Why Mary Kay Is Not a Pyramid (LOL)

In an effort to try and prove why Mary Kay Cosmetics isn’t a pyramid and isn’t like those other bad companies, the author of this document may have inadvertently done the opposite.

The Mary Kay legal department offered this document back in the early days of Pink Truth (then called “Mary Kay Sucks”) to help you understand why Mary Kay isn’t a pyramid scheme. But the questions this document suggested you ask should really be asked of Mary Kay! The truthful answers would be really revealing! It also made several assertions about the Mary Kay opportunity that seemed to fly in the face of reality. (Ex. You can’t buy your way up… Oh yes you can!)

This was a noble effort at proving why Mary Kay is better than other companies, but I wonder if you’ll agree with my opinion that it actually did a whole lot to prove that Mary Kay is, indeed a pyramid and a business scam.

Why Mary Kay Is Not a Pyramid or Multi-Level Marketing Plan

If imitation is the sincerest form of flattery, Mary Kay has many “admirers.” Over the years, Mary Kay has attracted the attention of many new direct selling companies, some of whom attempt short cuts or attempt to duplicate elements of our program. They may not have the resources to develop a quality product line that can sustain a broad consumer base, they open with a big recruiting promotion with dubious claims, reach a peak quickly and end up battered by regulatory investigations or in bankruptcy. Many lack the retail product sales to support their commission structures, which eventually causes collapse. The following comments are intended to help you sort fact from fiction, it shares our facts, and it will help you as you are asked questions about your business.

“If It Sounds Too Good To Be True, It Probably Is!”

“Once in a lifetime opportunity!” Ground floor, window of opportunity. A legitimate business should be as good next year as it is this year. Your company has a 40 year growth record, stability, and financial security.

“Make up to 25% Commissions!” This pales in comparison to a Consultant and a Director’s earnings. Ask them how many levels of recruits must one have to earn that commission percentage.

“Make $40,000 monthly in your spare time!” Maybe a lottery ticket, but rarely at the beginning of a business. Look at how many people are earning that kind of money, how many recruits would one need to earn that amount, what can a beginner expect in the first year or two?

“You don’t have to sell anything! Just recruit.” Legitimate companies base their businesses on actual product sales to consumers. Pyramid schemes pay a “bounty” for signing up new recruits. The pool of new recruits eventually dries up. Retail sales are key to supporting the commissions and incentives. Often, women are left to package the products and men are the ones to recruit. Also, they will give their organization a different name from the parent company or will not clearly invite you to listen to XYZ’s company presentation, for fear that it is a “turn-off.” We are proud of and always say who we are and what we do.

“Revolutionary New Products!” Words such as “leading edge and natural” can be inviting, but few ingredients can be 100% natural or new. Does the company manufacture its own products under its own control or does it rely on outside contracts? Can all claims be substantiated? Is there a 100% satisfaction guarantee?

What the Terms Mean

Multilevel: A marketing plan with several tiers of participants through which products and commissions pass. Only those at the top buy directly from the company.

Participants “downline” purchase products from “upline” distributors. The discount is determined by a person’s level in the organization.

Network Marketing. A recent term, may have been coined to counteract multilevel. You “network sales through an organization of recruits rather than through personal
efforts.

Pyramid. These are illegal. Large numbers of people at the bottom of the pyramid pay money to a few at the top for the chance to advance to the top and profit from payments of others who might join later.

Career Path. Some companies claim we are “saturated.” This year alone, almost 40 women became National Sales Directors. There is plenty of room at the top for women who possess the commitment, drive and willingness to work. There are rewards and recognition at every step of our career path, not just at the very top.

Product Quality. We have been the Best Selling Brand in America for 9 years and intend to remain so because of the generation of new young women beginning to use our products and because of the millions of dollars invested in our manufacturing and distribution centers. We manufacture almost every product ourselves to assure the highest standards of quality. Product safety, customer satisfaction, guarantees and programs are in place to insure customer loyalty for years to come.

Review
Mary Kay’s business is selling products, not “business opportunities.” We are not in business to recruit women to buy products from us, but to buy and sell for herself. No “investment” is required, only the purchase of a showcase. No sales force position may be “bought” by the payment of fees or the purchase of large inventories.

Everyone begins the same way, as a Beauty Consultant and advances solely on the strength of her recruiting and sales abilities.

There are no levels of wholesalers between the company and consumer. There is only one wholesale sale from the company to the consultant and one retail sale from the consultant to the customer. Everyone, regardless of her status in the sales organization, purchases products directly from the company based on the same discount schedule, for resale to the consumer.

Mary Kay guarantees in writing that any consultant who terminates her relationship with the company may return any new and unused products purchased within one full year prior to return and receive a 90% buy-back, unlike some companies that either offer no buy-back or 30, 60, or 90 day offers.

All commissions are paid directly to consultants and directors. In many other companies, checks are written back and forth from the distributors, and no relationship is present between the main company and its distributors until a certain size organization is gained.

