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For Mary Kaye guitarist and performer, see Mary Kaye. Mary Kaye (born January 9 1924 - died February 17, 2007), sometimes called the "First Lady of Rock and Roll " was a
Mary Kay Inc.
TypePrivate
FoundedDallas, Texas (1963)
HeadquartersAddison, Texas
Key peopleMary Kay Ash, Founder
Richard R. The term privately held company refers to ownership of a business company in two different ways first referring to ownership by non-governmental organizations and second Year 1963 ( MCMLXIII) was a Common year starting on Tuesday (link will display full calendar of the Gregorian calendar. Addison is a city in Dallas County, Texas ( USA) The population was 14166 at the 2000 census Mary Kay Ash ( May 12, 1918 &ndash Rogers, CEO
David Holl, COO
IndustryPersonal care products
ProductsSkin care, cosmetics, nail care, sun protection, perfume
Revenue$2 Billion
EmployeesIndependent sales force of 1. A chief executive officer ( CEO) or chief executive is typically the highest-ranking corporate officer ( executive) or administrator A chief operating officer or chief operations officer ( COO) is a Corporate officer responsible for managing the day-to-day activities of the Corporation For other uses of this term see Industry (disambiguation An industry (from Latin industrius, "diligent industrious" In Marketing, a product is anything that can be offered to a Market that might satisfy a want or need Perfume is a mixture of fragrant Essential oils and Aroma compounds Fixatives and Solvents used to give the human body animals objects and living In business revenue or revenues is Income that a company receives from its normal business activities usually from the sale of goods and services Employment is a Contract between two parties, one being the employer and the other being the employee. 6 million worldwide (2005)
WebsiteMary Kay Inc.

Mary Kay is a brand of skin care cosmetics and color cosmetics sold by Mary Kay Inc. A website (alternatively web site or Web site, a back-construction from the Proper noun World Wide Web) is a collection of Web pages Mary Kay World Headquarters is located in the Dallas suburb of Addison, Texas. Mary Kay Ash founded Mary Kay Inc. Mary Kay Ash ( May 12, 1918 &ndash on Friday, September 13, 1963. Events 509 BC - The Temple of Jupiter on Rome 's Capitoline Hill is dedicated on the ides of September Year 1963 ( MCMLXIII) was a Common year starting on Tuesday (link will display full calendar of the Gregorian calendar. Richard Rogers, Mary Kay's son, is chairman and CEO, and David Holl is president and COO. [1].

In 1968, the company went public, being traded on the over the counter market. By 1976 it was large enough to be traded on the New York Stock exchange. In 1985, Ash took the company private through a leveraged buyout. As a private company, Mary Kay Inc. does not make all of its financial information available to the public. [2]

Contents

Markets Mary Kay is in

Mary Kay Entered the market
YearMarketYearMarketYear Not KnownMarket
1963USA1993Singapore?Switzerland
1971Australia1993Russia?Moldovia
1978Canada1993UK?Netherlands
1980Argentina1994Brazil?Lithuania
1984Uruguay1994Japan?Latvia
1986Germany1995China?Estonia
1988Malaysia1995Portugal?Dominican Republic
1988Mexico1996Finland
1988Thailand1997Czech Republic
1991New Zealand1997Ukraine
1991Guatemala1999El Salvidor
1991Taiwan1999Hong Kong
1992Spain2000Kazakhstan
1992Sweden2000Philippines
1993Bermuda2000Slovakia
1993Brunei2001Korea
1993Chile2002Uzbekistan
1993Guatemala2005Moldovia
1993Malaysia2006India
1993New Zealand2006Poland
1993Norway2008India

A grey market serves vendors of Mary Kay Cosmetics in other countries. A grey market or gray market is the trade of a commodity through distribution channels which while legal are unofficial unauthorized or unintended by the original manufacturer

The Products

The original nine skin care products were based upon a recipe from a tanner, allegedly whose skin was much smoother, and clearer than his age would indicate. In the United States, roughly 200 products are currently available. In other countries, fewer products are available, because they are reformulated to meet local laws or, more commonly, consumer preferences. For example, Asian makeup is sometimes much whiter than European makeup. African (the continent) makeup has traditionally been more ochre than European makeup.

