Mary Kay

Last updated

Mary Kay Inc.
Company type Privately held company
Industry Multi-level marketing
FoundedSeptember 13, 1963;61 years ago (1963-09-13)
Dallas, Texas, U.S.
Headquarters Addison, Texas, U.S.
Key people
Products Cosmetics, skin care
RevenueUS$2.7 billion (2022) [1]
Number of employees
Staff 5,000
Salespeople 3.5 million worldwide (2015) [2]
Website www.marykay.com

Mary Kay Inc. is an American privately owned multi-level marketing company. [3] [4] [5] [6] [7] Mary Kay is based in Addison, Texas. The company was founded by Mary Kay Ash in 1963. Richard Rogers, Ash's son, is the chairman, and Ryan Rogers, Ash's grandson, was named CEO in 2022. [8] [9]

Contents

History

Foundation–2000

In 1963, Mary Kay Ash founded the company based on a line of cosmetics she had been wearing for several years. [10] [11] She purchased the formula from a woman who had been selling it privately. [10] Originally the company had 318 consultants and sales of $198,154. [12] By 1991, it exceeded $500 million in sales through 220,000 consultants. [13] In 1995, its sales had grown to $950 million. [14]

2001–present

Founder Mary Kay Ash died on November 22, 2001. [15] In March 2020, the company closed operation in Australia and New Zealand. [16] [17] In November 2022, David Holl, the company’s CEO since 2006, retired after nearly 30 years with the company but remained chairman of the board. [8] In November 2022, Ryan Rogers was named CEO. [18] [19]

Business model

Mary Kay corporate headquarters in Addison, Texas Mary-Kay-Addison-TX-6737.jpg
Mary Kay corporate headquarters in Addison, Texas

Mary Kay sells cosmetics through a direct marketing model. [20] Mary Kay consultants, called beauty consultants, can 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. [21] Mary Kay consultants must purchase a $100 starter kit to qualify. [22] Mary Kay releases few details about the average income of its sellers. [22]

Manufacturing plants

The company's primary manufacturing plant is in Dallas, Texas. [23] A second plant was opened in Hangzhou, China, to manufacture and package products for that market. [24] A third plant was opened in 1997, in La Chaux-de-Fonds, Switzerland for the European market. The Swiss plant closed in 2003.

Cars

In 1968, Mary Kay Ash purchased the first pink Cadillac 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 cars. [25] [15] 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 pink. GM had an exclusive agreement to sell cars of the specific shade only through Mary Kay. The cars are awarded to consultants 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. [26]

Mary Kay Pink Cadillac Convertible First pink Cadillac.jpg
Mary Kay Pink Cadillac Convertible

Mary Kay has different car incentive levels for its Consultants. Consultants can earn the use of a silver Chevrolet Malibu or a cash compensation of $425 a month. Consultants can also earn a black Chevrolet Equinox, Chevrolet Traverse, Mini Cooper or $500 a month. "Top performing" consultants can choose between the pink Cadillac XT5 or XT6, or cash option of $900 a month. [27] [28] The specific qualifications for earning the car depend upon the country, and vehicle that is desired. If those qualifications are not met, then the consultant has to pay for a portion of the lease of the car for that month. Meeting the qualifications entitles the consultant to pay no monthly lease and 85% of the car insurance, or a pre-determined cash compensation award. [29] [ non-primary source needed ] In 2011, a solid black Ford Mustang was introduced as an incentive. [30] In 2014, a black BMW was introduced in its place, although the pink Cadillac remains the top reward for those consultants whose units purchase over $100,000 or more of MK products at wholesale cost in a year. [31]

Consultants

There are two ways for Mary Kay consultants to earn money in Mary Kay: recruiting and retail sales. 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. Consultants may also 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. [10]

Based upon information supplied by Mary Kay (USA) to the Federal Trade Commission, [32] Mary Kay has a 68.6% per annum turnover rate. An 85% per annum turnover figure has been calculated, based upon the data supplied by Mary Kay (Canada). [33] This 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.

