Industry Claim #1: Nobody is required to buy inventory.
This is true. Antonella even told me so when we did my official Mary Kay orientation: You’re not required to purchase a single thing from Mary Kay beyond your $100 starter kit.
“But,” she said. “There are some advantages.”
Just because you aren’t required to buy inventory in Mary Kay, doesn’t mean you won’t get the hard sell about why you’d be crazy not to buy inventory. My experience and the experiences of the women in my story suggest that you’ll be pressured heavily to buy inventory “if you’re serious about your business.”
In fact, Mary Kay is set up so it seems like the only way you’ll ever make money is through large inventory purchases. If you’re not spending enough on products, the company finds other ways to cost you money, like charging you shipping and only shipping to your house — meaning you spend time and money traveling around to deliver your orders yourself. As Lynne explained on yesterday’s edition of NPR’s On Point, to stay active in Mary Kay, you have to place $200 in wholesale orders every
month. [EDIT: Per Lynne's comment below, it's once a quarter, not once a month. — VSS]
If you aren’t ordering that much, you can’t buy products at the wholesale price — all you can do is pay retail (plus $8 shipping!) and then pass it along to your customer with 0% profit (in fact, an $8 loss).
During the course of my reporting, I interviewed another former Mary Kay lady who didn’t want to use her real name, so I’ll call her Lisa. She told me that most of the time, she couldn’t move the inventory she purchased — but people would call her up and say, “hey, I need another bottle of face cleanser.” If Lisa didn’t have the face cleanser in stock (and she usually didn’t because she was trying to avoid the giant inventory debt trap), she’d either have to pay retail and make no money or try to put together $200 worth of sales so she could buy it all at the wholesale price. Most of the time, she couldn’t get enough sales to make the wholesale minimum, so she’d just buy extra inventory for her own stockpile to do it. Which then wouldn’t sell. Meaning Lisa lost money on most of the retail sales that she made.
So no, you aren’t required to buy any inventory in Mary Kay. But they sure do have ways of making you feel like it isn’t much of a choice.
[Photo: By Misty Keasler for Harper's, August 2012: "The Pink Pyramid Scheme: How Mary Kay Preys on Desperate Housewives," by moi.]