Some products, such as Mary Kay Whitener, are created for a specific country, or geographic region. Other products, such as the Mary Kay Limited Edition, are created to reflect seasonal changes.

In the early nineteen nineties, recognizing that the majority of both its customers, and consultants were women of color, Mary Kay introduced colors that were more suitable for that market.

PETA celebrated a semi-victory in the cosmetics industry in 1989, when Mary Kay Cosmetics announced a moratorium on animal testing. [3] The sought-for victory --- fur coats are not prizes --- came in 1996, when Mary Kay stopped offering fur coats as incentive awards for its sales force [4]. The final push may have been a series of embarrassing cartoons that appeared in newspapers across the country in the years immediately preceding the ban. In 1989 they were published in The Night of the Mary Kay Commandos[5] by Berke Breathed. The Night of the Mary Kay Commandos is the seventh collection of the comic strip series Bloom County by Berkeley Breathed. Guy Berkeley "Berke" Breathed (born June 21, 1957) is an American Cartoonist, children's book Author / Illustrator, A famous line from the book reads Even their Uzis are pink.

In 1995, to adhere to the laws of The People's Republic of China, Mary Kay opened a plant in Hangzhou to manufacture and package products. A European plant was opened in 1997, in La Chaux-de-Fonds, Switzerland, to serve the European market but was closed in 2003.

In 2005, wholesale sales of Mary Kay products to the consultants exceeded $2. 2 billion. [6] This $2. 2 billion figure does not account for products returned by consultants to the company. [7]

Sales Volume

Mary Kay Sales Figures
YearWholesale VolumeConsultantsDirectorsNational DirectorsWholesale volume / Consultants
1963$198,154[8]318[8]00$623. 13
1973unknown21,069[9]450(?)2(?)unknown
1983$300,000,000[9]195,000[9]unknownunknown$1,538. 46
1989$400,000,000[10]200,000[10]unknownunknown$2,000. 00
1991$511,000,000[11]220,000[11]unknownunknown$2,322. 73
1992$500,000,000[12]250,000[12]unknownunknown$2,000. 00
1993$735,000,000[9]325,000[9]unknownunknown$2,261. 00
1994$850,000,000[13]unknownunknownunknownunknown
1995$950,000,000[13]unknownunknownunknownunknown
1995 Russia$25,000,000[14]unknownunknownunknownunknown
1996$1,000,000,000[13]unknownunknownunknownunknown
1997 China$12,000,000[15]15,000unknownunknown$800. 00
1998 China$7,200,000[15]unknownunknownunknownunknown
2001$1,400,000,000800,000unknownunknown$1,750. 00
2001 USAUnknown500,000[16]unknownunknownunknown
2001 Mexico$20,000,000[17]unknownunknownunknownunknown
2002$1,600,000,000850,00019,000[18]more than 300[18]$1,882. 35
2002 USAunknownunknown13,000[18]unknownunknown
2002 China$120,000,000[15]120,000[19]unknownunknown$100. 00
2003Just under $1,800,000,0001,100,00018,500[20]More than 100[20]$1,636. 36
2004$1,960,000,000[21]1,300,000[22]27,000[6]410[22]$1,507. 69
2004 USAunknownunknownunknown210[22]unknown
2004 Canada$125,000,000[23]29,357[24]661[24]16[24]$4,257. 93
2004 United Kingdom$7,700,000[25]3,500[20]More than 70[20]0[20]$2,200. 00
2005$2,200,000,000[6]1,600,000[6]31,000[6]just under 500[6]$1,375. 00
2005 China$300,000,000[26]400,000[26]unknownunknown$750. 00
2005 USA$1,300,000,000[26]715,000[26]unknownunknown$1,818. 18
2005 Canadaunknown32,820[27]673[27]17[27]unknown
2005 Argentinaunknown20,000[28]500[28]8[28]unknown
2005 Mexicounknown175,000[29]unknownunknownunknown
2005 United Kingdomunknown5,000[30]140[30]2[30]unknown
2006 WorldwideUS$2,250,000,000[31]1,700,000 +[31]unknownabout 500[32]$1,323. 53
2006 Canadaunknown34,272[33]724[33]18[33]unknown
2006 USAunknownunknown14,000+[32]unknownunknown
2006 UKunknown5000 [34]140[34]2[34]unknown
2007 Canadaunknown31891[33]659[33]25[33]unknown
2007 USAunknownunknownunknown215 [35]unknown
2007 WorldwideUS$2,400,000,000 [35]1,700,000 [35]unknownunknown$1,411. 76

