Market Saturation and Mary Kay

market saturationA common question about Mary Kay Cosmetics is, “Is the market saturated?” Here we explore the real market for the products and whether or not Mary Kay is a viable business opportunity

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.

And in another article, there is no mention of Mary Kay amongst the more popular brands listed.

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.

19 Comments

  1. Iescaped

    After I had left Mary Kay I realized one very important fact. They had turned off my ability to reason.

    What? How? Why?

    Well it was actually very simple and very subtle. From the moment you join and start “showing up to go up” you are gradually spoon fed little bits of information that your SD or NSD want you to believe.

    They want you to think that MK has 10% of the market (never are you shown any REAL evidence of this), they want you to believe that MK has the highest brand loyalty (again no proof) and they keep you in the dark about the location of current and former consultants.

    Everything that you can think of asking has already been asked over the past 50 years. The answers to your questions come out of SD/NSDs mouth quicker than an internet search. And because of this, you are slowly put at ease. You quit questioning and start working. You believe that your success is up to you. All of your former logical thinking is slowly eaten away and replaced by Pink BS.

    I live in a town with a population of less than 14,000. Within 5 miles of my house there are 7 SDs and one NSD. Why in all that is Holy and Good did I ever think that this would work?

    Ugh!

    1. MLM Radar

      Worse, when you believe your success is up to you, you also accept the flip side of that statement: You believe that your failure is your own fault.

      The truth: Your failure is guaranteed. It is NOT your fault.

      You have no chance to succeed by doing Mary Kay honestly. The only way to “succeed” is by becoming a liar yourself. Fake it ’til you make it. Recruit and frontload. No negativity.

      It’s all lies. Even if you “win” you lose!

  2. Lazy Gardens

    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!!!”

    Wow, 152 customers … and that’s only if no one recruits anyone ever again.

    That math ^^up there^^ is why MLMs are doomed to fail. They don’t make sure that the supplier numbers don’t outgrow the ability of the population to support them by buying product from them.

    REAL franchises won’t let you open a franchise if it will undercut the existing ones. They do market studies to make sure the area can support the proposed expansions.

    1. Iescaped

      Companies that have franchises also do not hide or withhold information.

      If you are looking to buy a franchise, you will have more facts, numbers, and statistics then you know what to do with.

      The success of the company is directly tied to the success of the franchises. While in a MLM the success of the company is tied to the independent contractors failure:)

  3. onelessSD

    Excellent article! Here it is ladies and gentlemen… in black and white… why this model doesn’t EVER work long term. It may work for short time- but long term, you are guaranteed to fail. Like you Iescaped… many consultants, directors and an NSD in my small city… competing for those same customers… and because I’m not that great at lying… I moved at a much slower growth rate in MK. (I now believe that is a blessing… I can only imagine my life **shudder** if I was better that lying.. how deep in pink would I still be?!)

  4. cindylu

    Keeping the number of consultants/directors/NSD’s secret works only for the company’s endless profits. They don’t care if you can’t sell the products as long as a director is demanding you continue to buy their ever changing product lines. Also they don’t allow you to properly advertise because you would soon see an endless list of ads etc. everywhere in your area. That would mean too many of their sales force waking up to the manipulation that has been going on for decades now.

    1. gotheart

      Also they don’t allow you to properly advertise because you would soon see an endless list of ads etc. everywhere in your area. That would mean too many of their sales force waking up to the manipulation that has been going on for decades now.

      Thanks cindylu.
      Of course that is the true reason.

  5. Pinkfreesince2015

    It’s so funny that this is the article today especially since Sean Keyes just posted the following to his Facebook about the career conference luncheons. Guess they can’t hide it much a anymore.

    This is the last month to qualify for this contest and I’m shocked at how few have already qualified for the Career Conference Luncheon. At this rate, it’s going to be an exclusive, intimate gathering. Lol! Seriously, this can be done by the weekend!!! I’m attending Provo & Riverside Career Conferences and I expect those two locations to have the most qualifiers!! You can do this!

  6. juliegal7

    I went out of MK in 1984 . Thank goodness because I had to move to another State, but my downhill slide in MK began 2 years prior to that. I’m so glad MK’s not working out for me wasn’t my fault, thanks to info. I’ve read on PT! — I got so sick of hearing “fake it until you make it.” That’s all I did, faked it because I got little or no training. Like, what else is new?

  7. Pauline

    I would like more information on how the early recruits got to the top of the pyramid? Was it because Mary Kay Ash ran an ad for sales women and paid them to sell and recruit from the start? You say in your article that the only ones who got rich were Mary Kay herself and the women who got in at the top. Can you explain to me, a former Director from the 1980’s, how these early women got in at the top. Thank you.

    1. Lazy Gardens

      They were the first ones to join the business, so they had a totally EMPTY field for themselves and their first few layers of recruits. No one else was doing a Home Party Cosmetics MLM business.

      Also, fewer women worked, there was no Internet to buy things with, may drugstores did not sell cosmetics, supermarkets didn’t sell cosmetics … way less competition. You could actually make MONEY selling Mary Kay.

      By the time things started slowing down, they had HUGE downlines and could basically coast on the efforts of the people trying to make it to the top.

  8. gotheart

    When I got my first original bright idea while in MK, to research the number of beauty consultants and sales directors in my area I called the company. I’d just moved into the area.

    “We don’t give that information out.”

    I was stunned with their lack of help.
    That started me wondering, why.
    Five years later I returned my product.

  9. Mia

    Everyone else has completely covered wonderful points about why pink is putrid.. So I’d like to toss out that women who do regularly spend $20 on a lipstick, or +$100 on skincare is often the kind of person found on MakeUpAddiction and similar communities. These women purchase real mid/high end brands (What you could find sold out in a Sephora).

    The amount of people who want full priced Mary Kay products that aren’t pressured into sales by desperately starving IBC’s is practically nill. Yes, a few are out there, but… so rare that it can’t possibly justify how many “MK Ladies” there are.

    I got out when I realized I could buy my way to Star status and suddenly sit at the big girls table and be talked up about my recruiting capabilities. Luckily I had someone else to dig me out of the big pink hole and I quit shortly after buying 3,500$ worth of shit that I ended up giving away or just tossing. Surprise, I had absolutely no one in my potential customer pool that wanted Velocity.

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