I could go point by point over each statement on Pink Truth and clear up any misconceptions around them. That is not my main purpose. This is a response vehicle for me because some women who are considering Mary Kay may be impacted by the inaccuracies that are stated on certain sites like "Pink Truth" and that is just plain unfair to them and to their future. This is not a place where I want to spend a lot of my time and energy.
I will respond to some core points. If there are other points you want me to address here, feel free to contact me. However, the bottom line is that 95% of your emotions are determined by how you interpret events to yourself. Your belief about something comes first - then you will seek out supporting evidence regarding that belief.
The belief "Pink Truth" has, as stated on their site, is: "Pink Truth does not offer what some may call a “balanced” view of Mary Kay. Why? Because there are few redeeming qualities in a company that abuses hundreds of thousands of women a year. Companies like Mary Kay are abusive systems that create negative consequences for the vast majority of participants." Because that is their belief, any benign event, a Director smiling and giving her consultant a compliment for example, is going to be interpreted as an "evil manipulation" regardless of what I say.
However, if your belief is that people that are highly successful (in any arena not necessarily just in Mary Kay) don't have hours to spend on any social networking site and are probably out doing better things with their time and energy, you may view the comments on "Pink Truth" with a huge grain of salt (if you are even spending any time on there to begin with). Mary Kay is either for you or it's not, and you move on if it is not. And, oftentimes, the only way to really know that for yourself is to try it for yourself. So, if your overall belief is that there is no "hidden conspiracy to drink the pink kool-aid" and Mary Kay Cosmetics, Inc. is a legitimate company that offers an opportunity that may or may not be for you, then you will gain insight from these responses to the core points that all their other "truths" hinge on.
Statement: You don't need inventory
First of all, it depends. My sister places a $200 wholesale order once a year to stock up on her own products at 50%. If she needs a few things in between, she buys them from me at full price. For her, it is a better deal than Costco and she is happy with her Mary Kay experience. She's been doing it for years and is not at all disgruntled. She doesn't need an inventory - then again, no one thinks of her as a consultant either. Some take it to another level, they might place small size orders several times a year because they are ordering it for family and friends at 50% off and, when they are getting ready to place an order, they collect money from friends and family to do so. They are still mainly in Mary Kay to get their stuff at cost and they also don't necessarily need an inventory. However, they won't be getting ALL the sales from their friends and family because, if they are regularly using the product, they are probably buying it from a consultant who has the product in stock regularly and just order what is needed from their family member or friend to "help her out" when the time comes. Here is an actual email sent to one of my Director friends and I have had similar personal experiences.
"I want you to know that I appreciate that you ALWAYS have the products on hand when I order them! I have tried over the years to buy from someone local - a couple of new consultants. I wanted to help them out and thought - it would be easier to get my Mary Kay from someone local. But time after time I would call and order 2 or 3 things and invariably they would say - "Oh, I don't have that - it will take me a few days/weeks to get it. Or, I'll have to order that - or see if I can get it from someone else." I just got tired of waiting on my stuff - when I am OUT - I need it and I need it NOW! That is why I always go back to you to get it - even though you have to ship it to me - you can get it faster to me than these local consultants. I wish they knew they were losing good customers by not keeping products on hand to buy!" Well - my girlfriend explained to her that not every consultant treats their Mary Kay like a business and not every Consultant chooses to purchase inventory and invest in their business. (It is a choice) She said, "I don't know of any business you could get into without investing some money??"
For those who assert that we are "tricking" people into thinking they need an inventory, I want you to take another little imaginary trip with me again. I want all women reading this to stop for a moment. Think of all the skin care and cosmetics that you personally use right now. What is in your bathroom cabinet, what is in your purse, etc. Now, let me ask you this. What percentage of the skin care and cosmetics purchases that you personally own, were made by you taking that product home with you from the "store" at the moment you paid your money? What percentage of your own personal products were "ordered" from the store and delivered to you later? What percentage of body care or fragrance gifts you bought for others were made as a result of picking the gift set off of the "shelf" versus ordering it to be delivered? Here is the honest truth of what I have seen: consultants who struggle to place a $200 order every 6 months are not even personally using all the product themselves. They are still getting many of their cosmetics, skin care, and gift sets from the store because even THEY don't want to wait for it!
