Truth About Mary Kay Lies
Written by Sad In Pink
Many who read Pink Truth are lurkers or naysayers. They believe that MLMs really do work and that most of the people writing and commenting here are losers or whiners who just didn’t work hard enough.
Maybe the naysayers just don’t understand that those of us gathered here are trying to share our experiences to represent the other side of multi-level marketing.
Many who have come here have experienced serious debt and broken dreams. I am one of those who woke up to find that I had wasted a good deal of time trying to build an organization that would always have to be rebuilt over and over again. I speak not only from my experience in three different MLM’s but also as an older woman who has worked in many different opportunities throughout my life. There is no comparison between the money you can make in an MLM and the money which can be earned by a solid job.
In fact, my husband told me that if I had worked as hard in a job as I had in my Mary Kay Career, I would have earned a lot of money without all the expenses, “the suit”, the car co-pay, the seminars and meetings etc. He was right!
I am not an angry person, nor do I hate Mary Kay, but I do believe that the system on which it runs will only benefit the top 1% of the pyramid. Those who got in early will ride the tide to great wealth at the expense of those who are working at the lowest levels… or at least using their credit cards to support them with orders. Robert Fitzpatrick, an author who wrote “False Profits” says that around 99% of those who enter an MLM will not succeed. That is a pretty sorry record.
Another author who has written a great summary of her personal MLM experience (not MK) is Athena Dean. She wrote a book more than 20 years ago that is just as relevant today as it was then. In All that Glitters is not God she wrote: “In order to make it big in MLM you must eat it, sleep it, live it, breathe it. Building your business must consume you, your life and your thoughts. You must give it your whole heart, mind, soul and strength. After all, you’ve been told you’re a winner. Only losers do less, and they fail.”
When I saw myself starting to devote all my waking hours to Mary Kay, I knew it was either continue to pursue this endless recruit/sell/recruit cycle or enjoy my family once again. I could not do both and do them well.
Here are some of the lies perpetuated by MLM companies:
1. You can make a six figure income.
TRUTH: You have to be willing to sell your soul and try to buy the hearts of all your friends in the process. Remember,only a fraction of 1% ever make a six figure income.
2. MLM is without risk. In MK, we are told that the company will buy back your inventory at 90% of your cost.
TRUTH: The company finds many ways to reduce the amount you get back by taking out the cost of awards, prizes, car expenses (if unpaid), chargebacks if any of your team members leave before they mail your check. They don’t refund any of your out-of-pocket costs for training, supplies, postage, gas, etc. and those add up fast. Plus, you face debt if you came in with a big inventory and cannot move it. I personally have several friends who moved up to directorship and are now in DEEP debt. They were not lazy and they made every effort to move up. But it does not work!
3. It is so easy to sell this product!
TRUTH: The real target for purchasing the products is the consultant and her family members and friends. What happens after you sign on the dotted line is this: There is a switch to the idea that the MLM doesn’t so much want you to sell the products as sell the idea of getting other people in to sell the products. In other words, RECRUITING is the only way to move up.
4. You will have more time for family and your faith.
TRUTH: If you really want to earn anything, you have to work a party plan which most often is in the evenings taking you away from the home at night. Plus, you become so busy running from one event, party or meeting to another….you have little time for anything.
I want to again refer to Athena Dean’s book. She wrote; “The MLM false doctrine in its very nature is based on the hopes and failures of those on the bottom of the line. Success for any MLM is based on recruiting – the selling of family and friends for profit. If too many succeed, the MLM structure collapses or they change the compensation plan to make it harder to earn income on your downline.”
Do you see what she is saying here? Eventually, any MLM saturates a population and has to move into other markets to sustain sales. (Did you ever wonder why Mary Kay made such a big push in China and other foreign countries?)
If you will just do a little math you will discover that the idea of recruiting just five of your friends and asking them to do the same leads quickly to complete saturation. It takes an enormous amount of recruiting to move up in MLM. However, you may be saying that you will just sell the product. But it is very difficult to turn a profit from just selling the products. That’s partly because it’s so hard to actually sell the products and partly because of all the expenses. While I did not go into debt during my stay in MK, I did not make money as a hard working director. Every year, I showed losses. There were many hidden expenses built into any MLM business.
I ask myself what people are missing about MLM. How can they read a site like Pink Truth and not “get it”?
I quit Mary Kay long ago. While I have left MLM behind, I want others to see what a waste of time this type of enterprise really is. I gave up a number of years of my life that I cannot get back all for chasing a dream that could not be reached. Presently, I have a wonderful job and evenings to enjoy my family.