Notes:

The Car

In 1968, Mary Kay Ash purchased the first Pink Cadillac, where it was repainted on site, by the dealership owner, to match the Mountain Laurel Blush in the compact. [36] It was such a good rolling advertisement that Mary Kay Ash decided to reward her top five producers, by providing them with a Pink Cadillac paid for by the company in 1969. Pink was an obvious color choice --- matching the company's eye and lip color palettes. Since 1980, the shade used by the Mary Kay fleet has been exclusive to Mary Kay. Every two years, a Director or National can requalify for a new Cadillac. When the two year lease has expired, the cars are repainted, prior to being auctioned off. The shade of pink has changed over the years. In 1998, the color was changed to "pearlized pink". In honor of its 35th anniversary, the Mary Kay edition, white GMC Jimmy sport utility vehicle was offered in the United States. In 2007, the color changed to either black, or smoky platinum, depending upon which model the consultant chose to lease.

The Mary Kay pink Cadillac became available to qualified directors.
The Mary Kay pink Cadillac became available to qualified directors.

In the United States, the 2006 vehicle choice consisted of a Pontiac Vibe, Pontiac Grand Prix or a Cadillac. A Mary Kay director that qualifies for a car may choose from a Cadillac DTS, a Cadillac CTS, or a Cadillac SRX. The Cadillac DTS (DeVille Touring Sedan is a Full-size luxury sedan from the Cadillac luxury division of General Motors. The CTS is a mid size Luxury car made by General Motors for the Cadillac brand The Cadillac SRX is a Mid-size crossover SUV produced by the Cadillac division of American automaker General Motors since the In 2007 the offered cars were Saturn Vue, Pontiac G6, Pontiac Vibe, Cadillac CTS, and Saturn Aura. [37]

The current (2005)GM (USA) fleet size is 9,870. [38]

In the United Kingdom, Germany, The Netherlands, and Spain, the car is a pink Mercedes-Benz. Mercedes-Benz is a German manufacturer of luxury Automobiles Buses coaches and Trucks It is currently a division of the In Argentina, one receives a pink Ford, while in Taiwan, it is a pink Toyota. Ford Motor Company is an American Multinational corporation and the world's fourth largest automaker based on Worldwide vehicle sales, following (pronounced) is a Multinational corporation headquartered in Japan, and is currently the world's largest Automaker. [39]. In Australia, one gets to choose between a Ford Falcon, or Volkswagen Beetle. The Ford Falcon is a Full-size car which has been manufactured by Ford Australia since 1960 The Volkswagen Beetle, officially known as the type 1 and originally called ‘Käfer’ is an Economy car produced by the German auto maker Volkswagen [40] In China, the vehicle is a pink Volkswagen Santana. The Volkswagen Passat is a Family car built by Volkswagen through six design generations since 1973 In the Nordic countries you receive a pink Volvo V50. The Volvo V50 is the station wagon version of the Volvo S40 Small family car, produced by Volvo Cars, introduced in 2003 Bologna Motor [41]

The specific qualifications for earning the car depend upon the country, and vehicle that is desired. If those qualifications are not met, then the Car Driver has to pay for a portion of the lease of the car for that month. Meeting the qualifications entitles the Car Driver to pay no monthly lease and 85% of the car insurance, or a pre-determined cash compensation award. [42]

Since the program's inception, more than 100,000 Independent sales force members have qualified for the use of a Career Car or elected the cash compensation option. [7] It is not known how many Directors select the cash option in lieu of the car, but GM estimates that it has built 100,000 pink Cadillacs for Mary Kay. [36]

Earnings

Mary Kay reveals as little about the financial side of the company as it can. As a consequence, there is very little reliable information about actual earnings by consultants.

