Mary Kay Global Expansion Raises Hope, Concerns
by Sarah Wyatt
– USA –
The Dallas Convention Center was rocking last July. Some 42,000 Mary Kay consultants, many clad in red blazers, milled about, in attendance for the three-week national annual gathering known as Seminar. Enormous video screens in the arena displayed images of founder Mary Kay Ash as the crowd shrieked in delight and burst into applause. Just offstage, 65-year-old Anne Newbury prepared to be honored as the first-ever Mary Kay independent national sales director whose team earned more than $1 million in commissions in a single year.
“Feel the power of pink,” the amplified music mandated as pyrotechnics illuminated the arena. The estrogen-infused crowd erupted as Newbury, their coiffed rock star and symbol of the Mary Kay dream, took the stage. Nearing her retirement, her 85,000 consultants had collected more than $11 million in commissions during her career. The company reported Newbury’s retirement package guarantees her $8.5 million over the next 15 years.
Mary Kay is no ordinary business. The suburban Dallas-based corporation does almost no advertising to the public. Nor will you find its perfume or lipstick in department stores. Mary Kay’s marketing efforts are aimed squarely at the millions of home consultants to whom it sells the hundreds of beauty products it makes. To keep that market strong, Mary Kay must continually replenish its consultant ranks. Like most direct sellers, it loses a high percentage of its worldwide sales force of 1.6 million each year. To attract new ones, Mary Kay depends on its consultants to aggressively recruit. Conventions including Seminar are designed to motivate new consultants and keep seasoned ones in the fold. Those events usually include an appearance by a national sales director such as Newbury, names revered throughout Mary Kay.
Yet beneath the pink veneer, Seminar is eerily similar to the historic Indian caste structure. Attendees are segregated by their rank in the company. Top performers eat hot meals on fine china in an upscale dining hall while less successful or new consultants are relegated to cold cereal served on Styrofoam in a simple cafeteria. The most convenient and prestigious convention hotels are reserved for the top performers. Even seating at the awards ceremony is determined by rank —top performers sit in the arena, while most of the other attendees watch the proceedings via monitors in meeting rooms.
Marianne Ellis, co-author of the upcoming book, Mary Kay Unmasked: The Truth Behind the Pink Cadillac, said, “At Seminar you have a name badge that you are required to wear everywhere – it lists your name, but more importantly, it lists your level in the pyramid, where you are sitting and if you won certain things. It’s your Scarlet Letter if you’re a Mary Kay nobody.”
In a state of transition, the company had been without its charismatic figurehead since 2001, when effusive founder Mary Kay Ash died. Ash’s slogan, “God first, family second, career third”, attracted fundamentalist Christian homemakers to the ranks, and the conventions still appeal to that demographic.
Mary Kay’s blend of manufacturing and motivation seems increasingly anachronistic. The powwows celebrating traditional female stereotypes and conservative Christian themes alienate some recruits. Even after eliminating the middleman, critics say many department store cosmetics are still more economical.
Despite the implied claims of impressive earning potential to recruits, Mary Kay reveals little solid information about the financial side of the company. Consequently, there is little reliable data about actual net earnings by consultants, which some critics estimate may average only $1,300 annually.
That’s not to say Mary Kay isn’t a moneymaker. The corporation, believed to be worth $2.2 billion, fields a pink army of 1.6 million consultants in 36 countries. On the way to achieving that global market, Mary Kay also acquired something else: a controversial reputation. The company is alleged by some critics to pressure consultants to attend expensive and time-consuming motivational retreats where they are strongly urged to order excessive inventory.
“I feel the company describes earning potential the same way the state advertises the lottery: ‘You could win 27 million.’ They would be careful to say ‘earn, not win’ and ‘only you determine your earning potential’ but really, with 50% overhead in the product, the mailers, the supplies, the gas… I spent so much trying to make money that I was able to legally claim a loss every year. I do not think you can make anywhere near what they claim if you are focused on the customers,” said Tiffany Jakubowski, a former consultant.
