commissions ranged from $4,000 to $12,000. Seven months showed commissions under $10,000. Three months showed commissions under $5,000. Even as a top director, there is no stability in earnings.
- Some months were so bad that this director owed a copay on her pink Cadillac. So much for the free car!
- After factoring in business expenses (including the office staff!) and taxes due on the net income (including prizes), this director had about $34,000 cash left over from commissions to support her family.
Let me repeat that: A top director in Mary Kay – – in the top 25 nationwide – – has about $34,000 left over from that big income advisory statement figure of $150,000.
This director ordered about $35,000 wholesale value of products from Mary Kay last year. Being generous, she may have profited $28,000 if she sold all of those products and sold most of them at full retail value. Taxes on the profit from product sales will eat up $8,000, leaving $20,000 cash from product sales to support her family.
So the big “executive” income for a director at the very top of the company leaves her with $54,000 cash to support her family, but only if she sold all those products and sold them at full retail prices.
Women will read this, and will say that they would be thrilled to earn $54,000. And while that may be a fine income for many people, the point is that this is the money in hand for a woman at the top of Mary Kay directorship. The top! And almost no one will reach this top 25 status. Sadly, in multi-level marketing, your success is not determined by how hard you work. There are 14,000 directors in the United States, and I’ve just shown you what one of the top 25 is making.
And make no mistake that this woman is working 60 hours per week or more. Mary Kay is not the “work from home” opportunity it’s pitched as. It’s a ton of hours, most of them outside your home and away from your family. To work this hard and get this high in the company, only to make middle management wages, is nothing short of disappointing. It’s the hard reality of Mary Kay.