Ever since my article “The Pink Pyramid Scheme” ran in the August issue of Harper’s Magazine, I’ve been getting the best emails (and blog comments and Facebook messages) from you readers. (Okay, I also get some funny and not so friendly feedback… but the positive outweighs the negative by a significant margin.)
If I haven’t responded to your note directly, please understand that it’s only because I get such an onslaught and I am but one medium-sized person. But I love and read them all because hearing your thoughts and experiences has a major impact on the work I do. Anyway, I thought I’d share this one email, from a reader who asked to be anonymous,* because she’s in a pretty vulnerable spot. It takes a tremendous amount of courage to quit an MLM-style program and reconcile your losses (whether it’s money, self-esteem, friendships, or a combination thereof). Her experience is pretty much why I wrote the article in the first place — to help women who have been exploited by these scams see what they are up against and get out.
I did a really interesting interview this week with Amy Levin-Epstein, who writes for CBS MoneyWatch. We talked about why Mary Kay is so appealing to so many women, especially right now in the midst of our recession, which may actually be a mom-cession (so much for all that he-cession talk?).
Here’s part of what I told MoneyWatch.
The company’s founder, Mary Kay Ash, knew exactly why women were frustrated in the 1960s: the lack of gender equality, which meant they were dependent on their husband’s income and unable to make much headway in the workplace. But she also knew that a significant majority of women weren’t responding to the hardcore feminist revolution that say, Betty Friedan was advocating in “The Feminist Mystique.”
Just a quick one to share this link for the interview I did Monday afternoon on WOR’s The Joan Hamburg Show. Joan is old school radio and awesome and we had a great conversation about… you guessed it… the Mary Kay story.
(Click the link for the August 20 show, Hour 2 — I’m on for the first 20 minutes or so, then it’s the fertility doctor advertised in the blurb.)
Another radio podcast for y’all, in case you missed me yesterday on NPR affiliate KUER’s RadioWest with Doug Fabrizio. The RadioWest folks invited me and Mother Jones reporter Stephanie Mencimer to talk about our reporting on the direct sales industry. As you might have heard by now, I wrote this thing about Mary Kay for Harper’s; Stephanie wrote several excellent pieces earlier this year tracing how multilevel marketing companies are funding Mitt Romney’s campaign.
Everyone in the direct sales industry will tell you this. Last week, Mary Kay’s Vice President of Compliance, Laura Beitler told me on NPR’s On Point. Then Joseph Mariano, head of the Direct Selling Association said it. And then Mary Kay’s Vice President for Corporate Social Responsibility, Crayton Webb said it again, on KERA’s Think.
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?”
And one last radio update for you before the weekend! This interview with Tess Vigeland aired on NPR’s Marketplace yesterday evening. It’s just five minutes — much shorter than my other segments and tightly edited (we taped in the afternoon) but if you want a great, fast digest of my Harper’s story and everything we uncovered about Mary Kay, you’ll get it here (transcript and podcast both available).
I spent a fun hour on NPR’s KERA this afternoon, as a guest of THINK with Krys Boyd. The show airs live in Texas, where 30,000 Mary Kay consultants are currently gathered for the annual Seminar in Dallas.
Plus, Mary Kay’s Director of Corporate Social Responsibility, Crayton Webb, comes on for the second half of the show and things get… spicy.
You can listen to the podcast here (click “The Beauty Business” link), and also head over to the show page to add your comments.
When I spoke with Laura Beitler, Mary Kay’s Vice President of Compliance, on NPR’s On Point on Monday, she was quick to emphasize that “absolutely, the majority of our products end up with the end consumer.” But when we pressed her, she also had to admit: “We can’t and don’t track retail sales.”
How can both those things be true?
To avoid falling into the Federal Trade Commission’s official definition of a pyramid scheme, it’s very important for Mary Kay — and all multi-level marketing companies — to insist that their primary goal is getting their products out to retail consumers. But to avoid being exposed as a business where the vast majority of the sales force is losing money, all of these companies have to claim that they have no idea what those end retail consumers are spending.
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]