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

A Town Can Support as Many Mary Kay Sales Directors as Bank Branches

Written by Frosty Rose

A common objection to joining Mary Kay is that the market is oversaturated. There are simply too many people trying to build a business selling the exact same product. “I understand how you feel,” the recruiter will reply. “I felt the same way, too, and asked my director that question before I felt comfortable starting my business. What I found is that a town can support as many sales directors as bank branches and your town doesn’t have nearly that many directors currently. There’s still plenty of room for new consultants, and even directors.”

Let’s break that down, shall we? Now, bear with me, because we’re about to deep dive into some true Mary Kay math (which is to say, entirely divorced from reality). But I’m using “typical” numbers, per several “well respected” national sales directors.

A sales director needs a minimum of 30 consultants to maintain her director status. If she wants that trophy on wheels, the pink Cadillac, she’ll need 75-100 (the reality is much higher but no one tells you that). But let’s go small and pretend she has 30.

Working consultants are encouraged to build a customer base of 100-200 skin care customers. Easy, right? Sure.

So, a unit of 30 consultants can expect to represent at least 3,000 faithful skin care customers. But, wait! The market isn’t saturated! Mary Kay only has 10% of the market share, leaving 90% of potential customers using the “wrong” brand. Assuming that every man, woman, and child in a town is a viable prospect for Mary Kay (ha!), we would need a population of about 30,000 people to support one sales director.

The town I grew up in has more than 10 bank branches for a population of less than 12,000.

There’s something broken with this formula, and it’s not my calculator.

Either our dear nationals are exaggerating the number of customers the “average” consultant has or the market is saturated. I would argue it’s both.

Anyone who’s been in Mary Kay for more than five minutes can tell you how difficult it is to hit that mark of 100 skin care customers. In over 12 years of working hard to build my business, I doubt I ever had more than 25-30 faithful skin care customers—that is customers who are using only MK skin care, not a mix of this serum combined with whatever cleanser and a moisturizer from somewhere else. The reason for this difficulty is quite simple. As soon as a customer orders a bunch of skin care, you book her as a hostess. That way she gets a discount on her order and you get to expand your network. And what do we do with our hostesses, ladies? That’s right, we recruit them! How else are you to get to director?

And is the market saturated? You don’t have to take my word for it, or your recruiter’s for that matter. Here’s how you test it. Pop over to your Facebook and say you’re looking for a consultant. While you’re waiting, pull up eBay and compare those list prices with the Look Book I know your consultant left with you. See the difference? In the meantime, how many comments do you have on that Facebook post? Ten? Twenty? More? Now consider, these women are selling the exact same product you hope to sell, from the exact same catalog, to the same market you hope to target (your friends and family). The only competitive edge you have is how deep a discount you’re willing to give them and how completely you’re willing to burn the relationship. And while we’re talking Mary Kay math, this is exactly why you can’t possibly hope to earn anywhere near 50% profit from your sales.

7 Comments

  1. NayMKWay

    Frosty Rose has demonstrated beautifully (or perhaps horribly) how Mary Kay and other MLMs use scripts and thought-stopping clichés to deflect the prospective recruit from employing logical analysis.

    First, there’s the script: the old “feel, felt, found” speech. “I know how you feel. I once felt the same way. But I found out differently because yada yada.”

    The thought-stopping cliché is delivered at the yada-yada point. You, the recruit, are supposed to hear “…can support as many Directors as bank branches” and stop thinking about market saturation. As Frosty Rose has shown, the cliché doesn’t match reality in the slightest, but you’re not given time to notice that before you’re bombarded with more clichés so your mind can’t keep up. You might get as far as thinking, “Well, there are a lot of bank branches around here, but…” before your recruiter is on to, “Your customer base is everyone with skin,” or other such nonsense.

    There’s nothing inherently wrong with sharing a “feel, felt, found” story. I’ve had many in my own life. But they end with reality, not a silly deflection. Heck, I once felt MLM was a reasonable business model—one among many. But I found I was wrong; way wrong. It’s a wolf in sheep’s clothing, exploiting many to benefit a few. That’s no cliché; it’s the truth.

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  2. Colleen

    I live in a town of about 20K. 5 sq miles. Suburb but it’s definitely small town vibe with a moms group of 2200.

    We have 3 bank branches. Used to be 4 but that one close 15 years ago and is currently being renovated for a Hawaiian Bros restaurant.

    To my knowledge we had ONE MK director for awhile. But she lost her unit. So if there’s 3 in town and actually successful, I’d eat a TimeWise set.

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  3. Mountaineer95

    There is a reason why most major franchise businesses ensure that their franchisees have a clearly marked physical territory, written into their contracts and respected. Franchisees have to put up a lot of money to start their business. Want a McDonalds? You need the serious funds to support it. But McD corporate will NOT open other stores within your protected territory. Same for so many other franchise businesses: the potential franchisees are heavily vetted, and once they come to a contractual agreement, they have their protected area and full support of corporate. And McD corporate also incurs costs in their newest franchisees.

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  4. Lazy Gardens

    ALL “these women are selling the product you hope to sell, from the same catalog, to the same market you hope to target (your friends and family).” And that, my friends is saturated, soaked, drenched and overcrowded!

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    1. Data Junkie

      “And that, my friends is saturated, soaked, drenched and overcrowded!”

      LazyGardens you make such a fine point. I’ll add this: Door-to-door selling went out of favor in the 1970s. With today’s modern, efficient retailing platforms, few if any folks want to participate in Mary Kay’s outdated/obsolete distribution model.

      If Mary Kay were a modern company with a viable product, they would reach their customers primarily via their web site, eliminating the need for (and cost associated with) millions of consultants world-wide. Or, they would be in shopping malls with retail stores. Either way, modern retailing companies work hard to squeeze cost out of the distribution channel. Not Mary Kay. They remain stuck in the 1970s with that era’s countless middlemen. Those red jackets should really be brown or muted gold, to reflect the era in which Mary Kay operates.

      The dirty secret they won’t tell you: Mary Kay Corporate does not see its 2 million consultants as sales folks. Rather, Mary Kay sees their consultants as customers.

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      1. NayMKWay

        “…brown or muted gold…”

        Or that most hideous of all 70s colors: avocado green!

        I experienced one avocado green formica kitchen as a teenager. Never again. (*shudder*)

        Never again.

  5. PurpleH

    I live in a very small town with one bank. Even if every female over the age of 16 wanted full skincare and makeup, this plan doesn’t take into account other brands, or using MK but being loyal to a consultant in another town. This math is some of the wildest that MK directors throw around.

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