Each year the company holds an annual conference and seminar in Dallas, TX. The conference consists of four consecutive events over two weeks. [34]

Research

In 2023, Mary Kay announced a partnership with the European Society for Dermatological Research (ESDR), a non-profit, to create a grant program. The program will grant two scientists $20,000 to go towards research relating to skin health and diseases. [35] Mary Kay stated that the goal would be to treat people who suffer from skin and venereal diseases. Dr. Michael Cangkrama of Switzerland and Dr. Clarisse Ganier of the UK received the grant. [35]

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 on 31 May 2005. [36] 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. [37]

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 in reference to Mary Kay products it sells is deceiving. [38] The jury found in favor of Mary Kay and awarded a judgement of $1.139 million.[ citation needed ]

On 20 July 2009, Mary Kay, Inc., sued Pink Face Cosmetics for trademark infringement. [39] The specific issue appears to be the use of the Mary Kay name, in selling Mary Kay products on eBay and other Internet venues for less than the wholesale cost of the products. [39]

Related Research Articles

Avon Products, Inc. is an Anglo-American multinational company selling cosmetics, skin care, perfume, and personal care products. It is a multi-level marketing company based in London. In 2020, Avon had annual sales of $9.1 billion worldwide.

<span class="mw-page-title-main">Mary Kay Ash</span> American businesswoman (1918–2001)

Mary Kay Ash 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 sales with a sales force of more than 800,000 in at least three dozen countries.

Jim D. Underwood is a professor of management at Dallas Baptist University and the author of numerous books about business, including the best-selling More Than a Pink Cadillac: Mary Kay Inc.'s Nine Leadership Keys to Success (2003) about Mary Kay Ash.

Holiday Magic was a multi-level marketing organization, founded in 1964, by William Penn Patrick (1930–1973) in the United States. Originally the organization distributed goods such as home-care products and cosmetics. Company distributors were encouraged to recruit other distributors in a multilevel marketing structure, which was later characterized as a pyramid scheme.

<span class="mw-page-title-main">Amsoil</span> American multi-level marketing company

AMSOIL Inc. is an American corporation based in Superior, Wisconsin that primarily formulates and packages synthetic lubricants, fuel additives, and filters. Company founder Albert J. Amatuzio developed several synthetic motor oil formulations throughout the mid-to-late 1960s. He was commercially selling synthetic motor oil by 1968. In 1972, AMSOIL 10W-40 Synthetic Motor Oil became the world's first synthetic motor oil to meet American Petroleum Institute requirements, which prompted the company to adopt "The First in Synthetics®" as its tagline. The company introduced several other synthetic lubricants that represented industry firsts throughout the 1970s and early 1980s. It distributes products in North America via a network of independent dealers paid commissions on sales.

<span class="mw-page-title-main">Nu Skin Enterprises</span> American multi-level marketing company

Nu Skin Enterprises, Inc. is an American multilevel marketing company that develops and sells personal care products and dietary and nutritional supplements. Under the Nu Skin and Pharmanex brands, the company sells its products in 54 markets through a network of approximately 1.2 million independent distributors.

Nature's Sunshine Products, Inc. also known as "NSP", is a manufacturer of dietary supplements, including herbs, vitamins, minerals, and personal care products. It is based in Lehi, Utah, with a manufacturing facility in Spanish Fork, Utah.

<span class="mw-page-title-main">Juice Plus</span> Line of dietary supplements

Juice Plus is a branded line of dietary supplements. It is produced by Natural Alternatives International of San Marcos, California, for National Safety Associates. Introduced in 1993, the supplements are distributed by NSA via multi-level marketing. Juice Plus supplements contain fruit and vegetable juice extracts with added vitamins and nutrients.

Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial and sometimes illegal 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 the company's products or services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system.

Market America is a multi-level marketing company founded in 1992 by JR and Loren Ridinger. Headquartered in Greensboro, North Carolina, the company employed around 800 people as of 2016. The products offered by the company include household cleaning supplies, jewelry, personal care products, auto care, cosmetics, dietary supplements, custom websites, water purifiers, and weight management products. A 2017 lawsuit accused the company of being an illegal pyramid scheme.

Young Living is a multi-level marketing company based in Lehi, Utah. Founded by Donald Gary Young in 1993, it sells essential oils and other related products.

<span class="mw-page-title-main">Tropic Skincare</span> British skincare company

Tropic Skincare is a British online and multi-level marketing company which sells skincare and cosmetic products. The company is based in Croydon, South London. The business is owned by The Apprentice series 7 contestant Susie Ma.

Glenn Wesley Turner (1934–2020) was a salesman best known for his Orlando, Florida based multi-level marketing cosmetic company Koscot Interplanetary, Inc. Turner and Koscot became entangled in numerous legal difficulties and Koscot went out of business in the 1970s. In 1987 Turner was convicted on charges of conspiracy, fraud and operating a pyramid scheme, and sentenced to seven years in prison.