If you’re involved with Mary Kay or another MLM, I challenge you to really take a look at what you are doing with your life. There are many ways to legitimately earn a living that are far less demanding on your pocketbook, time or family. So lurkers and naysayers… just know that some of us share our stories and information because we do care that others don’t fall into the traps we have stumbled into.
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“The real target for purchasing the products is the consultant and her family members and friends.”
Well stated Sad in Pink. Addtionally, to succeed in MLM you must participate, willingly or unwittingly, in the exploitation of your own downline. Your profits, if any, are created directly from losses in your own downline. This is the reality of MLM, and there is simply no way around it.
Check this out!!
Holy you know what! IRS examines former MK consultant taxes and it goes wrong my English so bad someone please tell me what happened
https://www.taxnotes.com/research/federal/court-documents/court-opinions-and-orders/tax-court-finds-individuals-mary-kay-activity-wasnt-for-profit/289dx
Wow, this needs to be a front-page post in its own right!
Basically, she tried to write of $48,000 of expenses, including volleyball tournaments for her daughter and Disney trips, in a year when she sold less than $2K in product and ordered nearly that much.
Front page indeed! Great find, Shay!
Hi Shay, here is a summary of that case:
The MK rep filed a sched C for alleged business losses for the past 3 years associated with her Mary Kay business. The IRS determined that she was not running a legit business, for the purposes of turning a profit, based on standard IRS criteria. In summary, the IRS uses 9 factors to evaluate whether such activity is actually proper business activity. Her MK activity failed to satisfy on all 9 factors.
Basically, the IRS said if she was serious about this business, she would have kept accurate records (ledger etc.) and would have changed course as losses mounted to minimize loss and move toward profitability. She did none of these things, indicating she was not serious about running a profitable business.
She also tried to write off personal travel expenses as business travel expenses when the primary purpose of those travels was: Child’s sports activities, family vacations, reunions with college friends. The IRS determined she would have spent that money on that travel whether or not she was running this MK “business.” They suggested she was simply trying to create a tax shelter.
Not only does she have to pay the tax she failed to pay, she also has to pay penalties for underpayment of taxes.
My guess is someone in her upline suggested she try writing off all of this as business expenses. This is very popular to do in Amway. You can get away with this if you run it properly as a business, and have a CPA help you set it up correctly. But it is shady, as many MLMers who do this appear to abuse the tax code to increase their non-taxable income without actually producing any true business profit from the MLM business. In other words, the financial benefit of their MLM involvement is limited to reducing their tax liability. None of their increase in “net” income comes directly from MLM profitability.
I wonder if the upline told her “When you travel, all you have to do is ask one person you see their opinion about Mary Kay and then you can write the whole thing off as a business trip!” (This was actual tax advice directors/NSDs would give.) I’m not surprised the IRS doesn’t see it that way.
Thanks Data. I was so fricking excited to find that and I’m trying to read it but talking Spanish to myself by reading it LOL
I know it’s older but it still applies.
I kept businsss records for our little Etsy store. Well, actually Etsy helped too but this is why MK bots need to stop giving financial advice out. Thanks again Data
This is my thought exactly. Why has a professional tax accountant when you can just take an MK huns word for it!
Data and whomever else might want to chime in 😊
My friend said this is surprising because she said IRS usually don’t go after small fish like this and this lady must have done really stupid sh*t on her taxes that we can’t see. She also found it interesting they found out about the work trip and probaly asked questions like I am quoting her text
“So this was a business trip? Tell us who in MK set it up. Give us names.”
Now I have a question for you I know restaurants take a few years to make a profit sometime maybe 5 years when you consider loans etc.
now the IRS usually gives single member LLC members like a year or two until it’s proven not a legit business and a hobby, correct ? I know that this case is a lot different and actually happens more often than everyone thinks but don’t like bigger corporations like say like if Applebee’s was opening one up and they didn’t make a profit for like the first five years I mean obviously the IRS wouldn’t tell them they were a hobby right?
The problem was nine-fold. The most obvious to the IRS was her lack of professionalism. She did not operate her “business” at all like a proper business. If she had kept meticulous records and hired a CPA to help her with her taxes, this may have gone a different direction. And if she showed overt attempts to constrain losses, they might have been fooled. But she just kept happily and significantly out-spending her revenues, which no rational business owner would do.
Then again, anyone in MLM who keeps meticulous records discovers very quickly they are losing money with no end in sight. They then have few choices:
– Quit
– Move to full-time recruiting to build and exploit a down-line
– Try to game the IRS
She chose the last option.
Maybe I just answered my own question there lol?
Great find Shay!!!
Back in the 90’s we were told filing a loss more than 3 years in a row was going to get IRS attention…
It’s really the difference between the liars and truth tellers. That’s all there is to it. None of these liars have proof of viable income income over any length of time. I laugh to think, they think, they are credible in any way.