Facts, opinions, and the real story behind Mary Kay Cosmetics.
 

Lots of New Businesses Fail

Megan Coleman wants you to believe that Mary Kay is a real business. She and other MLM pushers will keep telling you that it IS a real business.

NO. IT. IS. NOT.

Real businesses are based on selling products and services, not on recruiting people who will make large product purchases themselves (which they will never be able to sell profitably). MLM is all about recruitment, but they pretend to be about sales. It’s a huge difference.

And no, 90% of people who start real businesses don’t fail. Unless you’re talking about a very long term look. In MLM, 99% lose money immediately with no hope of ever changing that. It’s completely different than starting a real business with a unique offering. (Plus in a real business, you’re not recruiting competitors.)

22 Comments

      1. Mountaineer95

        I feel like there is the potential for a front page post with these two…Megan’s complete lack of understanding about how real businesses work, and how her mother apparently had “her own business” but “lost” it. I do love how Megan mentions the “you don’t own a business if you don’t actually own anything” argument she hears but doesn’t defend her stance in any way. She needs to answer one big question: Megan, what do you OWN with your MK “business”?

  1. Kristen

    Mary Kay cannot win with rational arguments. Their success depends on secrecy and avoiding any discussion. Bringing criticisms into the situation and trying to deflate them will only plant more seeds of doubt within people’s minds. I still wonder why it’s taking so long for people to get wise to MLM’s. In my day (2000), the internet was new and there was certainly no discussion about the legitimacy of MLM’s. But it’s been about 15 years of Pink Truth (I think?) and other logical information around the web. Why is Mary Kay still churning women?

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    1. morningstar

      because MK depends on a cycle, 18yr a new generation of people to prey on, This they have noted in public as at seminar. Suzanne Brothers’ daughter literally ran out of the state ASAP. Suzanne counted on Ashley for so many yrs. to pick up the MK ball. nope

    2. Char

      “But it’s been about 15 years of Pink Truth (I think?) and other logical information around the web. Why is Mary Kay still churning women?”—

      It’s as easy as people still believing women have one less rib than men, the Earth is only 6000 years old, and JFK Jr. isn’t dead. Aka, facts don’t matter to them.

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    3. Mountaineer95

      Like how above, Megan uses her cutesy caption to share how people ask her how she owns a real business if she doesn’t truly own anything. She doesn’t address it or make any attempt to prove it wrong. She simply mentions it like that’s supposed to render the argument null and void. The MK folks do this ALL THE TIME and it is infuriating.

  2. Data Junkie

    There is a very big difference between 90% and 99.6%. If you look at the “success rate”, 100/1000 succeed in regular business startups, while only 4/1000 succeed in MLM. The regular business startup, therefore, is 25 times more likely to be successful than MLM. That’s hardly similar.

    But that’s the wrong statistic. They are talking about startups. In MLM, the corporate business is already established, so it is more accurate to compare MLM to Franchise or existing independent small business.

    “Research on franchising in the US by Timothy Bates, a Wayne State University Economist, paints a very different picture. After 4 years, only 62% of franchised businesses had survived, while 68% of independent small businesses were still open for business.”

    Franchise: 62% success
    ISB: 68% success
    MLM: 0.4% success

    MLM is not even in the same galaxy.

    Sources:
    https://www.moyak.com/papers/franchising-failures.html#:~:text=Franchisee%20survival%20rates%20are%20similar,out%2C%22%20says%20Timothy%20Bates.
    https://www.ftc.gov/sites/default/files/documents/public_comments/trade-regulation-rule-disclosure-requirements-and-prohibitions-concerning-business-opportunities-ftc.r511993-00008%C2%A0/00008-57281.pdf

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    1. Char

      Even though very good information from Data Junkie, since the source of the .4% success rate is from fellow business owners’ orders, it’s not really a comparison at all. Franchises and ISB need actual outside customers to be successful, MLMers do not.

      It’s apples and oranges comparing the two on any level. This is something the dude above is trying to trap us into doing. We cannot compare legitimate business to a product-based pyramid scheme. Like gambling, the money paid to players comes from fellow players. MLM companies just don’t advertise that they’re a casino, and you’re a gambler.

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      1. Data Junkie

        Excellent point Char. The nature of the cash flow is stark between MLM and real businesses. MLM is effectively a closed system (those pity purchases only account for a tiny fraction of total sales).

        I appreciate your point that MLM can’t be compared to legitimate businesses. My reply was intended to refute the erroneous assertion above that MLM has the same failure rate as traditional business.

        Here is a graphic that shows the nearly-closed system of MLM:
        https://www.reddit.com/r/antiMLM/comments/a8cymy/update_mlm_cash_flow_simplified/

  3. Mountaineer95

    Megan, how is your “business” incorporated…S Corp, C Corp, Sole Proprietorship? Do you pay self employment and business taxes?

    If you decided, for whatever reason, to retire or to leave your “business”, what would you do? If it’s a “real” business, you could do what tons of other business owners do, which is SELL their business.

    Okay, so you don’t have a brick and mortar to sell; that’s not uncommon in modern times. You could sell your business/brand name though, right? Oh wait, they’re not yours. You could at least sell your businesses website, right? Oh, nope. What about your unit…can’t you choose which other MK person will receive “your” unit, and what they’ll pay you for this? Well at least you could sell your client list and info, right? The list you’ve worked so hard to grow? Wait…you can’t sell THAT either? It seems the only thing you OWN is the MK product sitting in your garage. That, you do own…but you still technically can’t sell it in any way you’d like (MK will totally go after your eBay listings).

    Do you understand now how you DO NOT OWN A BUSINESS?

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      1. Mountaineer95

        Thank you! I’d love to know who gave me the downvote…like their reason, and hopefully to hear that they’ll be praying for me to stop being so negative.

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