Changes at Mary Kay Inc.

Lots has been going on at Mary Kay over the last couples of weeks. It’s time to review and drop some new (but exciting!) information about Mary Kay. (Scroll to the bottom for the new information.)

1. False income claims continue at all levels of the sales force. Sales directors and NSDs should know better, but they still lie about how much women make. From the “50% profit” lie to lies about the “average earnings” of various levels in MK.

Here is sales director Rachel Ryan lying about a new consultant “making half” of what she sold:

2. Mary Kay is in the process of shutting down distributions centers around the country and will be finished with the process by July. The closed distribution centers will include California, New Jersey, and Chicago. 200+ jobs are being eliminated as a result.

3. Restructuring is in process at headquarters. Sean Key (VP of Sales Development) and his Field Support Team were eliminated. Additional changes and job eliminations at corporate are rumored to be coming, but the details are under wraps.

4. Mary Kay abruptly shut down the markets in Australia and New Zealand. No word on whether other markets are on the chopping block.

5. All career conference locations have been canceled. The excuse is coronavirus. I’m sure the poor attendance played a part too.

New Information:

1. All employee bonuses have been eliminated. In the past, employees received a “performance bonus”  and profit sharing. It appears both of these will not be paid. The stated reason is the fact that global sales have been flat for several years. The markets in China and Latin America have been propping up sales (since markets like the U.S. have been in decline for a decade), but the foreign markets are now declining too.

2. In the May/June timeframe, Mary Kay Cosmetics will be announcing a change to the executive structure. A new upper level executive is moving to the United States permanently from overseas. No word on which C-level executive is being replaced by this person.

3. Mary Kay eliminated its entire Risk Management Department about a year and a half ago. The company’s Chief Supply Chain Officer was terminated amid allegations of fraud. Add the recent changes in the area of sales development, and you are getting the picture that the company is in financial distress. MK is still profitable, but far less than before.

It seems Richard Rogers and company see the writing on the wall about the MLM model. It’s no longer so easy to recruit and frontload inventory. Getting new recruits to buy inventory packages of $600 to $3600 is literally the lifeblood of the company. And those numbers are falling. Fewer recruits, and more importantly fewer (and smaller) initial inventory purchases as consultants realize this makes no economic sense for them.

I’m looking forward to see how this unfolds!

54 Comments

    1. Emmapeelfan

      If it’s anything like my company’s RM team, they handled things like allergic reactions and/or product safety issues from customers that could cause the company legal headaches.

    2. MLM Radar

      Being an auditor myself, to me “Risk Management” means managing and enforcing internal controls over finances, operations, and quality. The external stuff is handled by lawyers and insurance companies.

      They got rid of the internal watchdogs! Let the plunder begin!

  1. Patty

    I’m thinking they will need to make a decision on how they distribute their product. Maybe they are considering going into stores like Ulta and online and sell directly to consumers. Would make sense in this country, the MLS model is just dead at this point I believe.

    1. Char

      What customers? Okay, maybe there are a few non-affiliate paying customers, but not as many as you think. That is the problem with MLM. You have people buying the product because of the “opportunity”, or people helping out friends/family in it for the opportunity. Ulta would be an idiot to take shelf space without a measure of true retail consumer demand.

      1. morningstar

        Spot on. Check ebay for mary kay items. Then check ebay for that same item you purchase elsewhere such as Sephora and/or Ulta etc. I guarantee you there are less kat von d eyeliners on ebay than mk eyeliners.

        1. Abby

          Kat Von D eyeliners: 300
          Mary Kay eyeliner: 1,124

          And I bet a lot of the Kat Von D products are from people who do this for a living by buying up items on sale/clearance and selling them for a profit.

          1. Mountaineer95

            Actually the Kat Von D sales are likely related to the huge sell off that her old company is doing: she sold it and the new company is KVD Vegan Beauty (or something similar).

            Sephora is heavily discounting all Kat Von D-labeled product to make room for the new product with the new company’s labels. Sorry for the long winded response, what I’m trying to share is that, using the KVD product sample from eBay to compare with MK, it makes MK look even worse now that we know that Kat Von D products are on clearance everywhere.