If you are pushing a buggy through Wal-mart and they don't have what you need - what do YOU do? Leave and get it from somewhere else! If you are in JC Penney's and they don't have the item you need and say to you.. "We can order it and it will be in within a week or two" what do you do? We usually say - "that's ok" and look for it somewhere else." I think you'll agree that most of us would respond exactly the same way which is why inventory is important and is a huge ADVANTAGE we have over a company that does not offer it as an option to their "distributors". We can have all the benefits of a true retail environment and the customer loyalty and higher sales that go along with it. So, is it mandatory - NO. Is it in her and her future customers best interest? YES
TIP: Consultants do not give potential recruits the impression that they can have a successful, income-producing, business by being an order-taker and delivery person. Mary Kay was the first one to say "You can't sell from an empty wagon." It is not necessary to START with an inventory. Mary Kay wanted to provide this opportunity to everyone with a work ethic regardless of their financial means. However, it is unrealistic that she can build a large base of loyal, satisfied customers without EVER operating with the products that they want on hand. Someone who is not in a position to invest can sell her way to the inventory suitable for her if she realizes the value of it without investing any of her own money (that wouldn't be Plan A because she will experience more frustrations but it is an option). And, if her only goal is to get her stuff at cost and have some fun, she may not need very much. But if you gave her the impression that she could quit her job and make a significant income by just getting $100 kit, then that creates distrust when her Sales Director talks to her about what is necessary to reach her goals - especially if they are big goals. The Director is GOING to advise that she gets inventory if she wants to treat Mary Kay as a BUSINESS. This is where the myth of the BIG BAD DIRECTOR can stem from! Let her know that the $100 gets her her Starter Kit and then she can then order product from the company if she wishes. Let her know her Director will give her suggestions based on her goals but she is the ultimate decision maker.
TIP: Directors, suggest different size inventories for different goals so she is with you long-term. Too little inventory and she is likely to get frustrated and discouraged which leads to inactivity. Too much inventory (if she stated that her goal is a hobby instead of a business and she has no intentions of taking advantage of educational opportunities) would perpetuate the misconceptions on Pink Truth.
Statement: My Director is pushing me into the largest inventory possible because she makes more money.
This is not logical. A Director has no incentive to have the consultant invest in more than what her goals indicate. The bottom line is, if the consultant isn't selling product, she won't be ordering again. AND if a consultant is not selling product and she has too much on her shelves, she will most likely send the product back to the company for repurchase. In that instance, any commissions paid are charged back to the Director, and the company destroys the product for quality control purposes even though it has never been opened AND gives the consultant 90% reimbursement on the product costs so they are taking a big loss as well. Plus the consultant can no longer become a Mary Kay consultant in the future (because the company takes such a huge loss they are only willing to do it once). This is a lose/lose scenario and there is no way the company could be in business, or a Director could make any money, if this was the goal of anyone. The motivation of both the company AND the Director, is that the consultant is selling the product. Only then, will she continue to order. The argument of "Just recruit people with large inventories and it doesn't matter if they sell it" just doesn't hold water. If they don't learn to sell they are either going to never order again and/or send their product back. When I look at my production over all the years as a Sales Director (and I've done over $300,000 unit production all 10 years as a Director with the highest being $650,000), the MAJORITY of that production is generated from the consultants in the unit who were repeatedly selling and ordering. Those who placed inventories and never sold them are not where the production is coming from - and any returned inventories were deducted from those production numbers so she is not "making more money" off that large inventory that was never sold. If the research showed that a consultant who ordered $200 initially had as many repeat sales as a consultant with an $1,800 inventory, it would make no difference to the Director if she ordered it all at once or over the course of 6 months. As long as the consultant is selling product, she is ordering product from the company, and commissions are paid. If she is not selling product, she won't be ordering more from the company, may even return unsold product, and commissions won't be paid and/or charged back. It is in the CONSULTANT's best interest to have suitable inventory (see the previous response).
Statement: The company sales data isn't accurate because it only reflects sales to consultants, not to customers. Product isn't really being sold.
I have to admit that I have quite a bit of enjoyment from answering this one because it REALLY shows the lack of knowledge behind the "facts" on Pink Truth.. The sales data of ANY cosmetic company is taken from the wholesale sale of that company, to it's distributors. For example, the sales from Lancome, Clinique, etc. are taken from what the department stores (Macy's, etc.) are buying from them. They aren't looking at the actual sales transactions that a customer makes with the department store! It is assumed industry-wide, that the department store is purchasing the product because they are selling the product. Mary Kay reports it's data exactly the same way as all other cosmetic companies. If they weren't, our cosmetic competitors would have been shouting it from the roof tops long ago! To say that Mary Kay products are not being sold to consumers but only to consultants is as inaccurate as saying Clinique isn't being sold to customers because only Macy's (or other department stores) are buying it. ALL cosmetic manufactures rely on their distributors stores staying open and on the success of their sales to consumers. If Lancome only sold initial stock to new department stores (who obviously see the benefit of making that initial investment to have it on hand instead of ordering it as people ask for it) and then almost all of the stores failed to sell the cosmetics, Lancome would go out of business. Just those initial inventory sales would not be enough. Mary Kay cosmetics is no different. The consultants are the department stores (the distributors) and the company's success hinges on the consultants selling product to consumers.
Some recent "examples" used by those complaining that prizes & awards are given on WHOLESALE orders vs. retail have said: "That's like rewarding Starbucks for restocking cups" or "rewardng Walmart for restocking Charmin". Although they are meaning to prove a negative point - it actually does the opposite. My response: Yes, they should be rewarded because the fact that they have to restock it means people have been buying it off the shelves!
