Company Name: Mary Kay
Costs: $100 startup kit + products
What Is It?
A large and well-known cosmetics company with a reputation for empowering women and offering an independent business opportunity.
Many MLMs don’t hang around all that long, but Mary Kay is an exception to that general rule. Don’t let its long history fool you though, as the company is still similar to other MLMs in many ways. Certainly, it has a complex commission scheme that heavily relies on recruiting others and growing your downline.
The company does offer decent products and there is still demand for those products. Nevertheless, the products are expensive, and there are a lot of places that people can go to get them. That makes the process of being a consultant that much harder.
At the end of the day, Mary Kay is as challenging as any other MLM, and the size as well as reputation of the company can easily be a disadvantage for potential consultants.
Mary Kay has a long history and the company’s products are pretty well known. In general, the products focus on beauty, which includes skincare, fragrance and makeup. The product line is strongly focused on women, although there is a smaller range of products for males.
I’m not going to go through the product line in detail, because you’ve probably already heard about it. In general though, the products tend to be considered as high-quality beauty products and tend to have a price tag to match.
The price of the products does limit who you could sell them too. However, Mary Kay’s reputation is focused on quality, so people interested in the range may well be willing to spend the money.
You can see this in the reviews that the products get on Amazon, like this one here:
In this case, the vast majority of the reviews were positive, with relatively few negative ones. Additionally, some of the negative reviews aren’t really viable, like people who complain that it doesn’t take makeup off, even though the marketing never claims that the cleanser does.
Reviews on Amazon can be easily faked, but the high number of positive reviews and low number of negatives does suggest that Mary Kay products are very popular. I also saw the same pattern across many different products, which reinforces that idea.
So, in general, the company sells products that appear to be high quality and have a good reputation. The only real catch is the price tag. I guess beauty is an area where women tend to spend a lot of money to have products they enjoy, so as far as products go, they pass the test!
With its opportunity, Mary Kay promotes the idea of women as Beauty Consultants. They also make the process seem fun and rewarding. For example, this is part of the advertisement for hosting parties.
That type of marketing makes the opportunity sound wonderful, but it also masks how difficult it can be. That’s actually the whole catch with this type of business model. Yes, you can earn money and yes, some people do. But, the process isn’t easy.
With the company, there are three distinct ways to earn money:
- Direct Sales
- Team Sales
Direct sales are exactly what you think they would be. So, consultants earn money by selling products from the company. That seems simple enough, but it isn’t where the real money lies (super important to remember!). Instead, the company’s emphasis is on the team sales and bonuses.
Both of these areas refer to the idea of growing a team under you (your downline). So, you recruit people into the company, they recruit others, and so forth. As your team grows and increases in the sales they make, your position in the company can grow, along with your income. The bonuses are directly tied into the team structure, so a bigger team means more income in this way too.
Of course, the commission plan isn’t simple.
For example, there are different ranks of consultants. The higher ranks offer more bonuses and higher levels of commissions, but moving through them means that your team needs to be a certain size. Likewise, for most ranks your team needs to be making a certain amount of sales and you may also need some members of your team to reach a certain rank.
Doing all of this and keeping your team to the required levels takes a lot of time and energy. It’s also challenging because you have to rely on other people. That can be a particularly frustrating thing about MLMs, because you never truly know how effective other people are going to be or what decisions they are going to make.
The Size And Reputation Of Mary Kay
Without a doubt, Mary Kay is one of the larger MLM companies and it’s also pretty well known. This could act as an advantage or a disadvantage for people trying to sell Mary Kay products or recruit others into the company.
One advantage is that it would be easier to promote the company if people have already heard of it. As you saw above, the products themselves have a good reputation. If someone knows the quality and already likes the products (or converts), you could be making multiple sales over time from the same customer.
However, the disadvantages are as significant, if not more significant than the advantages.
For one thing, the size of Mary Kay means that you are competing against a lot of people. In fact, many of your potential customers probably have a connection to at least one Mary Kay representative.
In my family alone I can think of 3 people that have sold Mary Kay in the past, and are savvy to the whole recruitment scheme. Regardless of whether or not they like the products, they don't want to get roped into automatic shipping and other ‘network marketing' things like parties or obligations to friends to buy.
That makes it so much more difficult to find people that will reliably buy from you.
At the same time, Mary Kay products are everywhere. Typically, MLMs want people to buy from distributors only, which makes their product appear exclusive. But, the size of Mary Kay makes the products very easy to find. For example, if you look on Amazon, there are around 2,000 Mary Kay products being sold, and many of them are being sold at a discount.
