Mary Kay Market Saturation

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.

10 Comments

  1. NayMKWay

    [To quote myself from 7 months ago]:

    MLM hawker Zig Zigler dismisses mathematical reality and claims, “Market saturation is impossible because more people are born every day.” Nonsense. Saturation doesn’t mean there are no more buyers; it means the market has too many sellers. That’s been the case for Mary Kay for decades. In endless-chain recruiting, saturation is not only possible; it’s inevitable. [End quote]

    Zigler went on to spout more non sequiturs about GE still selling refrigerators even though almost everyone already has one. This crap is the essence of MLM: misleading nonsense masquerading as logic. GE is not an MLM company, for one, and you can be sure none of their marketing people consider market saturation to be “impossible.”

    Lately the Zigler quote has morphed into “new people turn eighteen every day,” which maybe sounds a little better but is equally dumb. Birth rates are biologically limited; downline growth isn’t. Can you make babies as fast as you sign people up? No? Then shaddap.

    1. Kristen

      Plus the US population has slowed way down. The birth rates are nowhere near what they were when Mary Kay teased up her hair and started pushing products on the neighbor ladies. The world population is still growing but is expected to slow. So we now have families with one-two kids (or none), with girls having a huge range of options for a career instead of housewife/teacher/Mary Kay lady. The model is not sustainable.

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  2. Cindylu

    Too many Gurus have touted this prosperity and abundance fallacy. Books like: Simple Abundance, the Secret, Law of Attraction books, The Power of Positive Thinking, Think and Grow Rich etc. It’s ok to be positive. It’s good to set and meet goals. The problem is MK is a flawed mlm. Within mlm’s very few succeed. Many stores who open too many eventually fail. Whether it is a coffee shop, fast food chain restaurant or grocery store, they are usually set up per capita. It is rare to see the exact same coffee shop etc closely. MK etc would have us believe that endless numbers of recruits in the same area is just fine. The fact that most in MK give heavy discounts means less profit. I often encountered customers who assumed the products wouldn’t be full price.

  3. Lazy Gardens

    For any rep to make a mediocre after expenses income of about 20,000 a year, each of those 226 customers would have to order $265 per year (full price). And we know that’s not happening.

    Also, the customer pool is not elastic. If Sally Sweetcheeks has really been hustling and has 600 loyal customers on her list, other IBCs have a smaller pool to draw from.

  4. J

    I gasped at 226. I had about 100 customers. A few rockstars and some quarterly hostesses, but the vast majority were names I held onto for years hoping they’d buy another eyeliner and eyeshadow, have a mom with a birthday to send a perfume to only to watch my profit be eaten in the shipping costs.

  5. Data Junkie

    To really drive the point home, you need to mention cold-call conversion and churn. Let’s say churn in Mary Kay is 50% or so (does not really matter if that is exact), and cold-call conversion in retail is 5% (also does not need to be exact). That means you need to replace 50% of your customers every year, and only 5% of the strangers you get to your “pamper party” will sign up under you. Given these (rough) numbers, you need to approach 4,520 prospects just to get to 226 customers in a year, and then another 2260 per year to stay at 226.

    And if you think you can make any real money off of F+F, forget it. You don’t have enough of them, and they will only make things worse for you with their initial pity purchase (and they will likely avoid you from that point forward).

    And what about market share? Lets pick a round number like 5% (again the exact number does not matter). If Mark Kay is used by 5% of women who wear makeup, that leaves, on average only 5% of the 226, or 11 women. That’s it. 11 potential customers per MK rep (on average). Can’t you just hear that cash register ringing?

    There are many very good reasons why door-to-door sales is obsolete in this age Walmart, Amazon and manufacturer online-direct. Selling retail out of your home can never be profitable when you are competing with 450K ladies selling the exact same overpriced commodity product of dubious quality. It’s one thing if you have a truly unique product to offer, which Mary Kay is NOT.

    And to make matters worse, they encourage you to hire folks in your own area to compete with you selling to the exact same people, further reducing your own prospects.

    There is nothing about this that makes any business sense for anyone other than Mary Kay corporate.

  6. Eric Thiessen

    Ironically, if the company actually had and did what they claim (top of the line, cutting edge products @ reasonable prices, fairly compensated salespersons), there would be actual businesspersons wanting to open stores to sell their products instead of this MLM charade of trickery.

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