There are two ways to earn money in Mary Kay:

  1. Retail sales;
  2. Recruiting;

In both instances, the potential income is affected by the consultant turnover rate.

Recruiting commission earnings

"Recruiting commission earnings" reflects the commission and bonuses that one earns from the wholesale purchases of their downline. It does not include income from retail sales. It does not include income from the Mary Kay tools business.

A press release [43] claimed the following for Canada in 1999:

Of the 16,000+ consultants:

In an April 2005 press release, Mary Kay (Canada)[44] claimed the following for Canada in 2004:

Of the 29,357 independent Mary Kay Consultants:

In an April 2006 press release, Mary Kay (Canada)[44] claimed the following for Canada in 2005:

Out of 32,821 independent Mary Kay Beauty Consultants:

In a February 2007 press release, Mary Kay (Canada)[44] claimed the following for Canada in 2006:

Out of 34,272 independent Mary Kay Beauty Consultants:

For Mary Kay (USA) Nationals, the 2006 median gross income (prior to business expenses) is $75,443. [45]

Retail sales earnings

There is no reliable data for earnings from retail sales. The quoted figure of US$1,375 per year for the average consultant was derived by dividing the annual wholesale sales by Mary Kay Corporate, by the number of consultants in Mary Kay. This figure is obviously incorrect, as it does not take into account product returns, eBay, auctions, sales at a discount, and purchases by "personal use consultants" --- all of which would lower this figure

Consultant turnover rate

A 68. 6% turnover figure has been calculated based upon information supplied by Mary Kay (USA) to the FTC. [46]

An 85% turnover figures has been calculated, based upon the data supplied by Mary Kay (Canada). [44] That document 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.

Retirement income

Individuals who qualified as National Director, prior to the age of sixty, are given the status of National Director Emeritus at age sixty five. This status entitles them to a retirement income that is equal to 60% of the average of the best three of the last five years prior to retirement. That monthly is paid to the retiree or their surviving family for 15 years. There is no retirement plan for other consultants.

Controversial Aspects

A number of criticisms have been leveled at the company by current and former Mary Kay Consultants. The following is a list of some of the more controversial aspects of the company:

Woolf v Mary Kay Cosmetics

Woolf v. Mary Kay Cosmetics, No. 00-5612-J (Dallas Co. , Texas, Dist. Ct. ) was originally decided in favor of the plaintiff, Claudine Woolf. A plaintiff ( Π in Legal shorthand) also known as a claimant or complainant, is the party who initiates a Lawsuit In doing so it marked the first time[47] that workplace rights could be applied to independent contractors who worked from their home. Occupational safety and health is a cross-disciplinary area concerned with protecting the Safety, Health and welfare of people engaged in This decision was stayed and then reversed after an appeal. [48][49] The Supreme Court USA ruled Certiorari Denied 31 May 2005. Certiorari (ˌsɚʃioʊ('rɛri 'rɑri is a legal term in Roman, English, Philippine and American law referring to a type of Writ [50]

In this case, Ms. Woolf was terminated from her position as director because her unit failed to make production for three consecutive months. Ms Woolf contended that her firing was illegal, because of her medical condition --- she was suffering from cancer. Cancer (medical term Malignant Neoplasm) is a class of Diseases in which a group of cells display uncontrolled

The 90 Day Clause

Section 10:2:ix of the Director's Agreement[51] reads as follows: ix) If, for any reason, SD shall leave and remain outside the US for a total of 90 days or more during any period of (12) consecutive calendar months. Termination under this section 10. 2 shall be effective at Company's option upon mailing to Sales Director written notice of termination or at such other subsequent date as may be specified in such notice, except in the case of termination for failure to maintain Minimum Sales Unit Production, in which case termination maybe made effective by Company as of the last day of the last full calendar month that Sales Director's Sales Unit failed to meet Minimum Sales Unit Production.