SeneGence International, Inc. is a privately owned American multi-level marketing (MLM) company that sells skincare and makeup products, including the LipSense product line. The company was founded in 1999 by Joni Rogers-Kante who is the CEO and chair. The company is headquartered in Foothill Ranch, Lake Forest, California, with facilities in Sapulpa, Oklahoma.

Arbonne International, LLC, known as Arbonne, is an international multi-level marketing company founded in 1980 in the United States by Norwegian entrepreneur Petter Mørck. Its product lines include vegan skincare, cosmetics, and nutrition. Arbonne's CEO is Jennifer Orlando, who succeeded Tyler Whitehead in July 2023. Arbonne is headquartered in Irvine, California, US, with US offices in Chatsworth, California, Greenwood, Indiana, Addison, Texas, and international offices in Australia, Canada, New Zealand, Poland, and the United Kingdom.

Scentsy is an American multi-level marketing company based in Meridian, Idaho, that sells scented products including wax warmers and other home and body products.

<span class="mw-page-title-main">Younique</span> American multi-level marketing company

Younique is an American Pyramid Scheme that markets beauty products. The company was founded in 2012 by Derek Maxfield, who is CEO, and Melanie Huscroft, and is headquartered in Lehi, Utah. Between 2017 and 2019, Younique was 60% owned by Coty, Inc. In 2019, Coty sold their share of the business back to Maxfield and Huscroft.

Mary C. Crowley, was the founder and CEO of the Texas-based Home Interiors and Gifts, Inc., which became one of the largest direct sales home furnishing operations in America. She was considered to be one of the leading businesswomen in the United States in the 1970s. Crowley was also a published author of works on women in business, and on self-improvement for women.

Pure Romance was a United States-based multi-level marketing company that sells adult products including sex toys. In May of 2023, the company announced it was moving away from the MLM model to become essentially a retail business.

Longrich(Chinese: 隆力奇; pinyin: Lónglìqí:)Bioscience Co., Limited is a multinational company that sells health, organic food, nutritional supplements, beauty, home care and pet care products. Longrich operates under its holding company Jowell Global.