        2. AndésAngel

          The risk of buying ANY makeup or skincare item on eBay is that it could be expired or heaven forbid counterfeit.
          I get your point but with what’s been going on in the world – I’d rather buy my product from a trusted store so I know it’s authentic and not expired.

      2. J

        Even if they magically got on the shelf, the cosmetic industry is so competitive that I genuinely don’t think mk could hold onto the shelf space. That, or people would complain about the trash on the shelves.

    2. TRACY

      Remember that MLM is never about the product. It’s all about recruiting, and the product is what we pretend is the thing. There is not a sufficient customer base (I mean real, 3rd party, non-consultant customers) to sustain MK.

      1. NayMKWay

        But what about this quote?

        When asked by 20/20 how Mary Kay knows “… that the product isn’t ending up in people’s basements,” Laura Beitler replied:

        “Oh, trust me Rebecca. We know that women love to buy Mary Kay products over and over again.”

        In dodging the question, Beitler evinced her firm belief that women everywhere just l-o-v-e Mary Kay. So they should be able to compete just fine at Ulta or Sephora, right?

        Right?

        Why do I hear crickets?

  2. NayMKWay

    “A new upper level executive is moving to the United States permanently from overseas.”

    It looks like Mary Kay believes they must concentrate on foreign (language) markets to survive. Anyone who can read English and can do a simple web search is going to be scared away from this outfit.

    Remember when the Kaybots were sneering at Pink Truth and predicting its quick demise? Hah! Tracy, I’ll bet you feel really good right now, and you certainly deserve to.

    And to the readers here who are still involved with Mary Kay: get out while you can. What you’re witnessing are not strategic decisions in an evolving market, they’re desperation measures in a dying company. Take advantage of the 90% buy-back now, before they run out of money and declare bankruptcy.

    1. TRACY

      I’ve always been accused of “trying to take down Mary Kay.” That was NEVER the goal. The only goal was education, and yes, part of that included exposing MK’s nonsense at a corporate level. I remember when MK Inc. was just going to wait us out. That Pink Truth would go away like all the websites eventually do. Nope, we’re still here, and we’re watching with great anticipation.

      1. morningstar

        Too much gaslighting, too many smoke and mirror tactics. Got away with it due to society norms in the last decades. Social media hit the scene, and as a techie and in MK I was in anticipation of the great internet marketing roll out, that would certainly make MK sales catapult. Corporate dropped the basic, Sean Key told me to my face they could not source the ingredients (my engineering BS meter went off – big time), as this is amid a cosmetic explosion in the general market place. I always got the feeling Richard Rogers had a guilt complex and would not change the company his mother started. Wrong- it is greed complex.

        Pink Truth has been a sanity check for me, and it and everyone here are a big part of my life lessons. Thanks for keeping it real, when MK was trying so much to keep it unreal.

        1. Cheryl

          Just a word on distribution centers, Mary Kay closed their California center, but just opened a new 72,000 square foot center in Reno, NV. That tells me that the taxes and regulations in CA were too high and restrictive. Business’ moving out of CA is a pretty common occurrence now. But that also sends a message that MK needs to cut costs.

