Is Mary Kay a Ponzi Scheme? Check Out Why I Don’t Recommend It!
Today we are going to take a look at MLM-system that has been around already for over 54 years! Still, some people ask, Is Mary Kay a Ponzi Scheme? Check out what one woman in our team writes about Mary Kay.
Mary Kay Review
Name: Mary Kay
Founded in: September 13, 1963
Field: Cosmetic and personal care products
Overall Ranking: 30 out of 100. (Check Out My #1 Recommendation. 98 out of 100)
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What Is Mary Kay?
Mary Kay is a multi-level marketing/direct sales company that sells cosmetics products, which was founded by Mary Kay Ash in 1963. Mary Kay has helped women discover products that they love with its irresistible makeup, innovative skin care and unforgettable fragrances, and also at the same time offer business opportunity for women to discover making extra income.
In 2015, Direct Selling News reported Mary Kay to be the sixth largest direct selling company in the world, with a wholesale volume of US$3 billion. Presently, Mary Kay claim to have 3.5 million Independent Beauty Consultants with more than 200 premium products available in more than 35 countries around the world.
Mary Kay Products
Products are distinctively made by Mary Kay Inc. researchers for Mary Kay target markets. They seem to have a huge, reputable research and development wing. According to their market research, there is a 90% product satisfaction rate but Mary Kay still made provision for fulfillment assurance on all items purchased -which involves replacement, exchange, or complete reimbursement if clients are not satisfied with the product.
Mary Kay offers a wide range of Women’s cosmetic needs in these categories:
- Skin Care
- Body & Sun
It may come as a surprise to you, but Mary Kay did also offers a palette of products for Men.
Men can choose from these categories:
- Men’s Colognes
- Shaving Foams, Creams and After Shave Lotions
- Sun Screens
- Face Soap
Interestingly, the rates seem quite affordable. Let’s take a look at a few right here:
- Hand cream: $10
- Ultimate Mascara: $15
- Guy’s facial wash: $16
- Broad spectrum SPF 50 sunblock: $24
- Perfume spray: $50
But, of course, you could get the same kind of products for 2-3x cheaper. MLM-products are always more expensive because there are so many middlemen who want to get paid. I prefer affiliate marketing because there you can sell products even for a cheap price and still earn $10,000/month. Sometimes you can even give bonuses and discounts when selling good products.
Mary Kay Commission Structure
Like most Multi-Level Marketing companies, Mary Kay made its fortune by simply selling cosmetics through a multi-level marketing model- whereby Mary Kay distributors usually called “Beauty Consultants” can potentially earn income by directly selling to people in their respective communities, and also receive a commission on sales made by the people they recruit into their distribution network.
Unlike some of the other annoying MLMs, with Mary Kay you do not have to fill a specific ‘matrix’ to build your downline. Only the number of your active recruits and their total sales volume is of paramount importance.
Let me briefly explain the three pay levels:
1) Earn from Direct Sales: Beauty consultants are encouraged to have ‘cash & carry’ items and host a few parties for customers or potential customers to sample, and subsequently buy the products they are interested in. As a beauty consultant, you would order at wholesale price and sell at retail price.
You earn 50% on each sale you make. That tells how much “extra” they have on their prices!”
2) Earn from commissions on Team Orders: As a beauty consultant, you must have at least ONE active downline and be promoted to Senior Consultant in order for you to qualify for team commissions. You are eligible to earn at least 4% commissions on all your downline’s sales, however this can reach as much as 13% as you move up the ladder.
3) Earn Team Building Bonuses: These are set dollar bonuses, ranging from $50 to $3,000 depending on satisfactory performance displayed and leadership level. You can get a full detail of this on the official Mary Kay Website.
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How Much Does It Cost to Become a Mary Kay Beauty Consultant?
To become a Mary Kay Consultant, you must sign an agreement and pay $100 for your “starter kit.” However, in order to be active, you must place a $200 wholesale Mary Kay product order with the company every 3 months, although 50% discount is guaranteed but only for the 3 months.
Mary Kay Training and Support
Although Mary Kay usually tell you that when you join, they have free trainings and events but I have heard a lot of complaints about the so-called “free” training and company event. As soon as you join, you will get to know that they are not that free. For local meetings, you will be charged a fee from $5 to $10, while Company events usually cost a fee of $75 which covers the travelling cost and hotel accommodations.
Personally, I think it’s misleading to the Mary Kay reps if these events are being promoted or regarded as free but they are still required to pay to attend these events.
Pros & Cons
- Unlike many business opportunities that may require thousands of dollars in investment capital to get started, with Mary Kay a minimum amount of only $100 is required.
- You can earn commissions from direct sales and downline efforts (=>Passive income)
- You have a freedom to determine the hours you work and your level of commitment to the position.
- There are usually other fees to be paid.
- No guaranteed income, and no guarantees you will succeed. Compare to a normal day job where you would be selling cosmetics.
- Building a Mary Kay business also requires a large amount of self-discipline to recruit others which can be difficult for some people.
- +95% people lose money after starting in Mary Kay
- Prices are very expensive
Conclusion – Is Mary Kay a Ponzi Scheme?
Mary Kay is not a Ponzi scheme. They have been around for years, always recruiting and pushing their products which seems to be solid. If you have natural sales skills and looking for an opportunity to earn money, then Mary Kay may be okay for you, however it is just best you know that Mary Kay is not for everyone.
I don’t personally recommend Mary Kay to anyone because I know there are much better and valuable ways to make money from your home.
There have been numerous cases of Mary Kay consultants not being able to make a sustainable income while most even struggle to break even. Many of them quit and are stuck with Mary Kay products worth hundreds of dollars they are not able to sell. So, please if your financial situation demands that you need a steady, and reliable source of income, a Mary Kay consultant career may not be the best choice for you.
If you are looking for much more legit way to make a living, have a look at Wealthy Affiliate. It is not an MLM-system but it teaches how you can create an successful online business. Of course, you can promote MLMs through their tips if you want but you don’t need to. I am not promoting a single MLM through Wealthy Affiliate but I am still making money every month.
Wealthy Affiliate teaches you how you can create your own website, attract thousands of visitors and monetize your website. You can be promoting cosmetics or anything else. You don’t need to have your own products because can just promote other people’s products are earn commissions.
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Do you have experiences about Mary Kay or other similar MLM-systems?