Statement: The company is a "pyramid scheme" or "Multi-level".
The company is sensitive to the fact that any Direct Sales Company can be lumped together to those who don't know the differences and it sends out full legal documents explaining why it isn't. Pyramid schemes are illegal and the government gets involved and shuts them down. Multi-level sales are perfectly legal, we just don't happen to be that type of company. In a multi-level situation, the recruiter gets a piece of each recruit's commission (or forces the recruit to buy products from her at a marked-up price), thus making it necessary for the recruit to bring in recruits of her own just to stay afloat. In Mary Kay, there are no levels of distributors that the product passes through. Everyone purchases directly from the company and receives the same 50% discount on the cost of cosmetics; the recruiting bonus does not come out of the recruit's earnings, but is paid directly from the home office.
Although similar to other legitimate companies who are members of the Direct Selling Association (www.dsa.org) Mary Kay created the structure of her company with unique features that she felt would allow her consultants to outperform distributors from other companies. Her original structure was designed to help the independent contractor make the most of the market opportunities.
I wanted to show the key elements of the structure that Mary Kay originally created which she felt were in the best interests of the customer and, as a result, in the best interests of the consultants.
This shows her intentions. They were:
(1) Limiting the product line so that the salesperson could be thoroughly knowledgeable about each item and so that on-the-spot deliveries could be made at the time of the sale. (still in effect)
(2) Putting the emphasis at the sales parties on teaching rather than selling. Mary Kay believed that not only would the teaching make the claims for the products more credible, but it would make the experience more enjoyable for both customer and salesperson. (now deemed an option)
(3) Restricting the number of people at a party. Mary Kay had learned through experience that women who actually participated in a demonstration were more likely to buy. But since a beauty consultant could not give personalized attention to more than six women at a given party, that was the maximum number allowed. (now deemed an option)
(4) Insisting on delivery on the spot. By having the beauty consultant deliver the orders at the time they were placed, the company and consultant takes full advantage of impulse buying. Furthermore, by having the beauty consultant collect payment on the spot, the hostess was relieved of the burden of trying to later collect from the guests and deliver product. (now deemed an option)
(5) Not allowing the beauty consultant to buy on credit. This policy eliminated the cost of policing a credit system and protected the consultant from getting herself too deeply in debt. Mary Kay felt that other firms unnecessarily created bad feelings between the company and sales force because of credit problems. (credit is still not provided by the company for this reason but consultants of course can - responsibly or irresponsibly - do this with a credit card company on her own)
(6) Not limiting sales territories. Mary Kay believed that more beauty consultants would be recruited if any consultant could recruit anywhere in the country (or outside of it). As she explained the system in 1978, "We have what we call the adoptive system. It works like this: say you recruit a consultant while you're on vacation in Hawaii. You leave her with a director of consultants in Hawaii who trains her. Meanwhile, you draw a small percentage of your recruit's sales. But the company pays that commission, not the recruit. The Hawaiian director does not get any percentage, but the Hawaiian director will have a recruit somewhere else, under some other director and it balances out. Most of our directors have adoptees. Now this system is almost unexplainable to men, I've found. But it works. Everyone helps everyone else". (No limit of territories is still in effect but the adoptee program is becoming shaky among Sales Director who did not "grow up" with a strong tie to our culture)
(7) Offering superior compensation. "She set the gross profit margins for salespeople at 50% to help attract career-oriented women". (still in effect)
(8) Sweetening compensation with an array of performance bonuses. Sustained high levels of performance were, of course, rewarded by promotions to positions of sales director or national sales director. But short run effort was further encouraged by a generous array of cash bonuses and such in-kind awards as the use of a pink Cadillac. (still in effect)
TIP: When Mary Kay was alive, she used her wisdom and TOLD us what we should do to follow in her footsteps and grow our business - as a mother would tell her daughter. With the growth of the company and with Mary Kay's passing, the litigious nature of some individuals required the company to develop a legal department to ensure the safety of our opportunity and make sure we can support, with research, all claims that we make. Part of that process was to eliminate any "restrictions" or "limitations" on how the sales force conducted their individual businesses so there wouldn't be the suggestion that a consultant is an employee - and thus lose the benefits of her Independent Contractor Status. Some individuals wanted the freedom, flexibility, and unlimited income that being an independent contractor provided, yet wanted the company to provide the "security" or "guarantee" of an employer. The consequence of them making legal demands on the company towards that end was for the company to defend our opportunity to be independent by clearing away a lot of Mary Kay's original wisdom to make things "optional' and or "suggestions". I believe this is partly responsible for the rise of "bad apples" who elect to run their business any way they want (versus the way Mary Kay would have wanted). When those actions are unethical, it causes people to make generalizations or accusations towards the whole sales force and/or the company.