MARY KAY: Hot or NOT? (Part 2)

(FranchisePick.Com) This is the second of a series of guest posts on the Mary Kay cosmetics business opportunity by David Shepherd, publisher of the Balanced Mary Kay blog. Thanks to David for taking me up on the invite to guest post.

Are you a Mary Kay consultant? Ex-consultant? Customer? Ex-customer? Please share you experience and opinion with a comment at the bottom of this post.

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Also read: MARY KAY: Hot or NOT? (Part 1)

Mary Kay Cosmetics: Hot or Not? (Part 2) by David Shepherd

Advertising Dollars.
Advertising is a very expensive and highly speculative proposition. Although TV stations, newspapers, and other outlets as well as the agencies that represent them would like you to believe that placing your advertising with them will produce excellent results, the truth of the matter is that it is a crapshoot.

• What message will people respond to?
• What are the people I want to reach looking at?
• How can I guarantee that the money I am spending will get enough of a response to make it worthwhile?

These are all very subjective questions and questions that major companies spend millions of dollars to try to figure out. For instance, in the U.S. alone, Proctor and Gamble spent $5.2 Billion in advertising dollars in 2007. AT&T, Verizon and GM each spent just over $3 Billion in 2007. (Source: Advertising Age | Data Center June 23, 2008)

Mary Kay, on the other hand, spends very little on advertising. (I do not have numbers, but it is well known that you do not often see commercials or ads for Mary Kay.) Instead, they elect to offer the money they would have spent on TV, Radio, Newspaper, Magazine, etc… to their sales force and consumers.

From what is known as a “personal use” consultant who does little more than buy the product at 50% of retail (provided she purchase the minimum of $200 wholesale per year) to the career style consultants, their strategy is to “get the word out” about Mary Kay in a grassroots, word of mouth manner. In essence, they are saying, “you find people to buy our product and we will give you a cut of the profit”. You can’t say that to a TV station. All you get from a TV station is how many dollars you have to pay them to put your message on their airwaves. And it is (typically) not based on how well your message performs.

Naturally, critics of this concept will point out that by not advertising, they are making it more difficult for the consultant to reach people that may be interested in the product. This is a very difficult position to defend though, because the 50% being offered is essentially the advertising strategy. The consultant IS the advertising. If they advertised, the consultant would become an employee and most likely get paid an hourly rate to stand behind a counter. Both strategies have their strengths and weaknesses, and some might feel strongly that one is better than the other, but practically speaking, this is a strategy discussion and not a moral or ethical dilemma. In other words, neither strategy is inherently evil. They are business decisions and aligning yourself with one or the other is, as they say, “just business”.

Low entry cost and “I need HOW much inventory?”
Probably one of the most contentious aspects of this business opportunity is the cost of involvement. It is not difficult to guess at the reasons that Mary Kay sets the “cost of joining” so low. For just $100 (plus tax and shipping) you are “in”. There are very few people that can’t afford to drop a Benjamin on a venture such as this. This means more people out there talking to friends, family and other acquaintances about the company’s products. From the company’s point of view, there can not be “too many” consultants. From the consultant’s perspective, this is desirable because they are being offered the opportunity to earn a commission as a company representative for a very nominal startup cost.

Detractors point out a number of problems with this element of the Mary Kay opportunity. And, arguably, this one facet creates a quandary of epic proportions. Accusations fly about recruiters promising all sorts of magical outcomes from this little $100 investment. Many former consultants have complained that they were given the impression that their hundred dollar investment was literally all they would have to do. The rest would just fall into place for them and they would soon be counting their untold riches and going on fabulous vacations without a worry in the world. While this premise is laughable to most rational adults, and is not at all supported by any of the official company literature, it seems to play well to the greedy or desperate side of many and becomes a source of great disillusionment when they are not immediately ushered into the ranks of the uber-affluent.

Further generating frustration regarding the startup cost, many who were sold on the absurd “$100 =guaranteed success” notion are led to believe that they “can’t sell from an empty cart” so if they really want to be successful, they need to stock up on a full inventory.

If you have a client base and move a lot of product inventory IS a very good investment, but the impression they are sold on is that somehow, magically, the very act of obtaining inventory will bring customers to you, and as before, you will be whisked away to that utopian place where all the billionaires hang out and count their money. This is not the Mary Kay that the company tries to promote. You won’t find these sentiments, spelled out or implied, in any of the official company literature. Nonetheless, as with any industry or company, when a persuasive con-artist meets a greedy or desperate individual “official company literature” is rarely brought into the conversation.

From what I have been able to observe, evidence that this sort of manipulation happens – more than in isolated situations – is anecdotal at best. While it is obvious that there are some that outright claim these kinds of magical results from just spending money, and far more that imply the same, it also seems that there are a great deal that simply “hear what they want to hear” (great potential, unlimited earning potential, flexible schedule) and “ignore what they don’t want to hear” (hard work, takes time to build) and far more that knew they would get out of it (earnings) what they put into it (effort and energy) and are satisfactorily adjusted to their position (personal use/hobby level, part-time, or career level). While it is true that few make it to the “executive income earning” level (and as such, this should not be held as a “selling point” to a prospective recruit anymore than the starting salary of the CEO of Best Buy should be “pitched” to an applicant at that company) “executive income” is not (or at least should not be) the reason for joining Mary Kay.

What do you think? Share a comment below.

David Shepherd is an account executive at a multicultural marketing and advertising agency in LA. His wife sells Mary Kay and he blogs about it at Balanced Mary Kay.

Read David Shepard’s series Mary Kay: Hot or NOT? (Or, as I lovingly call it, The Kaybot Manifesto)

MARY KAY: Hot or NOT? (Part 1 of 4)

MARY KAY: Hot or NOT? (Part 2 of 4)

MARY KAY: Hot or NOT? (Part 3 of 4)

MARY KAY: Hot or NOT? (Part 4 of 4)

If anyone would like to print a rebuttal or offer an alternative article, please email Sean at info[at]ideafarm.net

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