Mary Kay Inc. is an American privately owned
multi-level marketing
Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling th ...
company.
According to ''
Direct Selling News'', Mary Kay was the sixth largest network marketing company in the world in 2018, with a wholesale volume of US$3.25 billion.
[Direct Selling News, May 2, 2018: ''DSN Announces the 2018 Global 100!'']
Retrieved 2019-03-16 Mary Kay is based in
Addison, Texas
Addison is an incorporated town in Dallas County, Texas, in the United States. Addison is situated to the immediate north of the city of Dallas, with a 2020 census population of 16,661. Addison and Flower Mound were the only two Texas municipaliti ...
. The company was founded by
Mary Kay Ash
Mary Kay Ash (born Mary Kathlyn Wagner; May 12, 1918 – November 22, 2001) was an American businesswoman and founder of Mary Kay Cosmetics, Inc. At her death, she had a fortune of $98 million, and her company had more than $1.2 billion in sa ...
in 1963. Richard Rogers, Ash's son, is the chairman, and David Holl is president and was named CEO in 2006.
[2011 Press Kit The Company](_blank)
[Mary Kay Company Information page](_blank)
[Mary Kay At-A-Glance — June 2006]
Business model
![Mary-Kay-Addison-TX-6737](https://upload.wikimedia.org/wikipedia/commons/0/00/Mary-Kay-Addison-TX-6737.jpg)
Mary Kay sells
cosmetics
Cosmetics are constituted mixtures of chemical compounds derived from either natural sources, or synthetically created ones. Cosmetics have various purposes. Those designed for personal care and skin care can be used to cleanse or protect ...
through a
multi-level marketing
Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling th ...
model. Mary Kay distributors, called beauty consultants, can potentially make income by
directly selling to people in their community, and also receive a commission when they recruit others to begin selling under their distribution network. Mary Kay distributors must purchase a $100 starter kit to qualify.
Mary Kay releases few details about the average income of its sellers.
[
Starting in 1963 with 318 consultants and sales of $198,154,] the company exceeded $500 million in sales through 220,000 consultants by 1991. In 1995, its sales had grown to $950 million, including $25 million in Russia. As of 2017, Mary Kay’s continuous multinational expansion had seen its sales grow to $3.7 billion with 2.5 million consultants, 39,000 directors and 600 national directors.[MK Corporate Press Kit 2006](_blank)
In March 2020, Mary Kay closed operation in Australia
Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
and New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
.
Manufacturing plants
The company's primary manufacturing plant is in Dallas, Texas
Dallas () is the third largest city in Texas and the largest city in the Dallas–Fort Worth metroplex, the fourth-largest metropolitan area in the United States at 7.5 million people. It is the largest city in and seat of Dallas County w ...
. A second plant was opened in Hangzhou
Hangzhou ( or , ; , , Standard Mandarin pronunciation: ), also romanized as Hangchow, is the capital and most populous city of Zhejiang, China. It is located in the northwestern part of the province, sitting at the head of Hangzhou Bay, whi ...
, China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
, to manufacture and package products for that market. A third plant was opened in 1997, in La Chaux-de-Fonds
La Chaux-de-Fonds () is a Swiss city in the canton of Neuchâtel. It is located in the Jura mountains at an altitude of 1000 m, a few kilometers south of the French border. After Geneva, Lausanne and Fribourg, it is the fourth largest city loc ...
, Switzerland for the European market. The Swiss plant closed in 2003.
Cars
In 1968, Mary Kay Ash
Mary Kay Ash (born Mary Kathlyn Wagner; May 12, 1918 – November 22, 2001) was an American businesswoman and founder of Mary Kay Cosmetics, Inc. At her death, she had a fortune of $98 million, and her company had more than $1.2 billion in sa ...
purchased the first pink Cadillac
The Cadillac Motor Car Division () is a division of the American automobile manufacturer General Motors (GM) that designs and builds luxury vehicles. Its major markets are the United States, Canada, and China. Cadillac models are distributed i ...
from a Dallas dealership, where it was repainted on site to match the "Mountain Laurel Blush" in a compact Ash carried. The Cadillac served as a mobile advertisement for the business. The following year, Ash rewarded the company's top five salespeople with similarly painted 1970 Coupe de Ville
A coupe or coupé (, ) is a passenger car with a sloping or truncated rear roofline and two doors.
The term ''coupé'' was first applied to horse-drawn carriages for two passengers without rear-facing seats. It comes from the French past parti ...
cars. GM has painted over 100,000 custom cars for Mary Kay. The specific shade has varied over the years from bubble-gum to soft pearlescent
Iridescence (also known as goniochromism) is the phenomenon of certain surfaces that appear to gradually change color as the angle of view or the angle of illumination changes. Examples of iridescence include soap bubbles, feathers, butterf ...
pink. GM had an exclusive agreement to sell cars of the specific shade only through Mary Kay. The cars are awarded to Independent Beauty Consultants/Directors as company-paid, two-year leases, and Consultants/Directors who choose to buy the cars at the end of the two year lease period are only allowed to resell them to authorized dealers. After the lease expires, the cars are repainted before being resold.
Mary Kay has different car incentive levels for its Consultants. Independent Beauty Consultants and Directors can earn the use of a silver Chevrolet Malibu
The Chevrolet Malibu is a mid-size car manufactured and marketed by Chevrolet from 1964 to 1983 and again since 1997. The Malibu began as a trim-level of the Chevrolet Chevelle, becoming its own model line in 1978. Originally a rear-wheel-drive ...
or a cash compensation of $425 a month. Independent Sales Directors can also earn a black Chevrolet Equinox
The Chevrolet Equinox is a series of crossover SUVs from Chevrolet introduced in 2004 for the 2005 model year. It replaces the North American Chevrolet Tracker and Chevrolet S-10 Blazer. The third-generation Equinox also replaced the first-ge ...