And that doesn’t even count all of the products sold on eBay.
That’s pretty bad news if you want to make money as a distributor. Potential buyers really do have so many different places that they can go to buy the products. This makes it that much more difficult to make sales.
Another thing is that Mary Kay has been getting some bad press for its commission scheme. For example, an article by CBS News talks about how the company might be considered a ‘pink pyramid scheme’. The article argues that the company exploits its workers and that it doesn’t live up to many of the claims about income that it makes. The following piece from the article is an example of that:
That quote alone shows that making money from the cosmetic giant is a lot harder than the company wants you to think.
I said before that making money with Mary Kay isn’t easy. That’s true, but I want to clarify. There isn’t really an easy way of making money regardless of how you try to do it. That goes for any business, including Mary Kay and for any other biz op you try. If you did find something that really did make money easily and quickly, then it would either be a scam, or simply not last long.
But, with Mary Kay (and other MLMs) the process of making money is considerably more difficult than it needs to be. If they just had you sell the products and work for the company on commission, I wouldn't have a problem with it!
One issue is that you strongly rely on being able to recruit others into the company in order to make decent wages. As I mentioned before, the size of Mary Kay works against you in this area, because there are just so many people to compete against. How will you actually grow your team large enough to make a decent amount of money when your family/friends network may have already been asked to join?
Specifically, the MLM structure relies on your growing a team under you and on your team members recruiting others and making sales. This is called your downline. As your downline grows, your rank within the company can increase, as can your potential to make money.
But, developing and maintaining a downline is hard. After all, the downline consists of others trying to make money from the company. Over time, many of them may give up, lack the funds to stay active or simply be unsuccessful at making many sales. If those things happen, then your own profit is going to decrease.
Just take a look at this video from an EX Mary Kay rep that got ranked so high she even won the Pink Cadillac advertised! However, behind the scenes she was $40k in debt and her recruits were dropping like flies due to not getting results.
You also have to purchase a certain amount of products yourself to stay active in the company. In particular, with Mary Kay you have to buy around $200 worth of products every three months. That could add up very quickly, especially if you aren’t making much money from the company.
Another interesting thing is the commissions they pay. In theory, you do earn 50% commission off what you sell. In practice, this means that you purchase at the consultant’s price ($9 for example) and then sell the product at the suggested retail price ($18 for example). If you can do that successfully, then yeah, your profit is decent.
But, with so many others selling the products, you’re likely to have to put your prices much lower to actually get a sale, so your personal profits may not be as high as projected if someone is telling you how much possible by being a MK rep.
All of these issues mean that you are fighting an uphill battle to make money and to be successful in the company.
Making money is always going to be a challenge, but some business models are much more challenging than others. Mary Kay is similar to most other MLMs, with a commission scheme that strongly relies on recruitment and on purchasing products yourself.
The main advantage of Mary Kay is that its products are well known and desirable. But even then, selling the products would be very difficult, because it is so easy to access Mary Kay products. Overall, this means that the company is only a good choice for those with a lot of social connections, or people who are mostly interested in getting discounts on the products that they will use themselves or give as gifts.
MLM VS Affiliate Marketing
MLMs are often considered unethical because of their structure and the way that people make money. In fact, their approach borders on a pyramid scheme. The key differences are that the companies do sell products, and people can make money just from selling products, without actually recruiting anyone. Yet, recruitment still plays a major role in the company and consultants would struggle to make much money without doing at least some recruiting.
Personally, I find MLMs frustrating. That’s partly because they look so simple on face value. People often end up joining companies like this one without ever realizing the challenges that they will face.
At the same time, you end up putting a lot of time and money into a business that you don’t actually own. So, if anything ever happened to Mary Kay or they decide to kick you out (it happens!), you could lose everything you worked for.
Unless you’re passionate about Mary Kay products, there are much better ways to earn money – ways that don’t have the same level of risk and let you take control over your business.
One of these approaches is affiliate marketing. Affiliate marketing lets you earn commissions from sales, but it doesn’t have the many weaknesses of MLMs. Instead, you develop your own site, and you can build this into a successful online business. You even sell products without having to buy, ship or physically manage any of them. You pick the stuff you want to promote, and can even feature products from multiple companies on one website.
Whatever type of product you decide to promote, it's important to own your own website to grow your business.
Parties only work if you have a network of friends with money in their pockets. Network marketing only works if your friends are interested in joining business opportunities.
With a website you can reach the entire world, and only promote great products to people interested in what you have to say. Plus, you open up doors to multiple streams of revenue like affiliate sales, ad click revenue, paid advertising, and even selling your own digital products.
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