One of the effects of that clause, is that several Mary Kay Consultants who are in the United States National Guard, and were called to serve in Iraq, have had their directorship terminated. Because Mary Kay Beauty Consultants are Independent Contractors, the Uniformed Services Employment and Reemployment Rights Act does not appear to be applicable. The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA was signed into law by U

Inventory

One of the criticism of Mary kay Cosmetics is that it is a product based pyramid scheme. A pyramid scheme is a Non-sustainable Business model that involves the exchange of Money primarily for enrolling other people into the scheme without This criticism is based upon the pressure to purchase more inventory than one can expect to sell at the MSRP within a reasonable period of time. The ( manufacturer's) suggested retail price ( MSRP or SRP) list price or recommended retail price ( RRP) (originally

Several levels of inventory packages have been established for the new US based Beauty Consultant:

From the data in the Mary Kay Sales Figure Table above, it appears that the typical US Consultant purchased $1818 (wholesale) of product in 2005. This implies that an initial inventory purchase of $1,800 will turn over once per year. This also implies that there is no economic justification for purchasing an initial inventory of more than $1,800, and that for maximum profitability, a lower initial inventory purchase should be made.

The commission income of Sales Directors is directly linked to the wholesale inventory purchases of their downline. Retail sales are irrelevant to the amount of commission that is earned.

When placing a product order, Mary Kay makes no attempt to ascertain whether or not prior purchases have been sold to bona fide third party retail customers. This means that the company can not comply with either the Amway Safe Harbor Defense,[52] nor the more lenient 50% rule, in any FTC action against them.

In accordance with FTC regulations, and State Laws[53] Mary Kay offers a 90% refund for products purchased within the previous 12 rolling month period. The value of the products are calculated on the basis of the lowest wholesale price at which they were offered.

One effect of a product return is that everybody who earned a commission on the initial wholesale inventory order has to repay that commission.

Mary Kay Qua Pyramid Scheme

California Penal Code 327: Every person who contrives, prepares, sets up, proposes, operates any endless chain is guilty of a misdemeanor. As used in this section, an 'endless chain' means any scheme for the disposal or distribution of property whereby a participant pays a valuable consideration for the chance to receive compensation for introducing one or more additional persons into participation in the scheme or for the chance to receive compensation when a person introduced by the participant introduces a new participant. Compensation, as used in this section, does not mean or include payment based upon sales made to persons who are not participants in the scheme and who are not purchasing in order to participate in the scheme.

In a 2005 article,[54] SmartMoney. com online magazine outlines one of the criticisms of Mary Kay: There's another way to earn income from Mary Kay: by recruiting new consultants. Recruiters earn a percentage of each inventory purchase made by the consultants they have recruited. And when recruits start assembling teams of their own, the first recruiter makes a commission on the inventories purchased by the recruits' recruits, and so on.

According to the Federal Trade Commission, a pyramid scheme is a multilevel marketing plan in which the main way of earning money is by recruiting new distributors of a product. The best way to tell if a multilevel marketing company is a pyramid scheme is to find out how most of its sales reps make money — by selling the product to end customers or by bringing in fresh recruits, says Robert FitzPatrick, president of Pyramid Scheme Alert, a consumer organization, and author of False Profits[55] The FTC has a similar anti-MLM article[56].

'After years of silence, Mary Kay distributors are now coming forward to report abuses of inventory loading, pressure to recruit other MK salespeople, large financial losses and a company culture that blames its own victims. [57]

Mary Kay Ash Charitable Foundation

Established in 1996, the mission of the Mary Kay Ash Charitable Foundation is two-fold: • Committed to eliminating cancers affecting women by supporting top medical scientists who are searching for a cure for breast, uterine, cervical and ovarian cancers. • Committed to ending the epidemic of violence against women by providing grants to women’s shelters and supporting community outreach programs.

In May, 2006 The Foundation awarded 13 cancer research grants of $100,000 each to esteemed doctors and medical scientists in the United States. In October 2006, the Foundation awarded $20,000 grants to 150 women’s shelters across the United States for a total of $3 million.

