Is Mary Kay a Pyramid Scheme? Or The Holy Grail of MLMs?
Is Mary Kay a pyramid scheme designed to target women? Can you actually make good money with their compensation plan? Or is it another multi-level marketing company that promises the world but fails to deliver a cent? I spent hours researching Mary Kay, and what I uncovered will surprise you.
Mary Kay Quick Review:
Skincare, Beauty, and Hair.
Is Mary Kay a Pyramid Scheme?
Technically, Mary Kay is not a pyramid scheme because there are products to promote, as well as other bonuses and incentives, income is not directly tied to recruiting new members.
In truth, much like most multi-level marketing companies, Mary Kay is almost identical to a pyramid scheme, and the chances of success are very low. To make the most of your bonuses, you have to recruit new people under you, so your income is directly tied to bringing in new members, which is the same as a pyramid scheme.
In this article, I'll reveal how Mary Kay's compensation plan is not a recommended way to make money from home. There are some important things that you need to know about this company.
What is Mary Kay?
Founded in 1963, Mary Kay is one of the oldest direct-selling businesses to date. And with offices in 36 counties, Mary Kay is ranked as the sixth largest network marketing company in the world. Mary Kay is one of the original multi-level marketing companies.
Countries with Mary Kay offices:
Mary Kay primarily operates in the cosmetic and skin care industry, with a wide range of products, such as;
- Skin Care
- Makeup Remover
- Acne Treatment
- And many others.
Currently, Mary Kay's best selling products are Eye Makeup removers and Mascara. On the surface, Mary Kay looks much like any other multi-level marketing company in the healthcare industry.
Other similar MLMS:
Are Mary Kay Products Good?
I can't personally comment on the quality of the products, but based on my research, the overall opinion on the product quality is that it's not bad. At least, it doesn't make your hair fall out, like Monat, and there are no major complaints or lawsuits related to the quality of the products.
Bear in mind, you can't buy any products from Mary Kay unless you have the ID of a Beauty Consultant. In other words, you have to buy products through someone's affiliate link.
Affiliate marketing success stories!
~ real people, real work
4 - 5 figures/month online!
Mary Kay Compensation Plan:
When it comes to Mary Kay, what most people are concerned about is the Compensation Plan. It's the plan that promises prizes, perks, money, dream fulfillment, freedom, fun, and even a Mary Kay Career Car.
And it sounds good on paper... In practice, no so much.
Chances are you have been approached by someone trying to sell you on this compensation plan, and that's the reason you're doing more research to see if Mary Kay is a pyramid scheme or a worthwhile opportunity.
Getting Started with Starter Kits:
For starters, to participate in the compensation plan you have to connect with a consultant and then (surprise, surprise) buy a starter kit. The good news is the starter kits aren't too expensive:
Mary Kay Starter kits:
- Mary Kay eStart - $30 (no samples)
- Mary Kay Starter Kit - $100 (samples included)
These starter kits include more information about the opportunity, marketing strategies, tools, a personalized website, and other items. Basically, it's an introduction to the Mary Kay products and program.
I wouldn't worry too much about the ranks because most people (80% of new members) don't make it past the first rank.
From there, you can participate in the compensation plan. As is the norm with these MLM compensation plans, there are multiple ranks and titles, some of which we'll mention below:
- Independent Beauty Consultant (Entry-level)
- Senior Consultant
- Star Team Builder
- Team Leader
- Independent Sales Director
- Senior Sales Director
- Executive Senior Sales Director
- National Sales Director
- And several others.
The plan starts at the Independent Beauty Consultant level. At that level you can make money on retail sales and a flat team-bonus for every person you add under you. To mark your account as "Active" you need to not only buy a starter kit but also order $450 worth of retail orders within 2 months.
Income for Independent Beauty Consultants:
To qualify for the next rank, Senior Beauty Consultant, you'll need to have a minimum of 1 or 2 active personal team members under you, and you need to remain active by continuing to order $225 every 2 months.
At the Senior Beauty Consultant level, you'll qualify for extra bonuses, such as team-building commissions and bonuses. The requirements to move to the next rank are 3 - 4 active personal team members, and it goes on like that...
The first team bonus is a flat $50 when someone qualifies for the Great Start program, which is basically any order that is more than $600 in the wholesale section. You can earn this bonus at the first level.
Besides that, Mary Kay members can earn other team bonuses, that are unlocked as you progress in the plan. Starting from Senior Beauty Consultant, you can earn commissions on wholesale orders of personal team members, starting from 4% to a maximum of 13%.
At the Independent Senior Sales Director level you can start earning first-line offspring commissions. The second-line offspring commissions are unlocked at much higher levels, Executive Senior and Elite Executive Senior.
In a Nutshell:
Much the same as every MLM compensation plan out there, there's really nothing worth talking about here. The whole idea of the compensation plan is to keep everyone active and buying products at all times. Most people can only do that for so long without going bankrupt or in debt.
How Much Money Can You Make with Mary Kay?
Mary Kay hasn't released an official income disclosure statement, but the Canadian website has report called "Earnings representation" that reveals some interesting information.
Bear in mind, these are the figures for Canadian members, not global, and not the U.S, but I imagine they're similar.
Take a look at this chart:
To start, 83.2% of Mary Kay Beauty Consultants are not eligible to earn commissions. Remember, the requirements to become eligible are buying a kit and having at least one active member under you. 15.2% of the remaining members are eligible for commissions, and earn an average of $206 in annual commissions.
From there, it's a steep drop, and only 1.7% of members reach the next level, Independent Sales Director, with an annual income of $20,137 and it took them, on average, four years to reach that position.
In short, it doesn't look like a lot of people are making money with Mary Kay. Even if you do make some sales, you have to factor in other expenses, such as inventory, party hosting fees, website fees, and all other expenses.
How Can You Promote Mary Kay?
You're supposed to promote Mary Kay by hosting the classic "Parties" and using the samples to get people to either buy the products through you or sign-up as team members under you. I'm sure you have been invited to one of these parties, the practice is very common nowadays.
Besides that method, you can also promote the products on social media and direct people towards a personalized Mary Kay website. Mary Kay does provide marketing material, but to be honest, the marketing strategies recommended by Mary Kay are very outdated and ineffective.
In my opinion, if your were to remove the products, Mary Kay is a pyramid scheme.
Is There an Alternative?
The bottom line is I do not recommend the Mary Kay business opportunity because it's too similar to a pyramid scheme. Most people (over 80%) who join the program don't even qualify for commissions, even after buying a Starter pack and probably ordering personal products.
Having said that, you might still be interested in making money online from your home. There are plenty of ways to make money online from home besides MLMs. I personally recommend learning affiliate marketing because it's easy to get into and the payoff can be huge.
The program I recommend is called Wealthy Affiliate, and it has awesome training material, and a community of helpful members (like me!). Don't give up on your dreams of making money from home just because multi-level marketing is a bad idea!
What you think? Is Mary Kay a pyramid scheme? Or do you like their opportunity?
Mary Kay$100 Minimum
- Cheap-enough Starter Kits.
- Lots of Training Material (Cold Call Scripts, etc).
- Decent Quality Products.
- Income is Tied to Your Ability to Build a Team.
- You Have to Order $450 Every 2 Months to Stay Active.
- Lots of Admin Fees (Website, Seminars, Back-office Tools, Kits, Hosting Parties, etc)