Mary Kay Encourages Fraud

Written by Raisinberry

A revelation of the real business plan of Mary Kay Cosmetics… The fact that Mary Kay takes pains to invent the term “dual marketing” to disguise the business model tells you that even Mary Kay is embarrassed about being a multi-level “direct seller.”

Multi-levels and pyramid marketing scare off the majority of right thinking Americans, and rightly so. Pyramid schemes rely on the recruitment of people for income gains over the sale of the product. In fact the sale of the product is secondary if “going to the top” is your goal.

Think about your NSDs. They come into town with the primary function of guest events, and rarely do “free” workshops that focus on training directors or teaching selling. The training is supposed to be free, yet rarely is, at that level. Some require “qualifying” to be in their “space” for training. Advanced training is given only to those who have recruited and are at a higher “level”.

The consultant who wants to just sell better is a cast-off, relegated to learn on her own if she can find any on the art of selling (rather than recruiting). Rarely is salesmanship “inspected” by any director working with individual consultants. Directors know that unit production comes from new recruits, not improving the sales ability of the lowly independent beauty consultant by attending her classes, observing and offering suggestions. That’s just too much work for so little gain.

We are taught in Mary Kay to “inspect what you expect.” The idea is that if you take time to note or recognize any area of the business, it will become more developed. Funny how Mary Kay has NEVER “inspected” retail sales.

Every seminar year, a little trinket is given out by corporate for an intermediate level of recruiting. You need something like 7 people who have each placed a $600 wholesale order, to win it. There is no intermediate recognition for retail sales on the individual level.

The fact that Mary Kay does not want to legitimize the court of sales and the Unit Clubs by requiring documentation of actual sales (rather than just basing it on ordering) is a glaring admission that they don’t really want to know. If it was discovered that the vast majority of product purchased remains on consultant shelves until it becomes obsolete, Mary Kay would be a corporate laughing stock, and expose the truth of MK’s pyramid.

It has been said that people could fake the documentation of retail sales, so why should MK bother to try to verify it. Yet Mary Kay will still honor fake Unit Clubs calling them “Circles of Achievement, and Circle of Excellence” when the actual figures used, represent only the doubling of wholesale orders, bonuses and PCP orders, with no regard for retail sales at all.

A legitimate business would:

  • Record actual sales and award for actual achievement with retail customers.
  • Bring on new “hires” because of a need for new sales personnel in a particular area.
  • Not make an attempt to turn every customer into a “franchisee,” creating their own competition.
  • Not send mixed signals that from a Corporate standpoint, inventory is optional, while telling sales leadership that all their recognition depends on how many “stars” they have, how many issues they can use to create orders, how many monthly ordering contests they can run, etc.
  • Back up their sales force with adequate training, and consistent messages that promote the long term well being of the sales force in its entirety, “inspecting” to face the TRUTH of what is the result of their marketing plan.

Seminar is a gathering of thousands of consultants and directors, celebrating fraud. The company pretends to be rewarding the retail sales figures of thousands of units with no legitimate inspection of that fact at all. The consultants will be honored at their individual area nights, standing up in Top Tens with no “inspected” retail whatsoever, indoctrinating them into the “look the only way” club. It’s pretense and everyone, except new recruits, knows it. It’s not real, and never was. Much the way Mary Kay pretends to be a legitimate business and not a pyramid scheme, Seminar reflects that hypocrisy. Sales are fake, Recruits are real*.

Recruits are accounted for, sort of. They physically exist, with their $600 wholesale orders attached and confirmed. (Although no one really knows who coerced someone into letting them use their name and social security number, while paying for the starter kit and initial inventory for them.) A towering pyramid must have its base “inspected” on a regular basis, or it crumbles and falls… and  trendy little trinkets being given away by corporate for recruiting acknowledges the only achievement that Mary Kay Corporation must confirm and “inspect” the influx of new drones that metamorphoses other drones into hamsters. Salesmanship? Profitability of the sales force? Actual gross retail sales recognized and rewarded? Nope… nobody wants that inspection headache when it is so much easier to pretend.