  3. Flabbergasted

    The MlM may be dead for some companies, but I think that depends on how good the product is, or isn’t, or if its a new and trending company, or old, and been around to long company.
    I’m giving MK a year trial (started summer 2019). So far I am not happy, with the way my group runs things. I’m not happy with very many of MK products. I keep getting allergic reactions, especially if I have used the product for a while. At first I loved their liquid eyeliner pen. But now, as the bottle gets used more, I’m starting to get itchy, after wearing it for an hour. ?? I do have sensitive skin, to makeup, and skin care. So now i am on the search for a good liquid eyeliner pen. 🙁
    Even cheaper brands have proven better then MK. Biore facial cleanser, biore facial cloths, are very affordable, and superior quality, compared to all mk’s cleansers.
    Covergirl Outlast lipstick, outdoes any of MK’s lipsticks. In colors, quality, staying power, and price.
    These next brands are comparable in price, but way better in quality. Amorepacific has the best treatment facial toner. Anastasia Beverly Hills has the best glittery lipglosses. Smashbox best facial primer. Urban decay best finishing spray. Marcelle has a really good cc stick for covering black circles, and marks, (it even helps shrink acne). Dior best eyelash primer. Lacome best hypnotic mascara. Hempz best Shampoo & Conditioner, body wash, body scrubs, and body/ hand lotions.
    Bath and body Works has the best hand soaps.
    Mary Kay does have really good eyeshadows. Easy to use, blend, mix and match. Morphe eyeshadows are great to use as a eyeliner on bottom lid.
    There are way better brands out there, then the products Mary Kay is manufacturing. Which makes it extremely hard to sell Mary Kay products. Add onto to that Pushy, aggressive, stalking, lieing, manipulating, sales ladies, MLM, and no one wants to even try Mary Kay products.
    All this, is why MK is not doing as good in 2020.
    But people still go crazy over new things. There is a new MLM out. MASKCARA. Its packaging looks cheap, but has cool pictures. Its product looks cheap, not good quality. Fenty Beauty Trio stixs, are tens times better, in all directions. Quality, user friendly, price. They market their uneducated Consultants as “Makeup Artists”. Which is misleading, a lie, and an insult to Real, Trained, Certified, licensed, Makeup Artists. But Maskcara suckers in naive clients, especially ones who do not know much about makeup or skin care, at all. Right now everyone is going crazy over this company. They are having a hard time keeping up with their stock, and filling orders. Its a MLM. But does not require its Consultants to purchase inventory.
    So people are still being sucked into MLM’s.

    1. MLM Radar

      An MLM that doesn’t require you to purchase inventory isn’t a better MLM. It just uses an alternate method to empty your wallet.

      No-inventory MLMs generally require you to make subscription purchases to get a discount. The more you and your down line purchase, the bigger your discount. Eventually you wind up with as much unused product on hand as you would have bought from a regular MLM.

      The next problem appears when you try to reduce or stop the subscription. The company that was more than happy to take your credit card information suddenly has no one available to process your “slow down” request.

      You may need to cancel your credit card to stop the MLM subscription auto-ship. But that won’t stop them from trying to ship and bill you anyway. Heaven help you if you used a debit card or bank account direct debit.

    2. NayMKWay

      “The MLM may be dead for some companies, but I think that depends on how good the product is, or isn’t, or if it’s a new and trending company, or old and been-around-too-long company.”

      Whether or not MLM is dead for some companies but working for others is immaterial to how we should respond to them. Multi-layer marketing is exploitive and predatory by nature because of one root principle: endless-chain recruiting.

      A new MLM may have success for awhile (see: LuLaRoe), but with unlimited recruiting, you end up with way too many representatives selling to too few customers. Does the MLM company care? They do not; all those reps are forced to buy product to stay “active,” which is how the company thrives. The reps ARE the customers.

      Retail sales may keep MLM companies legal in the eyes of governmental authorities, but that does not make them moral. Look at MLM company reports of gross sales versus number of reps (if you can find them), and you’ll see that most average out to between $1,000 to $2,000 per year per rep. The average rep isn’t making more that a few bucks a week before expenses, if that. (And don’t forget: those averages include the handful at the top pulling in the big bucks with their huge downlines. For every one of them, there are hundreds making next to nothing.)

      In this context, it’s clear that “old and been around too long” can be a matter of months to a handful of years. It depends on how long it takes for the market to get saturated with reps. With LuLaRoe, it took less than a year. Pink Truth had articles criticizing LLR a few years ago, and some reps wrote in saying how well they were doing and how they were quitting their jobs to sell LLR full-time. Meanwhile, LuLaRoe was signing up new reps at a furious rate, quickly saturating the market and leaving many financially devastated.

      Do you think Mary Kay has only recently reached the point where their business model no longer works? No, it has been like this for many decades: too many sales people and too few customers. The company has survived only on the false promise of “executive pay for part-time work” because truth was easier to obfuscate pre-internet. Some are still taken in, but their numbers are dwindling, and times are getting tough in the MLM industry. They have been concentrating more on overseas markets (like China and India) where word hasn’t gotten out yet.

