Business BasicsCulture & ManipulationFailure in MLMPink Truth Press

Mary Kay’s Pink Pyramid Scheme (from Harper’s Magazine)

I thought today was a good day to take a trip down memory lane. In 2012, Harper’s Magazine published an excellent article (the cover story!) about the pink pyramid scheme known as Mary Kay: The Pink Pyramid Scheme: How Mary Kay Cosmetics Preys on Desperate Housewives.  The story got tons of buzz, and there were spirited discussions about it all over the place. The story is as relevant today as it was then, as virtually nothing has changed in the world of multi-level marketing.

Virginia Sole-Smith went undercover to dig into the world of Mary Kay, finding out the dirty truth about recruiting and inventory frontloading. She found out the sad truth: Mary Kay uses the public image of “enriching women’s lives” as the basis for misleading recruits in a “business opportunity” that almost guarantees they will lose money.

Recruits are told that purchasing inventory is optional, but their arms are twisted until they “opt” into purchasing it. Virginia writes:

The first step on my Mary Kay to-do list was making my initial inventory investment. Of course, Antonella was quick to work in the standard caveat, necessary because it’s the technicality that separates Mary Kay from a pyramid scheme: “Buying inventory is always optional with Mary Kay, and if anyone has told you otherwise, they were lying to you. You do not have to buy products in order to be a Mary Kay consultant.”

There was a slight pause. “But there are some advantages.”

It was true, Antonella acknowledged, that some consultants preferred to wait to order products until after they had made some sales using the catalogues and samples in the starter kit. But she didn’t think it was the best course of action for me, because she could tell I was so serious about my Mary Kay career. “I was just like you, Virginia—terrified to place my first inventory order.”

After telling her recruiter that she didn’t have $1,800 lying around waiting to be used to purchase Mary Kay inventory, it was suggested that she use a credit card to purchase inventory, because it was an investment and NOT debt:

When I delicately conveyed that I didn’t have $1,800 on hand, Antonella was unconcerned. “I actually don’t suggest that my consultants use personal funding to buy their inventory, even if they do have the money,” she said. “I find that unless someone holds you accountable, consultants forget to pay themselves.” Instead, I could apply for a Chase Mary Kay Rewards Visa card, which offers instant approval, 0 percent interest for six months, and two points for every dollar spent on Mary Kay merchandise. “What you need to understand is that this is not a debt,” Antonella said firmly. “If you spend eighteen hundred dollars on a new couch, sure, that is a debt sitting in your living room. But this eighteen hundred dollars is an investment in your business.” This eighteen hundred dollars would also be almost half of Antonella’s December wholesale goal.

The truth is that inventory is not necessary in Mary Kay. Recruits are told they need it to be successful, because no one wants to wait for their cosmetic purchases to arrive. While having inventory on hand may help consultants sell a little more, the bulk of their customers would be willing to wait for a few days to receive their items. (After all, millions of people order products off the internet every day, and wait anywhere from a couple of days to a week to receive them.)

Any additional sales that a consultant will generate because she has inventory on hand will be more than wiped out by the high cost of having the inventory on hand. Those costs include interest on the debt, the cost of expired products, the cost of obsolete products (Mary Kay is constantly rolling out changes to their products), and the cost of any inventory that just can’t be sold because of market conditions.

And if you doubt the truth behind my statement that Mary Kay products are incredibly difficult to sell, run on over to eBay and search for Mary Kay. At any given time you will find 40,000 to 50,000 auctions of products that women could not sell through the face-to-face means that Mary Kay encourages. Many of those products are sold for less than wholesale pricing, which is 1/2 of the suggested retail price.

Virginia gave a nice shout out to Pink Truth:

For the half dozen Mary Kay consultants I interviewed, the “corporate income” Daria talked about, to say nothing of Antonella’s Mary Kay dream house, never seemed to materialize. These anecdotal accounts reflect the findings of Tracy Coenen, a financial-fraud investigator and former Mary Kay lady who founded Pink Truth, an online community that describes its mission as giving “a voice to the millions of women who have had negative experiences with Mary Kay.”

Extrapolating from data published in the company’s Applause magazine, Coenen estimated that fewer than 300 U.S. Mary Kay ladies are earning a six-figure income after business expenses—roughly 0.05 percent of the 600,000 American consultants.

Coenen also estimated that the highest-earning sales consultants generally order only about $50,000 worth of products per year, meaning the most they’re making annually from direct sales is $25,000. But hostess gifts, official Mary Kay skirt suits, travel, and other expenses—not to mention the challenge of moving so much inventory—eat into their profits. “Almost everyone loses money,” said Coenen. “Most of those who do profit are making about minimum wage.”

A business in which only a select few earn real money while everyone else pays to play sounds a lot like a pyramid scheme. The Federal Trade Commission distinguishes between recruiting salespeople to sell a product, which is perfectly legal, and making money through “fees for participation,” which isn’t. What constitutes a fee is, of course, vague, but the FTC has charged some multilevel-marketing companies with employing pyramid schemes. In those cases, the majority of sales occurred between company and salespeople; the retail products were essentially decoys. The FTC has never taken action against Mary Kay, and an agency spokesperson told me that he was “unable to confirm or deny” whether the company had ever been investigated.

