Mary Kay
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2008-06-30T10:11:48Z
DAJF
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[[WP:UNDO|Undid]] revision 222626018 by [[Special:Contributions/71.105.171.22|71.105.171.22]] ([[User talk:71.105.171.22|talk]]) rvv
{{for|Mary Kaye guitarist and performer|Mary Kaye}}
{{Cleanup|date=January 2007}}
{{Original research|date=April 2008}}
{{Infobox_Company |
company_name = Mary Kay Inc. |
company_logo = [[Image:Marykaylogo.gif]]|
company_type = [[Privately held company|Privately held company]] |
foundation = [[Dallas, Texas]] ([[1963]]) |
location = [[Addison, Texas]] |
key_people = [[Mary Kay Ash]], Founder<br>Richard R. Rogers, [[Chief executive officer|CEO]]<br>David Holl, [[Chief operating officer|COO]] |
products = Skin care, [[cosmetics]], nail care, [[sun protection]], [[perfume]] |
homepage = [http://www.marykay.com/ Mary Kay Inc.]|
industry = Personal care products |
num_employees = Independent sales force of 1.6 million worldwide (2005) |
revenue = $2 Billion
}}
'''Mary Kay''' is a brand of skin care cosmetics and color [[cosmetics]] sold by Mary Kay Inc. Mary Kay World Headquarters is located in the Dallas suburb of Addison, Texas. [[Mary Kay Ash]] founded Mary Kay Inc. on Friday, [[September 13]], [[1963]]. Richard Rogers, Mary Kay's son, is chairman and CEO, and David Holl is president and COO.<ref name="companyinfo">[http://www.marykay.com/company/company_companyinformation.aspx?tab=home Mary Kay Company Information page]</ref>.
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.<ref name="mkataglance">Mary Kay At-A-Glance - June 2006</ref>
== Markets Mary Kay is in ==
{| class="wikitable"
|+ Mary Kay Entered the market
! Year !! Market !! !! Year !! Market !! !! Year Not Known !! Market
|-
! 1963
|| USA || || 1993 ||Singapore ||||?||Switzerland
|-
! 1971
|| Australia || ||1993 || Russia || ||? ||Moldovia
|-
! 1978
|| Canada || ||1993 || UK || ||?||Netherlands
|-
! 1980
|| Argentina || || 1994 || Brazil || ||?||Lithuania
|-
! 1984
|| Uruguay || ||1994||Japan || ||?||Latvia
|-
! 1986
|| Germany || ||1995 || China || ||?||Estonia
|-
! 1988
|| Malaysia |||| 1995 || Portugal || ||?||Dominican Republic
|-
! 1988
|| Mexico || || 1996 || Finland || ||||
|-
! 1988
|| Thailand || || 1997 || Czech Republic || ||||
|-
! 1991
|| New Zealand || || 1997 || Ukraine || || ||
|-
! 1991
|| Guatemala || || 1999 || El Salvidor || ||||
|-
! 1991
|| Taiwan |||| 1999 || Hong Kong ||||||
|-
! 1992
|| Spain || || 2000 || Kazakhstan || ||||
|-
! 1992
|| Sweden || || 2000 || Philippines || ||||
|-
! 1993
| Bermuda |||| 2000 || Slovakia || ||||
|-
! 1993
| Brunei || || 2001 || Korea || || ||
|-
! 1993
| Chile || || 2002 || Uzbekistan || || ||
|-
! 1993
| Guatemala || || 2005 || Moldovia || || ||
|-
! 1993
| Malaysia || ||2006 ||India || ||||
|-
! 1993
| New Zealand || ||2006 ||Poland || ||||
|-
! 1993
| Norway || || 2008 || India||||
|}
A [[grey market]] serves vendors of Mary Kay Cosmetics in other countries.