The Mary Kay Legal Department can assist you with any concerns!

16 Comments

  1. Kristen

    “Career Path. Some companies claim we are “saturated.” This year alone, almost 40 women became National Sales Directors. There is plenty of room at the top for women who possess the commitment, drive and willingness to work. There are rewards and recognition at every step of our career path, not just at the very top.“

    This is a red herring argument. 40 new NSD’s? So what! Show me demand for Mary Kay products or cosmetics in general vs. availability. Becoming an NSD just means enough people under you bought enough inventory which may or may not have been sold. Saturated market means there is more product than customers who want to buy. Rewards and recognition have zilch to do with market saturation. If they mean saturation in terms of no fresh meat to recruit, I don’t know the stats on that. I’m sure Tracy does. But then, resale to the outside market is irrelevant if saturation is only about the ability/inability to recruit.

    1. Mountaineer95

      That statement about room at the top for more NSDs made me wonder about something, but it requires the use of mathematics and is thus well beyond my capabilities; maybe one of you can help? I wonder how many NSDs could exist if we count the entire earth’s population as the amount of bodies available to fill in the necessary downline requirements, and compare that number of NSDs to the number of estimated participants in MK to see where the percentage falls. Or maybe just do US if we don’t have international figures.

      I hope that makes sense. Like (and these are totally made up numbers, I’m trying to create an example): the population of the US has enough bodies to fill, say, 300 NSD positions, and if there are 30,000 MK participants in the US, then if every living person in the US was recruited into MK, still only 1% of them could reach NSD before we run out of people.

      Something like that.

  2. NayMKWay

    How do I deceive thee? Let me count the ways…

    1. If THEY say “ground-floor opportunity,” that’s bad. When WE say “everyone starts at the bottom,” that’s good.

    2. If THEY claim they’re not MLM and adopt a different name, like “network marketing,” that’s bad. But when WE claim we’re not MLM and call it “dual marketing,” that’s good.

    3. If THEY make outrageous income claims, that’s bad, but when WE claim “executive income for part-time work,” that’s good.

    4. With THEM, only a handful make it to the top level. With US, nearly one in 100,000 make it to the top level EVERY YEAR! Wow!

    5. If THEY claim to have “revolutionary new products,” that’s just marketing fluff. When WE say it, um, trust us, OK?

    6. If THEY encourage you to buy lots of inventory you don’t need, that’s bad. But when WE say “you can’t sell from an empty wagon” and imply buying more inventory is to your advantage with terms like “success levels,” that’s good.

    I’m sure you’re all convinced by now to join Mary Kay and amp up your success level with a great, big wagon of goodies. It’s not like your recruiter gets rewarded when you do, because that would be a bonus for signing people up, and that’s bad, remember?

    Hugs and Kisses,
    Mary Kay Legal Dept.

    17
    1. Char

      “Multilevel: A marketing plan with several tiers of participants through which products and commissions pass. Only those at the top buy directly from the company.

      Participants “downline” purchase products from “upline” distributors. The discount is determined by a person’s level in the organization.” —

      I’ve seen this written several times by consultants when explaining why MK isn’t an MLM company. Can they all agree that Amway is an MLM company? Okay well, here is how Amway operates:

      TOOLS TO MANAGE YOUR BUSINESS
      Amway makes it easy to work on your own terms. We provide you with resources to get started quickly and run your business from anywhere. Use your mobile device to order products, track sales, access free education courses and much more.

      IF I SELL AMWAY™ PRODUCTS, DO I ALSO HAVE TO STOCK INVENTORY?
      In a word, no. Our Independent Business Owners (IBOs) don’t need to carry product inventory and there are no purchase requirements with Amway – not ever, no exceptions.

      Instead of stocking inventory before they begin selling, our IBOs rely on Amway to efficiently and affordably ship products direct to themselves and their customers. However, some IBOs may keep their own inventory for customer events or to demonstrate products and have them readily available for purchase. As entrepreneurs, it’s 100% their choice.

      Also, here we have Amway grouping itself with Mary Kay:

      WHAT IS DIRECT SELLING?
      As its name states, direct selling is direct, person-to-person sales. This entrepreneurial business model empowers individuals to start a business with little startup costs and no experience required.

      Direct selling makes business ownership accessible to anyone. As distributors, these independent business owners earn income by selling exclusive products in-person or online. Many increase their income potential by sponsoring and mentoring others to join their team and do the same.

      In 2016, 107 million people worldwide were involved with direct selling, driving more than $182.6 billion in direct retail sales. Based on 2016 revenues, Amway™, Avon®†, Herbalife®†, Vorwerk®† and Mary Kay®† are the top five global direct selling companies.

