Mary Kay Is Like Corporate America
We often hear Mary Kay (and other MLMs) compared to normal corporations. This is how they rationalize the pyramid. Those who compare MK to corporate America want you to see the realistic and understandable scenarios of corporate structure and how Mary Kay mirrors the same structure.
In many organizations, there are only a few at the top who make the majority of the money. Think CEO, CFO, President, Vice President, heads of departments. Like Mary Kay, thousands of workers make minimum wage while these leaders earn the big dough.
The lesson here is that if you work hard, if luck would have it, if the stars align, you might work yourself up to Dept. Head, and someday be a Vice president. Likewise, Mary Kay tells you the same thing. Work hard, and you will make that climb, but even better for you is, the TOP positions are not already filled! You can be a NEW CEO of your own company!
The theory is true for sports figures as well. Thousands upon thousands of kids all over America try out for, and play, various sports. How few make it to regional championships..and how few make it to the professional sports leagues? A very few at the top get paid the biggest bucks while the majority of those in the league make much less, and still the majority who play do not make it into a league at all. This is the nature of things. The best rise to the top and get paid the biggest bucks and that is just the plain reality of business in America. That is Mary Kay’s reality as well, they say. You just are having trouble accepting that MK is a corporate structure that rewards the best with the most money, and the best will always be a small percentage.
This argument is given to make you come to your senses, you Anti-MK zealots!
Except, there is just this one small problem.
Does corporate America require employees to buy and stockpile the product that pays the commissions to their CEO? Does the salary of that NBA player depend on all the team members charging refreshment stand product or game tickets to their credit cards? Since when do regular corporations require their employees to turn over their paychecks in order to have their JOB next month?
The money to operate regular company comes the usual way: through good and services purchased by consumers. A regular company that required its sales force to purchase the goods and services themselves so they can get a commission and remain with the company would be a huge red flag!
Mary Kay’s analogy that it is like all other corporations overlooks one very important thing. The majority of their income is on the shelves and credit cards of their independent sales force. How many Honda employees had to charge the months production at the Honda plant to keep their job? How many NBA stars got their paycheck collecting from the players in the locker room?
This is the fraud of MARY KAY and will always be the reason why they will never be a legitimate business. They do not care about, nor to they track, nor do they post, nor do they promote actual retail sales… paying commission on actual retail sales. The figure would be so low, the company would be humiliated and the sales force would pack up and quit. Not even consultants buying for their own use would order $6,000 retail in a year.
So the next time you hear the analogy that “Mary Kay is like all other companies, they all operate like a pyramid…” ask your Mary Kay defender if all other companies base their employee paychecks on how much of the company’s product the worker has on his credit card.
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A conventional company takes on risk with every employee they hire. They are beholden to pay that employee both directly (salary) and indirectly (benefits, overhead) for as long as that person remains employed. An MLM like Mary Kay risks nothing to bring in another rep. Even the $30 “starter kit” is income for Mary Kay; it’s a few button-pushes at Corporate to give the starry-eyed victim access to a few online tools and a website. (The MK brochure shows a tablet and a mobile phone. Yeah, hardware not included.)
MLM hawkers love to say “everything is a pyramid!” and point to government, military, and corporate org charts to make their pretend point. But none of those entities demand entry fees plus ongoing periodic payments to members of the “pyramid.” There may be some out-of-pocket, but the net money flow will be from outside the pyramid toward the employees. In MLM, it’s the other way around for the vast majority of the “sales force.”
MLM apologists will shout down critical points with false equivalences like “You have to work to get ahead in any job!” But MLM isn’t “any job”; it’s a scam that stacks the deck against all but a lucky few players.
I know several people who have been working from home for their corporate jobs over the past two years. They were given cellphones and laptops, help with upgrading their Wi-Fi or paying for their internet access. This was simply to ensure that the staff member was able to work to the same standard as in their office spaces.
I’ve also seen this version of the corp. comparison by a MK consultant: Small stores order inventory wholesale from corporations, and we do the same. (That post is on PT somewhere)
The difference is, real stores only make money from retailing their inventory to non-affiliated bonafide customers, not from recruiting their customers as competitors. (And no, it’s not like a franchise, lurkers.)
I own a franchise business and it is most assuredly nothing like pyramid schemes, MLMs, direct sales etc.
Oh and it’s way more profitable than MK ever was. It wasn’t about not working my business hard enough.
Would I be correct, Colleen, in assuming your franchise agreement includes a protected territory, where you are not encouraged to recruit your own competition? Because that would be another difference between a real franchise business relationship and any MLM.
It astounds me that Mary Kay and (pretty much all) other MLMs tout “No territories!” as if that were a good thing, instead of a profound negative. It’s just one of the many examples of the upside-down, backwards thinking of MLMs everywhere.
Corporate America also has hiring and termination practices to ensure they have the best staff from bottom to top to achieve the goals and mission of the organization. Unfortunately, there are those situations in corporate America when a person is unable to achieve the goals and expectations of their role and inevitably get let go. Tell me about one person, JUST ONE person who was a struggling consultant not experiencing success that was told by their recruiter/director, etc… “maybe this opportunity isn’t for you.” Or, “perhaps your skillset is better suited for xxxxxxx.” NO, you will be strung along with every reason to “keep going!!!!!!!!!”, “I BEElieve in you!!!!!!!!”, “take Jesus as your business partner!!!!!!!!!!” And, what’s behind all those U Rah Rah’s is a hope for just one more order before you walk. What corporate organization would encourage an underperformer to stay or even fight with excitement and encouragement to not let that person move on?
“Corporate American” companies will only hire, even at entry level, a finite number of employees based on their needs and how many they can afford to hire.
Conversely, MK will “let” ANYONE AND EVERYONE sign up to be an IBC. How can they do that? Well, they have little to no cost invested per every IBC. Every IBC pays whatever cost to join, and continues to pay for EVERYTHING they want or need to run their “MK business”. MKC does NOT lose money on any new IBC, and might actually MAKE some money on every IBC.
“How many they can afford to hire” is important. Corporate America PAYS to hire and train their staff. Mary Kay CORPORATE also does the same…for their CORPORATE employees. This explains why thousands of people can’t just decide they’re going to work for MKC and just fill out an application and POOF become MK Corp employees.
But…if thousands of people want to become Independent Contractors for MK as IBCs…well heck yeah! (A la Oprah): YOU can be an IBC, YOU can be an IBC…EVERYONE can be an IBC!!!
Got a face? Cool, we’ll take you. Breathing? Sure, we’ll take you.
Corporate America does not do this. And it’s not because they’re denying the “opportunity” to tons of ladies everywhere.
All such great info on corporations that I am compelled to ask for clarification – in case there are lurkers. I have to assume this was a typo, or did I miss the sarcasm? “MKC does NOT lose money on any new IBC, and might actually MAKE some money on every IBC.”
MKC “might” make some money? It’s how they make all their money as a direct selling corporation…….selling directly to their customers they cleverly label as IBCs.
I remember how horrified I was to find out that Directors did not have any benefits like my company offered. You had to reach National Sales Director to have access to retirement funding, and other benefits. Then I saw how much time it took to achieve even a modicum of success and how you were charged for everything. None of the training was free and the pink life that was painted to be so freeing and fun instead looked incredibly stressful – like running on a treadmill and not getting anywhere. I’m so glad that I never got far and got out of the pink fog, thanks to Pink Truth. Now I can work my 40 hours and leave it when I go home and I can be confident about the future with sick pay, vacation, healthcare and 401k. And bonuses!