According to statistical analyses performed by Robert Fitzpatrick, President of Pyramid Scheme Alert on Amway, a similar multi-level marketing company which makes its finances public (unlike privately held Mary Kay), 99% of Amway sales representatives suffer significant financial losses.
China, where Mary Kay opened its first factory in 1995, is expected to be Mary Kay Cosmetics largest market in the next decade, unseating the United States for the top spot. The company had to adapt to cultural female beauty stereotypes in order to succeed there. In keeping with the Asian preference for white skin, the company offers skin lighteners in the Chinese market rather than the bronzers sold in the United States.
Mary Kay is test marketing in India with the expectation to begin consultant programs as early as September. The move is a shrewd one for the corporation: the nation will likely surpass China as the world’s most populous country in the next few decades. Analysts estimate that India will sustain economic growth of about nine percent annually for the next five years, with a consumer goods market that could reach $400 billion by 2010.
The unanswered question is whether these moves into developing economies are good for the potential female consultants. Some former North American consultants cite concerns that the company will exploit vulnerable workers in these markets. Members of a cautionary website unaffiliated with the company, Pinklighthouse.com, fear that most women in China and India do not have the financial resources to “line up to drink the pink Kool-Aid.”
“I think that the women in these countries are so desperate for the type of dream Mary Kay sells that many of them will work their tails off, just like us here in the United States, and end up worse off than they already are,” said Sandy, a former high-ranking sales director who requested her last name be withheld.
Former consultant Elizabeth Hesse draws parallels between the women of developing countries and low-income North American women. She believes both may perceive consultant work as a way to build a career without the obstacles of higher education and childcare, and they are recruited after agreeing to free facials by current consultants. Hesse, a single mother who was dependent on public assistance and Medicaid when she signed up as a consultant, believes low-income women may be especially vulnerable to financial hardship stemming from consultant work.
“I had several recruits like this – they saw it for the opportunity to better their situations,” Hesse said. “They will sign up, usually with money that’s borrowed…you have a plethora of these types of low-income women…they jump on the opportunity for a free facial.”
In 2003, the company threatened employees at its Shenzhen factory in China with termination and even arrest if they practiced Falun Gong, a pacifist health and spiritual philosophy banned by the Chinese government in 1999. After activist organizations declared the corporate policy a human rights violation, Mary Kay retracted the rule. Marianne Ellis believes that rather than aiming for economic and political improvement for Chinese women, Mary Kay may be complicit in the status quo of worker exploitation and human rights abuses.
“I believe that Mary Kay’s expansion into India and China will be very detrimental to the women in those countries,” Ellis said. “At least in China, there are more governmental controls over how the company can operate. Mary Kay has already demonstrated some shady practices in getting established there, agreeing to make consultants sign a contract that they won’t practice a specific religion.”
Laura, administrator of Pinklighthouse.com, fears that the company’s expansion may enlarge the loopholes in already fragile global labor protections. She believes Mary Kay consultant work is the worst of both worlds: the home-based contractors lack the guaranteed hourly pay and benefits of traditional employment, as well as the empowerment common in individual business ownership.
“As an independent contractor, you get no benefits and you don’t really represent the company,” Laura said. “You are restricted in how and where you can advertise. It’s basically a low-paying job with no benefits. Great for the company because they save tons of money.”
The Mary Kay Corporation declined requests for an interview or a written statement.
About the Author
Sarah Wyatt is a freelance travel and outdoors writer. A native of Iowa and a Native American, she holds a degree in Journalism and English. Wyatt has been a freelance writer for 11 years, with work appearing in Texas Monthly, Mother Jones and Theater Magazine.
Pink Lighthouse is the absolute best online resource for support for those getting out of Mary Kay. PL Rocks!
Way to lay it out, ladies! Pinklighthouse.com has so much info for those with questions. Nice job!
