NSD False Earnings Claims
A couple of years ago, I posted an article about the false earnings claims being made by Mary Kay NSD Dacia Weigandt. I had a problem with her statement that the average part-time consultant makes $5,000 to $10,000 per year. We know darn well that 99% of people who participate in MLM lose money.
What does Dacia say today? The claims are even worse. Here is a piece that was created by NSD Auri Hatheway, and is posted on Dacia’s website.
Let’s zoom in on the money part of it:
Now the claim is that the average part-time consultant makes $5,000 to $25,000 per year. What nonsense. Show me these “average” consultants. Because there are tons and tons who lose money. In order for there to be an “average” at $25,000, you’d have to have a whole lot of consultants making $50,000 a year doing part time work. You guess it, this claim is completely fabricated.
Don’t even get me started on the sales projections for 1 year. She says 5 shows per week take 15-20 hours. Nonsense. She also says those 5 shows (good luck getting that many to actually happen, by the way) would result in $1,000 in weekly sales plus another $85,000 per in reorders per year after you’ve gathered customers for a year. I challenge Dacia and Mary Kay to show me ANY consultant who actually achieves these numbers. How many have there been in the history of the company????
It is curious to me that Mary Kay Inc. allows these falsehoods to be publicized over and over. Surely they know these things are going on? The FTC cracked down on AdvoCare for false earnings claims (in addition to being a pyramid scheme). I wonder when it’s going to be Mary Kay’s turn to answer for the false earnings claims that have been made for decades?
Visit the
Time to start reporting all Mary Kay consultants to Facebook. Thanks MLM Radar for this post yesterday:
21. Facebook Multilevel Marketing Policy
Ads promoting income opportunities must fully describe the associated product or business model, and must not promote business models offering quick compensation for little investment, including multilevel marketing opportunities.
23. Misleading Claims
Ads must not contain deceptive, false, or misleading claims like those relating to the effectiveness or characteristics of a product or service or claims setting unrealistic expectations for users such as misleading health, employment or weight-loss claims.
27. Unacceptable Business Practices
Ads must not promote products, services, schemes or offers using deceptive or misleading practices, including those meant to scam people out of money or personal information.
Tracy’s article only proves they should be reported. I put “Mary Kay consultant” in Facebook search and a ton came up. Volunteer your time, report them, and make a difference. Save people from these scamming liars. Note: Some people don’t realize they are scamming liars. They are the willing-victims. Think of it as tough love and help them “out”.
Heck, report those claims to the FTC. If enough do, maybe they’ll finally take action, as they did against Advocare and Herbalife.
If anyone here knows someone who is making or firwarding similar earnings claims, send them this:
“If you decide to become a distributor, you are legally responsible for the claims you make about the company, its product and the business opportunities it offers. That applies even if you’re repeating claims you read in a company brochure or advertising flyer. The Federal Trade Commission advises you to verify the research behind any claims about a product’s performance before repeating those claims to a potential customer.
“In addition, if you solicit new distributors, you are responsible for the claims you make about a distributor’s earnings potential. Be sure to represent the opportunity honestly and avoid making unrealistic promises. If those promises fall through, remember that you could be held liable.”
Source: the FTC website, but also here:
http://www.pinktruth.com/2008/03/22/the-ftcs-warnings-on-pyramid-schemes/
*forwarding (darn this tiny phone keyboard and my ancient eyes)
You can’t honestly think the FTC isn’t fully aware of the bogus nature of the MLM industry? Any 5 year old with Google and a calculator could figure that out in 5 mins or less. The truth is, the FTC is told to let the MLM industry self-regulate by their political handlers, except in the worst of the worst cases. They have a 29-0 record against any MLMs they’ve investigated so far. The NRA has about 5 millions members and look how powerful their lobbyists are? MLM has 6.2M members and an even stronger lobbyist group. The only thing that will truly end MLM is to educate the public. Without victims, MLM is dead in the water.
We need our own lobbyist group (?) AND we need to educate the public, totally agree. The monster doesn’t survive without fresh blood.
You go, girlfriend!!!
?
A “full-time Director” would have to be producing $20K wholesale/month to gross $5,000, which, according to even the newest Applause is ridiculously uncommon. Besides, I thought we were all sold on “executive income in part-time hours”.
so a party is now a show or beauty experience. So desperate to make it look legitamite
I’m troubled by her misleading phrasing about the income claims. Notice that she uses the word “generate” rather than “make” or “earn.” Generate is a vague term. Maybe she’s using the word to mean “sell”. I highly doubt she means “profit.” Perhaps she means that the consultant purchased $2500 wholesale and could potentially sell $5000. Now, that seems the most reasonable definition of her meaning considering that this is one of the inventory packages.