      “Char” (active commenter here and at other anti-MLM sites) has repeatedly made the point that MLM should not be looked upon as something that “works for some but not for others.” It is rather an immoral act like drug dealing or white slavery: it makes a few rich while royally shafting many others. It is inherently evil.

    3. Mountaineer95

      “…All this, is why MK is not doing as good in 2020.”

      The only reason(s) you give for WHY MK is not so good in 2020 are based on MK products (performance, cost, value, etc).

      You’ve missed the single biggest reason why MK is not so good in 2020…because it’s a pyramid scheme.

      And a product-based one at that. Your post illustrates how this MLM company uses product to hide its true focus (recruitment). You’re so hung up on product issues, failures, and comparisons that you cannot see the real reason for MK’s decline: IT’S ENTIRE BUSINESS MODEL IS A STANDARD PYRAMID SCHEME STRUCTURE INTENDED TO BENEFIT THE SMALL GROUP OF OWNERS.

      There’s nothing wrong with MK products, they’re performing just fine…because their only purpose is to make money for the owners. And they’ve been doing as much for many years.

  4. enorth

    “the writing on the wall about the MLM model.”

    In general, there’s a growing backlash against MLMs. People are getting smarter.

    For those foolish enough to still want to join a MLM, it won’t be Mary Kay. Not when there are new MLMs starting every day, giving people the opportunity to join “on the ground floor”, not a 57-year old company selling unremarkable products in a saturated market.

    1. NeverAgain

      A person who is part of a gardening facebook group I follow wrote about going to a Pampered Chef party, which gave her the idea of a gardening party format where seeds and tools are sold. Sigh. My response was that t would be fun to have a plant and tool exchange without the mlm model so we wouldn’t have to worry about selling or recruiting.

  5. morningstar

    Hopefully – everyone can view that MK does not provide dental insurance that covers teeth cleaning for directors.

    And lovely slip she is wearing under her professional MK attire is missing from the picture.

    I usually do not critique people for how they look (in the world) however this is a MK director – supposed to be slammin’ at all times. Which does take extra money for personal upkeep.

    Thank you for this great information!

  6. BestDecision

    More smoke, more fire. KT Martin is now coaching people. I think she was a Trip Director, but the March Applause has her unit doing about $20,000 wholesale in November.

    Another interesting fact is that the new April Applause no longer has unit retail production or Director commissions listed for the Top 500 of each. They have the NSDs, but that’s it.

    As of December, there are only 6 NSDs on target for Inner Circle when there’s normally about 13.

        1. TRACY

          I think it just happens to be the copy she has. She may have removed those pages herself, or may have gotten an incomplete copy. There was an issue she had last year that had the same problem… missing the pages of director and consultant recognition. I’m hoping someone else will come up with a complete copy.

      1. NayMKWay

        Hey there I’m K.T.! I pretended to be a millionaire with a six-figure income for years. That didn’t work out, but I learned I’m pretty good at manipulating people, so I thought I’d try making a career of doing that! Sure, I live in a crappy 700 square foot shack that barely has internet access, but with my manipulation skills, I’m able to convince you that this is by choice rather than forced upon me. Wouldn’t you like to learn how to “fake it till you make it” on a professional level? How to make the collapse of a pretend business sound like God’s blessing instead of the result of my poor life-decisions? Then sign up now!

        P.S.: Please try to ignore my freaky upturning big toes. They just do that, OK?

        1. Mountaineer95

          Hahaha I noticed the upturned toe and thought how similar it is to my freakish feet, which are weird including that toe thing, due to a hereditary disease I have…I don’t know whether the possible hereditary disease connection makes me more sympathetic towards her, or more suspicious of her, lol.

    1. NayMKWay

      It’s the Amway Tools Scam rewritten in pink. Word is the Amway apex dwellers take in as much or more selling CDs, books, conference tickets, etc. than from commissions on overpriced products. There can be little doubt the MK NSDs and former NSDs are well aware of this.

  7. alurker

    Are there external sources reporting on all these staffing changes? Would love to read that and see some more details. So interesting. I heard Luis Garcia got fired on the top trip last year and was sent home because he said or did something that Bietler didn’t like.

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