I submit that yes, the market is saturated with Mary Kay Cosmetics, and the chances of making a living selling the products are next to none.
Market Saturation: a term used to describe a situation in which a product has become diffused (distributed) within a market; the actual level of saturation can depend on consumer purchasing power; as well as competition, prices, and technology.
So in Mary Kay, the market is “saturated” when the people who can afford the product and who actually want to buy the product have done so. This is determined by market share.
Brand (or market) share: This is the share of overall ‘market sales’ taken by each brand. The results of Andrew Ehrenberg’s research have complicated matters further. He shows that – unlike the traditional view that customers buy just one brand – they actually buy a ‘portfolio’ of brands. Their brand loyalty is, therefore, measured in terms of the share of overall purchases over time, within that portfolio, held by the brand in question! The measure of share, and the concept of prospects, are important because they delineate the extra business that a producer can reasonably look for, and where he or she might obtain it. On the other hand, the evidence in many markets is that most business comes from repeat purchasing by existing customers.
So once your potential customer base has purchased the product, you have to depend on brand loyalty (for the most part) to keep your sales stagnant.
So here are some numbers on Mary Kay. (Let’s not forget that Mary Kay competes against pretty much every other makeup brand out there, including other direct sellers like Avon, Beauty Control, Jafra, and Arbonne.)
These numbers are from the U.S. Census Bureau website:
- Number of females in the U.S. (roughly): 157 million
- Percentage of people in the U.S. living below poverty level (estimate): 16%
- Number of females between the ages of 20 and 80 (roughly): 108 million
So let’s be realistic here and assume that women living below poverty level are probably not buying $100 worth of anti-aging products or even a $15 lipstick from Mary Kay. There are too many brands at Wal-mart or Target that can be had for $5 to $10. It’s safe to say that women in poverty are not a large part of Mary Kay’s “market share”.
But let’s be generous anyway, and say that there are 108 million women in the U.S. who might be Mary Kay’s customers (knowing that this is insanely optimistic). Here is just one competitor in 2006:
From Forbes.com: L’Oreal, the world’s largest beauty products company owns more than 20 brands, including Maybelline–the No. 1 selling mass market brand in the U.S., claiming more than 22% of the North American market share.
But let’s be insanely optimistic AGAIN, and assume that Mary Kay has NO COMPETITION from any other brands.
Now what do we have? Mary Kay is a pyramid/multi-level marketing scheme, so lets look at Mary Kas recruiting numbers:
- Mary Kay recruits 40,000 women per month. This came from their rebuttal to the FTC’s proposed restrictions on MLMs in 2006.
- With a relatively stable number of consultants in the U.S., this means that 40,000 women per month also quit Mary Kay.
Let’s hypothetically assume that MK has continued to recruit that many women per month since 2006. That’s 3.4 MILLION people recruited into MK, so that’s 4.8 million former MK reps in the U.S. alone in JUST the last 10 years.
How many former reps are loyal to the MK brand? Based on anecdotal evidence, I’d say not many. Maybe you still like the lipgloss, moisturizer, or whatever. Most of us aren’t loyal to the MK brand from head-to-toe, and most of us WON’T pay full retail for the products.
But what the heck? Let’s be stupidly optimistic, and assume that all the former MK reps in the U.S. still like to buy the products and pay full price! Why not? According to MLMers, ANYONE AND EVERYONE is a legitimate prospect, right?
Okay. 108 million American women between the ages of 20 and 80 MINUS the 700,000 current MK reps = 107.3 million potential customers. (Yeah right!)
That would mean that POTENTIALLY, with NO competition from other brands, NO poverty, and NO former reps who won’t pay full price, each consultant should be able to nab 152 customers!!! They should all be rich!! 152 customers?? Well, the market CAN’T be overloaded with reps then, right?? (This is assuming you only want to SELL to those 152 people, rather than recruit them onto your team).
Except how many of those 152 people will use MK exclusively?
And how much do women actually spend on cosmectics in one year??
And how on earth can the 700,000 Mary Kay reps in this country possibly expect to build a downline? The simple answer: they can’t.
And THAT, ladies, is why multi-level marketing sucks. (There are lots of other reasons, too, but this is one of the biggest.) Mary Kay sells unattainable dreams, and they encourage each new rep to buy tons of inventory, all to keep the pyramid from crumbling. And when the numbers get too dire, they just export the whole racket to another country.
The only people who got rich at this business are Mary Kay herself and the women who got in at the top of the pyramid.