Today’s look at why Mary Kay is just the tip of a pyramid-shaped iceberg — is brought to you by the Investigative Fund, who asked me to dig deeper into the direct sales industry as a whole. I’ve been getting so many great emails from folks who have read the Harper’s story or heard one of the NPR interviews last week and one thing everyone asks is: “So what about [Avon, Amway, insert-your-direct-sales-of-choice-here]? Are they as bad as Mary Kay?”
The short answer: Most likely, yes. Sorry.
Of course, the real answer is more nuanced than that. There are lots of idiosyncrasies among the various business models, and that means some play out better than others for the sales force. For example, if you don’t have to buy inventory to make money — like, really don’t have to, not the Mary Kay “it’s not required, but…” version — you’re going to be way ahead of the game.
But bottom line: These are businesses that market lucrative income opportunities and recruit by the tens of thousands without disclosing the full story about said opportunity. That makes the direct sales industry lots of money and gets its workforce into lots of trouble. And this is no accident — the industry has been lobbying furiously against tighter regulations and disclosure requirements since the 1970s.
Get the full story — including which presidential candidate relies heavily on the direct sales industry for campaign contributions! — over on the Investigative Fund here.