== 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.<ref>http://www.peta.org/about/victories4.asp
<!-- {{cite web|URL=http://www.peta.org/about/victories4.asp|Title=PETA Victories Timeline|Publisher = People for the Ethical Treatment of Animals|date=2007-01-01 page|accessdate=2007-04-02}} (This web cite isn't working correctly --></ref> 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 <ref name="mkfur">[http://www.furisdead.com/history.asp Fur Is Dead > History of Our Fur Campaign<!-- Bot generated title -->]</ref>. 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]]''<ref name=MKCartoon">http://www.amazon.com/Night-Commandos-Featuring-Smell-O-Toons/dp/0316107387 The Mary Kay Commandos</ref> by [[Berke Breathed]]. 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.<ref name="MKCP2006">[http://www.marykay.com/Company/images/2006CorporatePressKit.pdf MK Corporate Press Kit 2006]</ref> This $2.2 billion figure does not account for products returned by consultants to the company.<ref name="MKGlance2006">Mary Kay At-A-Glance - June 2006</ref>
=== Sales Volume ===
{|border=1
|+ Mary Kay Sales Figures
! Year !! Wholesale Volume !! Consultants !! Directors !! National Directors !! Wholesale volume / Consultants
|-
! 1963
| $198,154<ref name="bbsdata">[http://www.hbs.edu/leadership/database/leaders/23/ Mary Kay Ash | 20th Century American Leaders Database<!-- Bot generated title -->]</ref>|| 318<ref name="bbsdata"/>|| 0 || 0 || $623.13
|-
! 1973
| unknown || 21,069<ref name="mkcm">[http://www.marykay.com/company/company_milestones.aspx?tab=home Mary Kay Corporate Milestones]</ref>|| 450(?)|| 2(?)|| unknown
|-
! 1983
| $300,000,000<ref name="mkcm"/>|| 195,000<ref name="mkcm"/> || unknown|| unknown || $1,538.46
|-
! 1989
| $400,000,000<ref name="Torrington"> [http://www.pearsoned.co.uk/images/custom/Torrington,%2520Human%2520Resource%2520Management%2520textbook%2520map.doc Torrington HR Report]</ref>
|| 200,000<ref name="Torrington"/>|| unknown|| unknown|| $2,000.00
|-
! 1991
| $511,000,000<ref name = "avon">[http://www.dsef.org/press/pdfs/Avon_Products.pdf Avon Product Report]</ref>|| 220,000<ref name = "avon"/>|| unknown|| unknown|| $2,322.73
|-
! 1992
| $500,000,000<ref name="utexas">[http://www.tsha.utexas.edu/handbook/online/articles/MM/dhm1.html U Texas Article]</ref>|| 250,000<ref name="utexas"/> || unknown|| unknown|| $2,000.00
|-
! 1993
| $735,000,000<ref name="mkcm"/>|| 325,000<ref name="mkcm"/>|| unknown|| unknown|| $2,261.00
|-
! 1994
| $850,000,000<ref name="MKUK1">[http://www.marykay.co.uk/Display.asp?PageID=1696&Directory=Company Mary Kay (UK)]</ref>|| unknown || unknown|| unknown|| unknown
|-
! 1995
| $950,000,000<ref name="MKUK1"/>|| unknown || unknown|| unknown|| unknown
|-
! 1995 Russia
| $25,000,000<ref name="avonmarykayrussia">[http://select.nytimes.com/gst/abstract.html?res=F40D11F73C550C778DDDA10894DE494D81&n=Top%2fNews%2fBusiness%2fCompanies%2fAvon%20Products%20Inc%2e Avon and Mary Kay]</ref>|| unknown || unknown|| unknown|| unknown
|-
! 1996
| $1,000,000,000<ref name="MKUK1"/>|| unknown || unknown|| unknown|| unknown
|-
! 1997 China
|$12,000,000<ref name = "China">http://www.eiu.com/index.asp?layout=IWArticleVW3&article_id=1289170114&refm=iwIndustry&industry_id=40000004</ref> || 15,000 || unknown|| unknown || $800.00
|-
! 1998 China
| $7,200,000<ref name = "China"/> || unknown|| unknown|| unknown || unknown
|-
! 2001
| $1,400,000,000 || 800,000 || unknown|| unknown|| $1,750.00
|-
! 2001 USA
| Unknown || 500,000<ref name="cio">[http://www.cio.com/archive/120101/rule_marykay.html CIO]</ref>|| unknown|| unknown|| unknown
|-
! 2001 Mexico
| $20,000,000<ref name="usmcoc">[http://www.usmcoc.org/usa/calen2002.html US Mexico Chamber of Commerce]</ref> || unknown || unknown|| unknown|| unknown
|-
! 2002
| $1,600,000,000 || 850,000 || 19,000<ref name="Baylor">[http://business.baylor.edu/Richard_Easley/CB%20Articles/marykaycosmetics.htm Mary Kay Cosmetics<!-- Bot generated title -->]</ref> || more than 300<ref name="Baylor"/>|| $1,882.35
|-
! 2002 USA
| unknown || unknown || 13,000<ref name="Baylor"/>|| unknown || unknown
|-
! 2002 China