, Chevrolet Traverse
The Chevrolet Traverse is a full-size crossover SUV with three-row seating built by General Motors. It is built on the same platform as the GMC Acadia and Buick Enclave, known as the Lambda platform for first generation, and the C1XX for seco ...
, Mini Cooper Mini Cooper may refer to:
*Cars of the original Mini series called the "Mini Cooper", made by the British Motor Corporation and its successors 1961–1971, and 1990–2000
*Cars of the Mini (marque), including a number of different models produced ...
or $500 a month. Top performing Independent Sales Directors can choose between the pink Cadillac XT5
The Cadillac XT5 (short for Crossover Touring 5) is a compact luxury / D-segment crossover SUV manufactured by General Motors. It was introduced at both the Dubai Motor Show and LA Auto Show in November 2015. The XT5 replaced the Cadillac SRX c ...
or XT6, or cash option of $900 a month. The specific qualifications for earning the car depend upon the country, and vehicle that is desired. If those qualifications are not met, then the Independent Beauty Consultant/Director has to pay for a portion of the lease of the car for that month. Meeting the qualifications entitles the Independent Beauty Consultant/Director to pay no monthly lease and 85% of the car insurance, or a pre-determined cash compensation award. In 2011, a solid black Ford Mustang
The Ford Mustang is a series of American automobiles manufactured by Ford. In continuous production since 1964, the Mustang is currently the longest-produced Ford car nameplate. Currently in its sixth generation, it is the fifth-best selli ...
was introduced as an incentive. In 2014, a black BMW was introduced in its place, although the pink Cadillac remains the top reward for those Independent Directors whose units purchase over $100,000 or more of MK products at wholesale cost in a year. Internationally, the cars available also vary depending on the regions and countries.
Earnings for salespeople
There are two ways for Independent Beauty Consultants to earn money in Mary Kay: recruiting and retail sales.
Recruiting commission earnings
"Recruiting commission earnings" reflects the commission and bonuses of 4, 9 or 13% that one earns from the wholesale purchases of MK products by their team or unit. These bonuses come straight from Mary Kay corporate and not from the Independent Beauty Consultants' team or units pockets. It does not include income from retail sales nor does it include income from the Mary Kay tools business.
Retail sales earnings
Mary Kay Independent Beauty Consultants earn a 50% gross profit on products they sell at full retail price. There is no tracking by the company of actual sales. The quoted figure of US$1,057.14 per year (2015) for the average consultant derives from dividing the annual wholesale sales by Mary Kay Inc., by the number of Mary Kay consultants. This figure does not account for product returns, eBay, auctions, sales at a discount, and purchases by "personal use consultants"—all of which would lower this figure.
Consultant turnover rate
A 68.6% per annum turnover figure has been calculated based upon information supplied by Mary Kay (USA) to the Federal Trade Commission
The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
.[Mary Kay Letter to the FTC regarding proposed changes in the rules governing MLMs.](_blank)
An 85% per annum turnover figure has been calculated, based upon the data supplied by Mary Kay (Canada).[Mary Kay Canadian Earnings](_blank)
That document excludes individuals who earn a commission and are in the company for less than one year. It also excludes individuals who are in the company for more than one year but do not earn a commission check.
Court cases
''Woolf v. Mary Kay Cosmetics''
The 2004 court case ''Woolf v. Mary Kay Cosmetics'' argued that workplace rights could be applied to independent contractors who worked from their home. This decision was stayed and then reversed after an appeal. The Supreme Court denied certiorari
In law, ''certiorari'' is a court process to seek judicial review of a decision of a lower court or government agency. ''Certiorari'' comes from the name of an English prerogative writ, issued by a superior court to direct that the record of ...
on 31 May 2005.[ Order List:544 US/ref> In this case, Woolf was terminated from her position as Independent Sales Director because her unit failed to make production for three consecutive months. Woolf contended that her firing was illegal, because she was suffering from ]cancer
Cancer is a group of diseases involving abnormal cell growth with the potential to invade or spread to other parts of the body. These contrast with benign tumors, which do not spread. Possible signs and symptoms include a lump, abnormal b ...
.
Liquidator court cases
In May 2008, Mary Kay, Inc., sued Touch of Pink Cosmetics, a website that sells product from former Mary Kay consultants at heavily reduced prices. The company claims that Touch of Pink interferes with its business by offering to purchase inventory from discontinued Independent Beauty Consultants, and that Touch of Pink's use of the Mary Kay trademark
A trademark (also written trade mark or trade-mark) is a type of intellectual property consisting of a recognizable sign, design, or expression that identifies products or services from a particular source and distinguishes them from others ...
in reference to Mary Kay products it sells is deceiving. The jury found in favor of Mary Kay and awarded a judgement of $1.139 million.
On 20 July 2009, Mary Kay, Inc., sued Pink Face Cosmetics for trademark infringement
Trademark infringement is a violation of the exclusive rights attached to a trademark without the authorization of the trademark owner or any licensees (provided that such authorization was within the scope of the licence). Infringement may o ...
. The specific issue appears to be the use of the Mary Kay name, in selling Mary Kay products on eBay
eBay Inc. ( ) is an American multinational e-commerce company based in San Jose, California, that facilitates consumer-to-consumer and business-to-consumer sales through its website. eBay was founded by Pierre Omidyar in 1995 and became a ...
and other Internet venues for less than the wholesale
Wholesaling or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. In ...
cost of the products.
References
{{DEFAULTSORT:Kay, Mary
History of cosmetics
1963 establishments in Texas
Companies based in Addison, Texas
Retail companies established in 1963
Cosmetics companies of the United States
Multi-level marketing companies
Privately held companies based in Texas