I appreciate how this article shows some reality of Mary Kay. I myself was pulled in with the propaganda of a Sales Director and after $10,000 in debt realized that I was living a lie, not a dream. Great article and resources for anyone thinking about being a consultant with MK or any other multi-level marketing scheme.
Kudos to Sarah Wyatt for exposing the pink truth about Mary Kay’s expansion into foreign markets; which has been a hot topic of discussion and debate at pinktruth.com for months and months. Multi-level marketing companies like Mary Kay have preyed on the hopes and dreams of women who are searching for flexible working hours, unlimited earning potential, and the dream of owning a business. But sadly that dream is never realized as 99% of women who sign up only lose money, face limited opportunity for advancement, and never really own their business as the contract can be canceled by the company with 30 days notice, as in MK.
Pink Truth is a blog, discussion board, and the fastest growing online community dedicated to educating consumers about both Mary Kay and the other popular MLM companies that are heavily marketed to women.
Except that the owner of PinkTruth is known for being a fraud herself – so the reputation of PinkTruth is a bit dicey. She is an incredible cyber-bully and has hurt many women in (and out!)of Mary Kay:
http://www.ptlies.com
Pink Truth for debate? You have got to be kidding me! Go to http://www.ptlies.com to find out what Pink Truth, its owner and her trolls are like. She is nothing but a joke.
If you want a good source for information, go to Pink Lighthouse. They offer facts, support, friendship and alternatives. It has been revealed that Tracy Coenen at pink truth is not very ethical in the way she gets her information, nor in how she treats members of her online discussion group. Unless you like drama, beware.
Wow. The site must be really good if you are spending your time bashing it. I have taken a look at both sites, and it is clear that Pink Truth has far more information and activity for those looking to find out about Mary Kay. The site speaks for itself.
Gail and others – is there a problem with pinklighthouse getting credit in an interview? Pink truth is a carbon copy the owner doesn’t have an original thought. There’s really no need to promote that crap of a site. If it were as interesting as you thought then it would have it’s own article!
It’s unfortunate that women have to take Mary Kay out of content and design a website that is misleading women who are truly succesful in this business. I’ve been a in Mary Kay for 3 years and have never felt pressured or “out of money” to stay successful with the company.
I take pride in being a Mary Kay consultant and look forward to the opportunities that are waiting for me. It’s all up to the individual and no one else.
What a terrific article; it is wonderful to see that the word is finally getting out as more and more women are able to educate themselves and break free of Mary Kay’s grip.
As far as this whole “Pink Lighthouse/Pink Truth” rivalry that seems to be going on, I say that as long as both sites have the same mission, which is to help women get out of a tyranical parasite of a system – why not focus on that aspect instead of wasting energy on personal grudges/skirmishes? Mary Kay Corporate must be laughing their butts off seeing such a situation. “Haha! Look at PL and PT – they’re at each other’s throats and they think they’re going to being US down? Whatever!”
As far as I’m concerned, I’m not about to let MK have the last laugh. I encourage both sides to focus on the ultimate goal: seeing Mary Kay Cosmetics collapse like a skyscraper in an earthquake. There is great talent and resources involved with both sites; truly a powerful force for MK to reckon with.
God bless every solider in the war against Mary Kay!
Good point, general. Distraction like that takes all the focus of the corrupt MLM system.
A wonderful article. Now, do we really have to bash websites and make personal attacks? Come on, we all know better than that. I personally have never visited pinklighthouse so I don’t have an opinion and won’t pretend either. I love pinktruth. Am amazing group of wonderful, helpful and supportive women. Tracy is a pro at what she does and has treated us all fairly and with respect.
I lived and made awoman a top director in canada.
this company thrieves on weak women who can be motivated to order order. only 2 percent are succesful overall .
I got divorced once teh business acchiement with my monetary help was done. mary kay ahs more divorces than most companies as many of its women forget who they are when they believe to grow which is out of touch with every day life.
