If you’ve ever purchased cosmetics for yourself or someone else, you’re probably well aware of Mary Kay, a privately-owned cosmetics company founded in 1963 by Mary Kay Ash. This company has yearly revenues now totaling over $3 billion and focuses on six major product lines: skin care, cosmetics, sunscreens, fragrances, men’s personal care (colognes, face soap, shaving cream), and gifts.
You can buy Mary Kay products by going online to its website; however, what’s more strongly encouraged is that you work with your local Mary Kay “Independent Beauty Consultant” and purchase through her or him. Why?
Because Mary Kay is a direct sales and multilevel marketing (MLM) company.
What is Mary Kay all about?
Companies that wish to reach different marketplaces and sell their products by the gross usually make deals with area distributors, who purchase their items in bulk and at wholesale prices. Those distributors then sell their products to retailers at a set markup. Finally, the retailer sells those products to consumers, and also at a set markup.
With direct sales companies like Mary Kay, there are no distributors or retailers. Individuals purchase directly from the company, paying wholesale prices for the products. These individuals then mark up their goods as they see fit in order to make a profit from their customers.
To sell their products, individuals will host product parties at their homes or list items via special company-hosted websites. Other consultants might even go door-to-door, with samples in hand, to sell.
Such individuals, who are often called consultants, can also recruit others to sell product (this is the MLM side of the company). Through this recruitment, the original consultants earn referral commissions. When their recruits, in turn, recruit others, the commissions to the original recruiter increase. With some MLMs, commissions can trickle up through four or even more levels of recruits.
How do you start a Mary Kay business?
You can sign up to become a Mary Kay Independent Beauty Consultant by purchasing the $100 Starter Kit. Within this Starter Kit, you get a few products, brochures and access to a personal website.
You can then start taking orders for customers and buying their products for them at 50% off retail value. So, if a customer orders a $10 lipstick from you from an MK catalog, you make $5 in profit when you purchase that item and deliver it to her.
Keep in mind that, to remain an active consultant in Mary Kay, you must purchase at least $225 of wholesale-priced (or $450 retail-priced) product every three months.
You can also earn additional income from consultant recruitment. In fact, recruitment is the surest way to leverage your selling efforts and to rise up in the Mary Kay sales ranks. There are 15 total levels for MK consultants, with each level paying out higher commissions, bigger bonuses, and major incentives like the use of a pink Cadillac “career car.” Keep in mind, though, that the car perks require high personal and team wholesale product sales, sometimes to the tune of roughly $200,000/year.
Should you become a Mary Kay consultant?
Like every direct sales MLM reviewed so far, Mary Kay has its pros and cons:
Pros:
- Quality products– Mary Kay sells medium-end personal care products that are on par with those of Avon and Nu Skin. There are many products to choose from, including a line of products directed towards men.
- Market reach– Mary Kay products are applicable to a wide audience, including women, men and kids. The company sells much more than just makeup.
- High commissions– Being able to pocket 50% of the product price means that consultants can run promotions and discounts and still make a profit.
Cons:
- Market saturation– When I looked up Mary Kay reps for my geographic area, I found not one or two, or even three, but six local beauty consultants. That’s a fairly high number for a geographic radius spanning about 15 miles.
- Peer pressure– If you thought buying $225 worth of wholesale product every 3 months was bad, be prepared to undergo some major sales pressure by your local sales director to purchase “inventory packages” that run $600 to as much as $4,800. This is because the higher up you go at Mary Kay, the more you are pressed to have your underlings purchase wholesale packages and thousands of dollars of inventory each month.
- Storage– Unlike Avon, where you take orders from customers and then purchase the inventory, here you are first purchasing massive amounts of wholesale inventory to (hopefully) sell later on. But until that inventory is sold, you need to store it. The question is where, of course. If you rent out a storage unit, you’ll be paying a monthly fee for your extra space. Unless you have some spare basement or closet space, you’ll be surrounded by inventory.
- Restrictions– Mary Kay emphasizes that you sell to your “warm market,” which consists of your family members and friends. However, such a market is easily and quickly tapped out, so you must soon look for new customers. Many people use third-party platforms like eBay, Facebook or Craigslist to sell their goods. With Mary Kay, however, you are not allowed to take advantage of these opportunities. Additional information about where you can advertise your products is provided here (spoiler alert: it’s only the company website).
Is starting a Mary Kay business a good idea?
Despite the fact that Mary Kay offers high commissions and good products, I’d be hesitant to sign up with this company because of the high pressure to buy loads of company inventory and to then try to sell it only via the approved company website. This limits you to doing mostly house parties and/or fairs in order to sell your massive amounts of stock. And speaking of which, that stock does come with expiration dates, so you must either move it or be stuck with stuff that you never wanted in the first place.
Have you sold Mary Kay products or are you a current consultant with this company? Please leave a comment about your experiences below.