Well, MKI calls ordering “production,” so there is precedent.
Ordering is “production” for Mary Kay Corporate, in the sense that what the Director does produces product sales for MK Corporate.
The fact that those sales are from MK Corporate to the consultants, or from MK Corporate to the Director herself, and NOT to end users, is not something that troubles MK.
MK simply does not care how much of its products wind up in the hands of people who will actually use them. As long as the products are offered for resale in a way that doesn’t reveal the market is over saturated (no sales on eBay allowed), or don’t get returned to the company, what happens to the products is unimportant.
Good catch, Pinkiu!
Also, she mentions “the average NSD is an official Mary Kay Millionare”. Those not in the Pink fog would rightly assume that means the NSD actually earned $1M. But, the reality is, if your entire unit sells $1M in a year, you’re a “Mary Kay Millionaire”. I can’t remember if that’s wholesale or retail. But, I think it must be retail because MK loves to inflate their numbers to sound more impressive.
In pinkspeak, “MK millionaire” means “love checks” cumulatively totalled one million dollars, which could just mean $50k/year for 20 years.
By that definition, most people over 40 are millionaires. Except that we aren’t.
Oh; Oops. Thanks for correcting my error.
When I was in there was a big push by my “new” director one year to do “Do A Million” in production, and she kept saying she wanted to be a “Million Dollar Director”. I guess I confused those terms, Million Dollar Director & MK Millionaire.
…Interestingly, it seemed like this aspiring Million Dollar Director had recently absorbed at least 4 failed units into her unit (4 women in the newsletter had professional head shots, while the rest of us had more amateur snap shots, and one of them was my former director who lost her unit). AND, it was the time of double-credit months, which she really promoted. So, even when I was in, the “Million Dollar” unit seemed really disingenuous.
‘if your entire unit sells $1M in a year, you’re a “Mary Kay Millionaire.'”
If the unit ORDERS $1M in a year.
No, actually it’s that they’ve earned a CUMULATIVE lifetime total of a million or more. It’s not terribly impressive if you consider someone in corporate America makes $100,000/year has earned that in just 10 years.
Ya. The word party or class are such a misnomer in 2019. For over 50 years women have endured these female gatherings because they think their helping other women. Time to call this company on its misuse of terms. Party means financial sales pitch, Class means do it yourself makeover. Dual marketing means mlm. Now the beauty experience still means do it yourself fake glamor. Show means recruiting scheme. As to the financial side of things using MK math that initial $100. soon morphs into thousands: actual products, gas, meeting costs, seminar costs, business cards, open house costs etc. So what they are promoting as earnings really dwindles quickly when adding it all up. All that effort (Phone calls, warm stalking, advertising etc. that mostly fails). Driving to a class that either cancels or where the women are so peeved, they buy very little. I know that in the end when I went to my final jewelry party for a friend of a friend I was quite annoyed. I did buy but very little. I was given a very cheap bracelet (Dollar store quality). The bracelet broke while I was driving. The cheap beads scattered everywhere making a huge mess. 🙁
again…
Why recruit a customer to create competition in an already saturated market, and AT BEST earn 36% when they buy inventory instead of 50% when they buy from directly you? That is why I never recruited. the math didn’t add up.
Yes. Permit me to point out the inherent flaw in MLM:
Why allow the consultant to charge me double price, when all I have to do is sign up to get 50% off, or buy on eBay?
The math didn’t work recruiting, but neither does retail re-selling. See above sentence.
The only way to make significant money in MLM is to lie to enough recruits about it’s legitimacy. As in, if you tell them you’re recruiting them into a pyramid scheme people wouldn’t join. Catch 22. People must present it as an ethical selling business to recruit – which it’s not.
Side note: If someone must have a MK product and doesn’t want to be PUC, tell your consultant that you’ll help her make “production” and buy from her at her 50% off price. She’s probably already re-selling at a discount; but just in case she isn’t and really ripping you off, tell her that or you’ll find a new consultant. Save yourself some money! Better yet, don’t support a pyramid scheme and buy a different brand with better quality at a cheaper price.
Really. This claim needs to be reported to the IRS. To ensure that the MLM claims, if true, are being adequately reported to the IRS as taxable income.