I wish i could recooup the wasted money that i spent for my ex wife to achieve where she is today although she would tell different. Gents if you want a divorce let your wife join Mary kay.
Really sad how so many people in the most abundant country & society in the world constantly “blame” others for their financial success and over all happiness. I guess that’s OK, because every business needs people with an employee mindset. Thank goodness for those leaders, who step out in faith, without a guaranteed pay-check, who create their own futures and opportunities for others…and don’t blame others because it didn’t go as planned (it never does – this is life!) The only reason why people are “in debt” with any company who is a member of the DSA (Direct Selling Association) is because they were too “dumb” or too “lazy” not to take advantage of the required 90% liquidation clauses (which required to be offered by all members of the DSA )….and poor money management on the part of the individual, once again not admitting to their responsibility and blaming others. I’m willing to bet, that their lives reflect their negative mindset.
I just wanted to comment on some of the postings to this forum… what a sorry bunch. I have to agree with Lauren. I have never had anyone twist my arm and make me spend money! Have you? Do you have a mouth? Can you learn to say no? I am a consultant of MK for personal use, and sell to my friends and family, and never once have I felt pressured to buy products, attend meetings, or seminars. It seems as though people who are not that intelligent, are the ones who so quickly blame others for their misfortunes. If you got into MK and bought $3000 worth of product and now years later are still sitting with it… I want to know how hard you worked? Really…Honestly…Did you do the work, or did you just think that it was easy and that it would just sell its self? Come on, lazy people are everywhere. All of you sound like 9 to 5r’s if you know what I mean… ever sold real state, cars, insurance, or any other commissioned product? Get a clue about the world, when you work, you make money! It’s that simple, and if your OK with that wage job and working for someone else, GOOD FOR YOU! Thank you very much, you just leave that much more room for the small business owners and other entrepreneurs, and guess what… maybe we’ll even hire you one day!
P.S. For the gentleman, who’s now divorced over MK, stop fooling yourself! It’s easier for you and your ego if you have something to blame, but don’t underestimate people, because many of them aren’t dumb enough to believe that story. Read between the lines buddy…you where probably the anchor that was holding down the ship! Good thing she cut you loose! I think that some men just have a hard time with women becoming more successful than they are.
I agree with Jackie. It’s what you make it. If you feel like going out there and pushing the product go for it. You will make some money. I do it cause I like the product and it’s fun. I meet new people and have fun too.
Mary Kay is an awesome product. I became a beauty consultant over 10 years ago and my friend became one 3 months before I did. I have only used it for personal use and made a little christmas money on the side every year. On the other hand she is driving a pink catillac and making 1000’s a month. She had breast cancer 3 years ago and was very sick but continued to make money becuase of the wonderful bunch of ladies the were under her that picked up the slack and kept the business going. She is back on her feet now and going strong. She is a survivor! I don’t think she would have gotten this kind of support from people in the office where she used to work 8 to 5 for a fraction of the money she brings in now. By the way, her husband even quit his job to be with her during this time. Mary Kay is an Awesome product with a great bunch of motivated women.
I am proud to say I am a small part of that organization.
The only reason why people are “in debt” with any company who is a member of the DSA (Direct Selling Association) is because they were too “dumb” or too “lazy” not to take advantage of the required 90% liquidation clauses (which required to be offered by all members of the DSA )….and poor money management on the part of the individual, once again not admitting to their responsibility and blaming others.
Actually, most of the people who’ve been out there losing money in Mary Kay do blame themselves. That’s got a lot to do with why so many people found it a losing proposition for so many years without any public to-do. People are ashamed to admit their own bad decisions. But since the internet has allowed those of us willing to speak about it find each other, and gain more knowledge about how common this is, and why so many of us made the same mistakes, we learned that there’s a lot more to it than appears on the surface.