*acknowledging an existent social security number

8 Comments

  1. Lazy Gardens

    If they reported things honestly and accurately, they would be out of business.

    It’s the pink smoke and fun house mirrors that keep up the illusion of success so the tippy top can keep on living large off the losses of others.

    1. TRACY

      Pre-Internet, I can understand how and why this worked. No one had a way to vet their claims, and they seemed trustworthy. But in this day and age, how can anyone believe this shit still works??? Oh… I see…. anything is POSSIBLE. Look at the women at the top. Yep. Possible. Nearly impossible. But that still means it’s possible. Uggghhhhh…..

  2. Robert

    My ex from years ago was a MK rep for a while. Her initial investment (that I paid for since I was the breadwinner) was some $4,500 for a huge pile of inventory. She painstakingly sorted and arranged all her pretty inventory on shelf in her office (that I built for her) and tried to sell. She held in-home parties and did trunk shows till her warm market dried up — it didn’t take long. She probably sold $500 wholesale of product in three months and didn’t sign up a single person. Of COURSE I knew it wouldn’t work. MK is a scam like all the other MLMs but she wasn’t having it. Fortunately I make good money so I could afford to blow $5k for her stupid lesson. I feel for people who can’t afford it. She finally gave up in the end but refused to let me send it all back to MK (which I understood was an option) because her upline was a good friend. In the end after she gave up, I sold her remaining inventory (some $4k wholesale) on eBay and recovered around $1,500. I was actually quite surprised it was even that much.

    1. MLM Radar

      Her recruiter/up line was a good friend? So I guess that makes you chopped liver. So sorry to hear that.

      If her friend wasn’t a Director then her entire commission chargeback on the returnable $4k was between $160 and $520. To “save” her friend that little, you had to eat $2,500. That’s just wrong.

      Everyone would have been better of if you’d returned everything and told your ex to write her a check to cover the chargeback. Not that the upline friend was entitled to it. She wasn’t because she didn’t really earn it.

      1. Robert

        Totally agree. But that was many years ago. Turned out I was trying to keep the peace for a marriage that died soon after anyway :-/. She was very profligate with my money. I mean, I made decent enough money, but not a 1%-er. Reading the stories on pinktruth is like therapy, lol! I recognize so much as a MK-hubby. I wished it was around during that fiasco with my ex and her MK “dreams”.

        c’est la vie………

  3. Ambiguity, vagueness, failure to provide demonstrable proof/omissions and painting a ‘rosy picture’ = a big fat red flag in my book. How will it end? It disturbs me that MLMs do not have more laws and regulations to recruiting and actual direct sales rates to protect those with little knowledge or skill to know what they are getting into.
    Did you know that in the real estate industry inflating and/or misrepresenting property is an illegal practice? It’s called “puffing” and you can read about it in this article that asks if vendors should be held to the same standards of accountability in their offerings: http://activerain.com/blogsview/2359140/puffing-is-illegal-for-realtors–is-it-okay-for-vendors-to-puff-or-misrepresent–
    Is there an attorney reading any of this that would like to explain why legal ambiguity exists that allows Mary Kay and others with similar inventory and recruitment structures to continue? Why for example are there no laws related to disclosure of activities related to contact to sales conversion rates with strict requirements related to recruiting to end these losing scenarios, make these disclosures required to be current and at all times accessible to any who ask?
    Oh, I think there may be some other reasons, to quote this old article from: http://www.siliconinvestor.com/subject.aspx?subjectid=10364
    “Out of all the MLM companies you’ve heard of, very few are public traded because the companies are a money machines for the owners. There
    are about 20 companies that fit this category. I’m looking for pure MLM plays
    but will not rule out Public Traded companies that just have a division doing MLM”

    1. Lazy Gardens

      “Why for example are there no laws”

      Senator Orrin Hatch, of Utah.

      His family members are neck deep in MLMs (mostly supplements and weight loss crap) and he is/was on the critical committees with the ability to make sure no meaningful reform happened. He also ensured that “supplements” can’t be regulated by the FDA unless they cause serious harm.

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