by Sarah Wyatt
Enormous video screens in the arena displayed images of founder Mary Kay Ash as the crowd shrieked in delight and burst into applause. Just offstage, 65-year-old Anne Newbury prepared to be honored as the first-ever Mary Kay independent national sales director whose team earned more than $1 million in commissions in a single year.
The Dallas Convention Center was rocking last July. Some 42,000 Mary Kay consultants, many clad in red blazers, milled about, in attendance for the three-week national annual gathering known as Seminar.
"Feel the power of pink," the amplified music mandated as pyrotechnics illuminated the arena. The estrogen-infused crowd erupted as Newbury, their coiffed rock star and symbol of the Mary Kay dream, took the stage. Nearing her retirement, her 85,000 consultants had collected more than $11 million in commissions during her career. The company reported Newbury's retirement package guarantees her $8.5 million over the next 15 years.
Mary Kay is no ordinary business. The suburban Dallas-based corporation does almost no advertising to the public. Nor will you find its perfume or lipstick in department stores. Mary Kay's marketing efforts are aimed squarely at the millions of home consultants to whom it sells the hundreds of beauty products it makes. To keep that market strong, Mary Kay must continually replenish its consultant ranks. Like most direct sellers, it loses a high percentage of its worldwide sales force of 1.6 million each year. To attract new ones, Mary Kay depends on its consultants to aggressively recruit. Conventions including Seminar are designed to motivate new consultants and keep seasoned ones in the fold. Those events usually include an appearance by a national sales director such as Newbury, names revered throughout Mary Kay.
Yet beneath the pink veneer, Seminar is eerily similar to the historic Indian caste structure. Attendees are segregated by their rank in the company. Top performers eat hot meals on fine china in an upscale dining hall while less successful or new consultants are relegated to cold cereal served on Styrofoam in a simple cafeteria. The most convenient and prestigious convention hotels are reserved for the top performers. Even seating at the awards ceremony is determined by rank —top performers sit in the arena, while most of the other attendees watch the proceedings via monitors in meeting rooms.
Marianne Ellis, co-author of the upcoming book, Mary Kay Unmasked: The Truth Behind the Pink Cadillac, said, “At Seminar you have a name badge that you are required to wear everywhere - it lists your name, but more importantly, it lists your level in the pyramid, where you are sitting and if you won certain things. It's your Scarlet Letter if you're a Mary Kay nobody.”
In a state of transition, the company had been without its charismatic figurehead since 2001, when effusive founder Mary Kay Ash died. Ash’s slogan, "God first, family second, career third", attracted fundamentalist Christian homemakers to the ranks, and the conventions still appeal to that demographic.
Mary Kay's blend of manufacturing and motivation seems increasingly anachronistic. The powwows celebrating traditional female stereotypes and conservative Christian themes alienate some recruits. Even after eliminating the middleman, critics say many department store cosmetics are still more economical.
Despite the implied claims of impressive earning potential to recruits, Mary Kay reveals little solid information about the financial side of the company. Consequently, there is little reliable data about actual net earnings by consultants, which some critics estimate may average only $1,300 annually.That's not to say Mary Kay isn't a moneymaker. The corporation, believed to be worth $2.2 billion, fields a pink army of 1.6 million consultants in 36 countries. On the way to achieving that global market, Mary Kay also acquired something else: a controversial reputation. The company is alleged by some critics to pressure consultants to attend expensive and time-consuming motivational retreats where they are strongly urged to order excessive inventory.
“I feel the company describes earning potential the same way the state advertises the lottery: ‘You could win 27 million.’ They would be careful to say ‘earn, not win’ and ‘only you determine your earning potential’ but really, with 50% overhead in the product, the mailers, the supplies, the gas... I spent so much trying to make money that I was able to legally claim a loss every year. I do not think you can make anywhere near what they claim if you are focused on the customers,” said Tiffany Jakubowski, a former consultant.
According to statistical analyses performed by Robert Fitzpatrick, President of Pyramid Scheme Alert on Amway, a similar multi-level marketing company which makes its finances public (unlike privately held Mary Kay), 99% of Amway sales representatives suffer significant financial losses.
China, where Mary Kay opened its first factory in 1995, is expected to be Mary Kay Cosmetics largest market in the next decade, unseating the United States for the top spot. The company had to adapt to cultural female beauty stereotypes in order to succeed there. In keeping with the Asian preference for white skin, the company offers skin lighteners in the Chinese market rather than the bronzers sold in the United States.
Mary Kay is test marketing in India with the expectation to begin consultant programs as early as September. The move is a shrewd one for the corporation: the nation will likely surpass China as the world's most populous country in the next few decades. Analysts estimate that India will sustain economic growth of about nine percent annually for the next five years, with a consumer goods market that could reach $400 billion by 2010.
The unanswered question is whether these moves into developing economies are good for the potential female consultants. Some former North American consultants cite concerns that the company will exploit vulnerable workers in these markets. Members of a cautionary website unaffiliated with the company, Pinklighthouse.com, fear that most women in China and India do not have the financial resources to “line up to drink the pink Kool-Aid.”
“I think that the women in these countries are so desperate for the type of dream Mary Kay sells that many of them will work their tails off, just like us here in the United States, and end up worse off than they already are,” said Sandy, a former high-ranking sales director who requested her last name be withheld.
Former consultant Elizabeth Hesse draws parallels between the women of developing countries and low-income North American women. She believes both may perceive consultant work as a way to build a career without the obstacles of higher education and childcare, and they are recruited after agreeing to free facials by current consultants. Hesse, a single mother who was dependent on public assistance and Medicaid when she signed up as a consultant, believes low-income women may be especially vulnerable to financial hardship stemming from consultant work.
“I had several recruits like this - they saw it for the opportunity to better their situations,” Hesse said. “They will sign up, usually with money that's borrowed...you have a plethora of these types of low-income women...they jump on the opportunity for a free facial.”
In 2003, the company threatened employees at its Shenzhen factory in China with termination and even arrest if they practiced Falun Gong, a pacifist health and spiritual philosophy banned by the Chinese government in 1999. After activist organizations declared the corporate policy a human rights violation, Mary Kay retracted the rule. Marianne Ellis believes that rather than aiming for economic and political improvement for Chinese women, Mary Kay may be complicit in the status quo of worker exploitation and human rights abuses.
“I believe that Mary Kay’s expansion into India and China will be very detrimental to the women in those countries,” Ellis said. “At least in China, there are more governmental controls over how the company can operate. Mary Kay has already demonstrated some shady practices in getting established there, agreeing to make consultants sign a contract that they won't practice a specific religion.”
Laura, administrator of Pinklighthouse.com, fears that the company’s expansion may enlarge the loopholes in already fragile global labor protections. She believes Mary Kay consultant work is the worst of both worlds: the home-based contractors lack the guaranteed hourly pay and benefits of traditional employment, as well as the empowerment common in individual business ownership.
“As an independent contractor, you get no benefits and you don't really represent the company,” Laura said. “You are restricted in how and where you can advertise. It's basically a low-paying job with no benefits. Great for the company because they save tons of money.”
The Mary Kay Corporation declined requests for an interview or a written statement.
About the Author
Sarah Wyatt is a freelance travel and outdoors writer. A native of Iowa and a Native American, she holds a degree in Journalism and English. Wyatt has been a freelance writer for 11 years, with work appearing in Texas Monthly, Mother Jones and Theater Magazine.