The truth is, the people who push the Mary Kay opportunity are trained in manipulation and deception, and the people become so fooled, they don’t even realize when they’re lying to others.
I take responsibility for my own mistakes, and one way I do that is by helping make sure the information is available to help others to make better decisions.
I’m willing to bet, that their lives reflect their negative mindset.
Well, if you think that my 3 beautiful children, my wonderful husband, my very interesting job with its 6 figure income, or my really fun, healthy swing dance hobby reflect a negative mindset, go ahead and think so. But for me, the truth is I feel so very much more fulfilled now than when I was doing Mary Kay. Mary Kay made me feel like a failure, and it took years to recover from that, and remember the smart, active, successful woman I really am.
“It’s that simple, and if your OK with that wage job and working for someone else, GOOD FOR YOU! Thank you very much, you just leave that much more room for the small business owners and other entrepreneurs, and guess what… maybe we’ll even hire you one day!”
You know, if everyone decided to quit their wage job and work for companies like Mary Kay, the world would not work. We need people to work 8-5 5 days a week performing tasks that actually make a difference in the world. I would much rather make money working in an exciting and important field than spend thousands of dollars on inventory that people may or may not want to buy and struggle to snare my friends so I can make money off of their sales, too.
“Mary Kay made me feel like a failure, and it took years to recover from that, and remember the smart, active, successful woman I really am.”
Totally agree. I signed up for Quixtar once, and got out of it within a week (luckily, there wasn’t time to lose more than maybe $30). But if you’re not out there manipulating people and trying to sell an overpriced product, you’re not going to get any recognition from anyone, just unhealthy pushes to spend more money on training cd’s and such. Smart, Active, Successful women do not make a living off of selling makeup. They realize that they can put their qualities to work in fields like engineering and medicine, stuff that matters.
I have to say I have never been conned into selling MK, but was once acquainted with someone who did. I now avoid her at all cost, as I have been ‘warm chatted’ (more like harrassed) on more occasions than I care to mention. (If I had a dollar for every MK product book she has given me I could be driving a free car!) I have heard from her so many times the ‘potential’ MK Consultants have, but I have failed to figure out why she is thousands of dollars in debt? She is currently ‘On Target’ for that ‘FREE CAR’ (and on target for bankruptcy), which leads me to wonder- Is a Pontiac Vibe really worth filing bankruptcy?? Of all the millions of women recruited every year, how many are actually driving that free car?? Besides, if I wanted to wear THAT much makeup I would have joined the circus! She says it’s all about ‘public image’! Did Mary Kay Ash apply that much makeup to simply jump in the car and drive 2 miles to the grocery store?? Perhaps so… that next victim, I mean recruit, could be just an aisle away!
I believe I’ll stick w/ my 7 to 3 nursing shift, which has great benefits by the way, and pay for my BMW -NOT PINK- the old fashioned way!
I have to say I have never been conned into selling MK, but was once acquainted with someone who did. I now avoid her at all cost, as I have been ‘warm chatted’ (more like harrassed) on more occasions than I care to mention. (If I had a dollar for every MK product book she has given me I could be driving a free car!) I have heard from her so many times the ‘potential’ MK Consultants have, but I have failed to figure out why she is thousands of dollars in debt? She is currently ‘On Target’ for that ‘FREE CAR’ (and on target for bankruptcy), which leads me to wonder- Is a Pontiac Vibe really worth filing bankruptcy?? Of all the millions of women recruited every year, how many are actually driving that free car?? Besides, if I wanted to wear THAT much makeup I would have joined the circus! She says it’s all about ‘public image’! Did Mary Kay Ash apply that much makeup to simply jump in the car and drive 2 miles to the grocery store?? Perhaps so… that next victim, I mean recruit, could be just an aisle away!
I believe I’ll stick w/ my 7 to 3 nursing shift, which has great benefits by the way, and pay for my BMW -NOT PINK- the old fashioned way!