References

  1. "Mary Kay". Forbes. Archived from the original on April 21, 2022. Retrieved February 12, 2021.{{cite web}}: CS1 maint: bot: original URL status unknown (link)
  2. Mary Kay Company Quick Facts Mary Kay Company Quick Facts Archived February 2, 2017, at the Wayback Machine Retrieved 2017-01-28
  3. "Multi-Level Marketing or Illegal Pyramid Scheme?". Government of Michigan. Archived from the original on February 8, 2020. Retrieved February 7, 2020.
  4. Richards, Laura (January 22, 2019). "How MLMs — multilevel marketing schemes — are hurting female friendships". The Washington Post. Archived from the original on January 13, 2020. Retrieved February 7, 2020.
  5. Hicken, Melanie (January 10, 2013). "The money behind Herbalife, Mary Kay and others". CNN Money. Archived from the original on January 13, 2020. Retrieved February 7, 2020.
  6. Ebert, Alex (April 30, 2018). "Trade Group for Amway, Mary Kay Wants States to Limit Labor Suits". Bloomberg Law. Archived from the original on January 22, 2021. Retrieved February 7, 2020.
  7. Gaby, Del Valle (October 22, 2018). "Multilevel marketing companies say they can make you rich. Here's how much 7 sellers actually earned". Vox. Archived from the original on May 11, 2020. Retrieved February 7, 2020.
  8. 1 2 "Mary Kay CEO to step down, hand reins to grandson of Mary Kay Ash". Dallas News. November 1, 2022. Retrieved April 17, 2023.
  9. "Mary Kay | Company Overview & News". Forbes. Retrieved April 5, 2023.
  10. 1 2 3 Edgar, Carol (April 1, 1979). "The Hot Pink Empire of Mary Kay Ash". Texas Monthly. Retrieved August 25, 2023.
  11. Ballard, Moriah (March 5, 2024). "Women's History Month: Founder of Mary Kay Cosmetics was a Houston native whose legacy continues to empower others 💄". KPRC. Retrieved March 12, 2024.
  12. "Mary Kay Ash". 20th Century American Leaders Database. Harvard Business School. Archived from the original on January 7, 2013. Retrieved October 20, 2010.
  13. Camerius, James W.; Clinton, James W. (1993). "Avon Products, Inc: Developing a Global Perspective" (PDF). Washington, DC: Direct Selling Education Foundation. Archived from the original (PDF) on October 5, 2010. Retrieved October 20, 2010.
  14. "Company Retrospective". Mary Kay (UK). Archived from the original on December 26, 2007. Retrieved October 20, 2010.
  15. 1 2 Maynard, Mark (January 19, 2019). "50th anniversary of the Mary Kay pink Cadillac". San Diego Union-Tribune. Retrieved October 26, 2023.
  16. Hall, James (March 6, 2020). "Mary Kay blames 'market conditions' for closing Australian operation". new.com/au.
  17. Macdonald, Megan; Higgins, Kate (March 6, 2020). "MLM make-up brand Mary Kay announces exit from Australia and NZ, citing 'market conditions'". ABC News. Retrieved August 26, 2022.
  18. "Mary Kay CEO to step down, hand reins to grandson of Mary Kay Ash". Dallas News. November 1, 2022. Retrieved July 6, 2023.
  19. Seal, Mark (August 1, 1985). "The Pink People". Texas Monthly. Retrieved September 30, 2023.
  20. Olen, Helaine. "Mary Kay Preys on Women". Forbes. Retrieved November 16, 2023.
  21. Hollandsworth, Skip (November 1, 1995). "Hostile Makeover". Texas Monthly. Retrieved October 11, 2023.
  22. 1 2 Hicken, Melanie (January 10, 2013). "The money behind Herbalife, Mary Kay and others". CNN Money. Archived from the original on September 24, 2019. Retrieved April 12, 2014.
  23. Hoopfer, Evan (November 5, 2018). "Take a look inside Mary Kay's new $100M DFW facility". bizjournals.com. Archived from the original on May 9, 2022. Retrieved December 6, 2021.
  24. "Hangzhou Mary Kay Cosmetics Co in Beauty and Personal Care (China)". www.marketresearch.com. Archived from the original on October 1, 2021. Retrieved October 1, 2021.
  25. Maynard, Mark (January 19, 2019). "50th anniversary of the Mary Kay pink Cadillac". San Diego Union-Tribune. Retrieved March 16, 2023.
  26. Clanton, Brett (June 27, 2006). "Mary Kay Inc. Loves Cadillac, and the Feeling Is Mutual". The Ledger. Archived from the original on March 28, 2019. Retrieved May 21, 2014.
  27. "Mary Kay Sales Director Earnings: Less Than Minimum Wage". Pink Truth. November 13, 2015. Retrieved April 5, 2018.
  28. Lopez, Jonathan (August 14, 2021). "Here's How Much It Costs To Get A Free Mary Kay Cadillac". GM Authority. Archived from the original on August 15, 2021. Retrieved June 2, 2022.
  29. Brochure: Mary Kay Career Car Plan Guidelines — February 2005.
  30. "Ford Mustang revs up as Mary Kay's newest ride". www.leftlanenews.com. Archived from the original on March 13, 2012. Retrieved April 5, 2018.
  31. Woodyard, Chris. "BMWs joins pink Cadillacs in Mary Kay's fleet". USA TODAY. Retrieved March 16, 2023.
  32. Mary Kay Letter to the FTC regarding proposed changes in the rules governing MLMs. Archived July 3, 2007, at the Wayback Machine
  33. Mary Kay Canadian Earnings Archived 2007-09-29 at the Wayback Machine
  34. "Barbie pink gets Mary Kay competition as nearly 20,000 descend on Dallas". Dallas News. July 24, 2023. Retrieved September 6, 2023.
  35. 1 2 "Mary Kay backs skin health research with $20k grant". www.cosmeticsbusiness.com. Retrieved November 16, 2023.
  36. Order List:544 US
  37. "FindLaw's Court of Appeals of Texas case and opinions". Findlaw. Archived from the original on October 1, 2021. Retrieved October 1, 2021.
  38. Mary Kay Inc. v. Amy L. Weber, Scott J. Weber and Touch of Pink Cosmetics, 601F Supp. 2d839 ( N.D. Tex February 20, 2009).
  39. 1 2 "Mary Kay Suing Another Product Liquidator". Pink Truth. July 23, 2009. Retrieved April 11, 2018.