      †Avon® is a registered trademark of Avon NA IP LLC.; Herbalife® is a registered trademark of Herbalife International, Inc.; Vorwerk® is a registered trademark of Vorwerk Elektrowerke GmbH & Co.; Mary Kay® is a registered trademark of Mary Kay, Inc.

      *************

      What is “direct selling”? The reality!!! The COMPANY sells directly to people who ‘think’ they are business owners. This is merely a sales and marketing strategy for THEM. They jack
      -up the price, yes the “wholesale” price, and then provide kickbacks to encourage buying.

      Amway, Herbalife, and Mary Kay are all worth billions, and they are making bank on people buying direct from them. The people making the company rich are dubbed: business owners, consultants, directors, diamonds, a sales force, and homecoming queen. It really is that simple.

      Mary Kay is worth billions, debt-free, and provides its employees with benefits. Where is the money coming from?! And where are all the products they’ve sold to their consultomers? Just watch a video of a consultomer with shelves of product, and you’ll have your answer.

      Mary Kay does not track resales by consultants to non-consultants. Mary Kay does not require proof of resales to non-consultants. All things suggest that consultants are the real customers.

      It’s a very elaborate con game; I’ll give them that. Imagine turning the victim into a willing-victim and making them complicit participants in perpetuating a con game. Good job.

      1. Mountaineer95

        “Mary Kay is worth billions, debt-free, and provides its employees with benefits. Where is the money coming from?! ”

        This, this, THIS! I don’t understand how thousands of women don’t question this! The corporate employees’ salaries and benefits have zero to do with whether one single MK item is ever resold from a consultant to an (imaginary, in MK) end consumer! Corporate isn’t calling Chelsea or Ali every day to see how much of the inventory they’ve already purchased at “wholesale” has been sold to customers in order to ensure that Corp is achieving its quoted assumed “retail sales” to determine Corp employee paychecks. Corp structures their payroll, salaries, benefits, bonuses…EVERYTHING…based on inventory orders only. Why is this such a hard concept to drive home?

  3. Cat Ballou

    ‘Mary Kay’s business is selling products, not “business opportunities.”’ 🤣🤣🤣

    I signed up as a personal use consultant. I made it clear when I signed up that I would not recruit or carry inventory. I went to my director’s new consultant training, thinking I would get instruction on navigating In Touch, or an overview of product lines. Instead, this meeting was all about how to sell the opportunity, and how to turn no into yes. I did not go back the next week.

    My director’s favorite line seems to be “I make time for those who make time for me.” Well, guess what, lady, my time is valuable too. If she can’t respect that, I don’t have time for her. Now I only hear from her at the end of the month when she’s short on orders.

  4. TRACY

    “Legitimate companies base their businesses on actual product sales to consumers. Pyramid schemes pay a “bounty” for signing up new recruits. The pool of new recruits eventually dries up. Retail sales are key to supporting the commissions and incentives.”

    Do they realize how stupid they sound. Nothing in MK is based on actual product sales to consumers. It is all based on what consultants order, regardless of what they sell. ORDERS support commissions and incentives, and MK Inc. knows it.

    1. NayMKWay

      I think they do realize how stupid they sound, but like all liars, they think if they say it enough times, people will believe them.

      Or maybe they’re just satisfied to fool some of the people some of the time. After all, there are still some Kool Aid drinkers left, writing letters you kindly share with us on Fridays.

      1. Juliet

        What is funny to me is that mk does sell direct to consumers who believe they are business owners. A dog is a dog even if you call it a chandelier lol. Trouble here is that a real business owner may purchase from large entity and then passes those goods to a group of others seeking that specific arrangement of items and may even use them in their own line of business selling to others and so on. With mk, it stops at the buyer far more often than moving on to anyone else.

  5. RiaJaize

    Look at their definition of MLM — downlines buy from uplines, not directly from the company. I’m not sure many MLMs have that structure. And it doesn’t matter anyway because commissions are still based on orders, not sales.

    1. Char

      They don’t have that structure, but many consultants wrongly suggest it. See my post above about Amway being exactly like Mary Kay. And you’re right, commissions are based on downline ORDERS – not sales to non-affiliates.

      Have you ever heard the “pyramid schemes don’t have products” baloney? That’s another misnomer. Endless-chain recruiting, product-based pyramid schemes absolutely do have products. See Amway or Mary Kay. Lol.

      1. NayMKWay

        I know that decades ago Amway used to make the downliners buy from their uplines (it was described that way in “Merchants of Deception”), but not even Amway does that anymore. I don’t think they or anyone else were doing it when MK Corp published this tripe.

        I am shocked—SHOCKED!—that Mary Kay wold make such a misleading statement. And from their legal department, no less; that paragon of virtue that believes only in justice and fair play.

  6. Char

    “Mary Kay’s business is selling products, not “business opportunities.” —

    – Are you interested in an opportunity to sell products?
    – Perhaps you also know of some other people who would be interested in an opportunity to sell products?
    – My upline told me about this opportunity to sell products, so I joined.

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