Additional information about the MKACF and annual fundraising/donations can be found on their website.

In popular culture

External links

This article does not contain any external links due to continual External Link edit wars. Pursue the references for more information about Mary Kay Cosmetics.


References

  1. ^ Mary Kay Company Information page
  2. ^ Mary Kay At-A-Glance - June 2006
  3. ^ http://www.peta.org/about/victories4.asp
  4. ^ Fur Is Dead > History of Our Fur Campaign
  5. ^ http://www.amazon.com/Night-Commandos-Featuring-Smell-O-Toons/dp/0316107387 The Mary Kay Commandos
  6. ^ a b c d e f MK Corporate Press Kit 2006
  7. ^ a b Mary Kay At-A-Glance - June 2006
  8. ^ a b Mary Kay Ash | 20th Century American Leaders Database
  9. ^ a b c d e Mary Kay Corporate Milestones
  10. ^ a b Torrington HR Report
  11. ^ a b Avon Product Report
  12. ^ a b U Texas Article
  13. ^ a b c Mary Kay (UK)
  14. ^ Avon and Mary Kay
  15. ^ a b c http://www.eiu.com/index.asp?layout=IWArticleVW3&article_id=1289170114&refm=iwIndustry&industry_id=40000004
  16. ^ CIO
  17. ^ US Mexico Chamber of Commerce
  18. ^ a b c Mary Kay Cosmetics
  19. ^ http://www.eiu.com/index.asp?layout=IWArticleVW3&article_id=1289170114&refm=iwIndustry&industry_id=40000004
  20. ^ a b c d e Mary Kay (UK)
  21. ^ Family Business
  22. ^ a b c Mary Kay Corporate Press Kit 2005
  23. ^ Seller Beware
  24. ^ a b c Mary Kay (Canada) Reported earnings 2004
  25. ^ Hoovers Mary Kay (UK) Reports
  26. ^ a b c d More Chinese Women Donning Mary Kay Uniforms
  27. ^ a b c Mary Kay (Canada) Reported earnings
  28. ^ a b c Mary Kay (Argentina)
  29. ^ Mary Kay (Mexico)
  30. ^ a b c Mary Kay (UK)
  31. ^ a b Company Information
  32. ^ a b | 2007 Press Kit
  33. ^ a b c d e f Mary Kay (Canada) Reported earnings
  34. ^ a b c UK Company Information
  35. ^ a b c Utah woman a star in pink
  36. ^ a b Ledger Article
  37. ^ Brochure: Mary Kay Career Car Plan Guidelines - July 2007
  38. ^ Mary Kay GM Fleet
  39. ^ Mary Kay (United Kingdom)
  40. ^ Mary Kay (Australia)
  41. ^ Mary Kay Nordic
  42. ^ Brochure: Mary Kay Career Car Plan Guidelines - February 2005.
  43. ^ http://web.archive.org/web/20000916131228/www.marykay.ca/home/EarningStatement.htm
  44. ^ a b c d Mary Kay Canadian Earnings.
  45. ^ | US National 1206 Commission
  46. ^ [http://www.ftc.gov/os/comments/businessopprule/522418-11952.pdf Mary Kay Letter to the FTC regarding proposed changes in the rules governing MLMs.
  47. ^ Fired Mary Kay Worker Wins Lawsuit
  48. ^ Northern District of Texas 301 cv 688-57
  49. ^ [http://www.5thcoa.courts.state.tx.us/cgi-bin/as_web.exe?c05_05.ask+D+800147 Court of Appeals Fifth District of Texas at Dallas No. 05-03-01099-CV], October 20, 2004.
  50. ^ |Order List:544 US
  51. ^ | Director's Agreement
  52. ^ Webster v. Omnitrition, 79F. 3d 776, 782, 784 (9th Cir, 1996)
  53. ^ |Texas
  54. ^ Rethink the Pink
  55. ^ False Profits
  56. ^ FTC on MLMs
  57. ^ Mary Kay Distributors Document Losses and Abuse -- End Silence
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