A 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 and Arbonne.)
There are roughly 165 million females in the United States. We previously calculated that there are maybe 102 million women who would consider buying Mary Kay products. You have to consider all the millions of former MK consultants who want nothing to do with the company. And the women who have already tried the products and don’t want to use them. But let’s be optimistic and leave everyone in.
There are about 450,000 MK consultants in the U.S. That means there are at most 226 potential customers per representative. Except there is competition from a zillion other brands. How many of those 226 people would use MK consistently and for a long period of time? How much will each person spend? How can a consultant build a downline that will earn her a substantial income with only 226 potential recruits?
This 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 Inc. and the women who got in at the top of the pyramid.