When I contacted a public-relations manager at Mary Kay headquarters, she was quick to emphasize the same technicality that Antonella had: buying inventory is “a personal choice.” On top of that, she said, the commissions that sales directors earn on purchases by their team members are paid by Mary Kay corporate itself; they’re never taken out of the pockets of lower-level consultants.

The company’s website is equally emphatic: “Is Mary Kay a pyramid scheme? Absolutely not,” reads one FAQ. “The entire marketing structure is based on and intended to foster retail sales to ultimate consumers.”

Despite this supposed focus on the ultimate consumer, however, Mary Kay has little real idea where its products end up. When I asked the press officer to comment on Coenen’s income estimates, I was told that the company tracks only wholesale figures. After a saleswoman places her order, Mary Kay disassociates itself from its carefully cultivated girlfriends’ club; every consultant is her own business, independent from (and yet completely dependent on) the mother ship.

Mary Kay supporters came forth to decry this story and claim it only reflects the experience of a few “disgruntled former consultants.” Sadly, we at Pink Truth know that is not the case. We know that almost everyone loses money in Mary Kay, and that there are millions of women who have had bad experiences at the hands of this pink predator.


  1. Gotta say, reading Pink Truth makes me glad at my inoculation early on. Being rather unpopular in high school, I was happy to attend a makeup party, as my host stated. I imagine either some sort of TV drama makeover sleepover session without the sleepover or an actual pampering near spa treatment. What I got was neither. We put on our own makeup provided by a woman who then asked us to buy things. This soured me to the whole idea of what I learned later to be MLMs.

    Oddly, if I was told up front what the party would be about – a product testing and sales party – I might have been more receptive. Part of my dour mood toward it was the deception of how I would get a “Treat” instead of a makeup purchase. Reading this site over, however, tells me how rare such honesty is, and honesty is a thing newer generations are valuing more and more.

    I hope that many other Millenials remember the savvy tricks we’ve had to learn in the digital age to dodge the amount of advertisements and too good to be true offers that MLMs make. I’ve seen it’s not true, but I hope as more experience it and open up to their encounters, more would get that sour feeling I got at that party.

  2. It’s so hard to believe this was five years ago. MK said that my story wasn’t believable because I didn’t use my real name (technically I just didn’t use my last name). Virginia and I ended up going on NPR and Corporate was not happy to have us tell our stories over and over.

    So if you’re reading, Virginia, thanks for making this happen!

  3. So if the business plan is so terrible and a pyramid scheme, why is it taught at Harvard Business??

    • Shelby … Harvard Medical School teaches about Ebola and bubonic plague, but that doesn’t make them a good thing.

    • There is a very big suggestion that “taught at Harvard” means “endorsed by Harvard” or “approved by Harvard.” Mary Kay is most certainly NOT approved by Harvard.

      The only two real connections I’ve heard about between Mary Kay and Harvard are these: 1. NSD Gloria Mayfield Banks has a degree from Harvard (which does NOT make her a Harvard spokesperson). 2. Harvard teaches business classes in Fraud Detection, which may have included Mary Kay and MLMs as a case study from time to time.

    • It was only used as a case study by 1 group of students, so that is not the same as “studied by Harvard”. No one I know with an MBA has ever studied MK. Students can choose any company they’d like for certain presentations or papers, yet that does not mean Harvard University applauds MK as a business.

      • I’ve seen a few case studies. My favorite was the one analyzing how MK Ash got women to work so hard for so little.

        But a case study about Bernie Madoff doesn’t make Ponzi schemes OK.

    • You’ll also want to know many people in MK boast that MK does not do animal testing, yet they do. For years, I heard NSDs like Kathy Helou say that, but it was only after I became a Director and moved up a bit before I got someone at corporate to admit it to me. I was gutted to hear it, and it added to my growing list of reasons why I had to resign and get completely out of MK. Lying, while saying you’re a Godly company, is the ultimate abuse of Him.

  4. MKrap is NOT taught at Harvard:

    In fact, some Harvard Law School professors think these pernicious lies might be grounds for a defamation suit.

    Lies are SOP in MLM.

    BTW, MKrap DOES torture small animals at the whim of the Chinese government in the pursuit of profit:

  5. The line that shook me was from a director at conference saying it was selfish not to share the MK opportunity with others… She went on for about 10 minutes on how terrible it is to be selfish and that we NEED to be out there, selflessly dedicating our lives to the possibility that there is someone who will become a director because we said hi. After that, everything my husband had been saying started to make sense. The pink veil was lifted form my eyes. It is not selfish of me to spend time with family instead of hosting a party, I’m sorry that’s BS.

    • This is just another way to brainwash people. Repeat over and over…shifting blame onto others for not sharing the opportunity. And when someone resists the “opportunity”, the up-line just tells the brainwashed IBC that the potential recruit “just doesn’t ‘get it’. ” Same with family, husbands, friends – “they just don’t get it”. Always shifting the blame. Never looking inward, at the opportunity itself and asking why it’s not working for you.

  6. I tried to sell Mary Kay for about a year. Most people think it’s too expensive. All I ended up with was a big inventory and hurt feelings. I honestly thought my recruiter was a friend but she dropped me like a hot potato when I told her I was quitting the business. I wouldn’t recommend getting involved with this company. You won’t make any profit and you will feel used once you realize it’s a rip off.

  7. “Most people think it’s too expensive.”

    It IS too expensive. Example:
    — NYX Retractable Lip Liner .01 ounce $5.00
    — MK Retractable Lip Liner .01 ounce $12.00

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