| $120,000,000<ref name = "China"/> || 120,000<ref>http://www.eiu.com/index.asp?layout=IWArticleVW3&article_id=1289170114&refm=iwIndustry&industry_id=40000004</ref>
|| unknown || unknown || $100.00
|-
! 2003
| Just under $1,800,000,000 || 1,100,000 || 18,500<ref name="MKUK3">[http://www.marykay.co.uk/Display.asp?PageID=1693&Directory=Company Mary Kay (UK)]</ref>|| More than 100<ref name="MKUK3"/>|| $1,636.36
|-
! 2004
| $1,960,000,000<ref name="FamilyBusiness">[http://www.familybusinessmagazine.com/topglobal-2.html Family Business]</ref>|| 1,300,000<ref name="MKCP2005">Mary Kay Corporate Press Kit 2005</ref>|| 27,000<ref name="MKCP2006"/>|| 410<ref name="MKCP2005"/>|| $1,507.69
|-
! 2004 USA
| unknown || unknown || unknown|| 210<ref name="MKCP2005"/>|| unknown
|-
! 2004 Canada
| $125,000,000<ref>[http://www.todaysparent.com/lifeasparent/workfinance/article.jsp?content=20041104_123921_4584&page=5 Seller Beware<!-- Bot generated title -->]</ref>|| 29,357<ref name="MKCanada2004">Mary Kay (Canada) Reported earnings 2004</ref>|| 661<ref name="MKCanada2004"/>|| 16<ref name="MKCanada2004"/>|| $4,257.93
|-
! 2004 United Kingdom
| $7,700,000<ref name="Hoovers_MK_UK">[http://www.hoovers.com/mary-kay-cosmetics-ltd./--ID__135117--/free-co-factsheet.xhtml?cm_ven=PAID&cm_cat=INK&cm_pla=CO1&cm_ite=mary-kay-cosmetics-ltd. Hoovers Mary Kay (UK) Reports]</ref> || 3,500<ref name="MKUK3"/>|| More than 70<ref name="MKUK3"/>|| 0<ref name="MKUK3"/>|| $2,200.00
|-
! 2005
| $2,200,000,000<ref name="MKCP2006"/>|| 1,600,000<ref name="MKCP2006"/> || 31,000<ref name="MKCP2006"/>|| just under 500<ref name="MKCP2006"/>|| $1,375.00
|-
! 2005 China
| $300,000,000<ref name="MKChina">[http://www.signonsandiego.com/uniontrib/20060804/news_lz1n4nowread.html More Chinese Women Donning Mary Kay Uniforms]</ref>|| 400,000<ref name="MKChina"/>|| unknown|| unknown|| $750.00
|-
! 2005 USA
| $1,300,000,000<ref name="MKChina"/>|| 715,000<ref name="MKChina"/>|| unknown|| unknown|| $1,818.18
|-
! 2005 Canada
| unknown || 32,820<ref name="mkcanada2005earnings">[http://www.marykay.ca/Display.asp?PageID=1484&LanguageID=1&Directory=Home Mary Kay (Canada) Reported earnings]</ref>|| 673<ref name="mkcanada2005earnings"/>|| 17<ref name="mkcanada2005earnings"/> || unknown
|-
! 2005 Argentina
| unknown || 20,000<ref name="MKArgentina">[http://www.marykay.com.ar/Display.asp?PageID=2787&Directory=COMPANY Mary Kay (Argentina)]</ref> || 500<ref name="MKArgentina"/>|| 8<ref name="MKArgentina"/>|| unknown
|-
! 2005 Mexico
| unknown || 175,000<ref>Mary Kay (Mexico)</ref>|| unknown|| unknown|| unknown
|-
! 2005 United Kingdom
| unknown || 5,000<ref name="MKUK4"> [http://www.marykay.co.uk/Display.asp?PageID=1698&Directory=Company Mary Kay (UK)] </ref> || 140<ref name="MKUK4"/>|| 2<ref name="MKUK4"/>|| unknown
|-
! 2006 Worldwide
| US$2,250,000,000<ref name="2006_MK">[http://www.marykay.com/company/company_companyinformation.aspx?tab=home Company Information]</ref> || 1,700,000 +<ref name="2006_MK"/>|| unknown || about 500<ref name="2007PressKit">
[http://www.marykay.com/content/company/images/2007CorporatePressKit.pdf | 2007 Press Kit]</ref> || $1,323.53
|-
! 2006 Canada
| unknown || 34,272<ref name="mkcanada2007earnings">[http://www.marykay.ca/Display.asp?PageID=1484&LanguageID=1&Directory=Home Mary Kay (Canada) Reported earnings]</ref>|| 724<ref name="mkcanada2007earnings"/>|| 18<ref name="mkcanada2007earnings"/> || unknown
|-
! 2006 USA
| unknown || unknown || 14,000+<ref name="2007PressKit"/> || unknown || unknown
|-
! 2006 UK
| unknown || 5000 <ref name="2007_UKMK">[http://www.marykay.co.uk/Display.asp?PageID=1698&Directory=Company UK Company Information]</ref>|| 140<ref name="2007_UKMK"/> || 2<ref name="2007_UKMK"/> || unknown
|-
! 2007 Canada
| unknown || 31891<ref name="mkcanada2007earnings">[http://www.marykay.ca/en/home/earnings-representation.html Mary Kay (Canada) Reported earnings]</ref>|| 659<ref name="mkcanada2007earnings"/>|| 25<ref name="mkcanada2007earnings"/> || unknown
|-
! 2007 USA
| unknown ||700,000 ||14,000<ref name="march2008com">[http://www.pinktruth.com/images/MKCorp/march08dircomm.pdf march 2008 Directors Commission]</ref> || 215 <ref name="slt-2008">[http://www.sltrib.com/ci_9270736 Utah woman a star in pink]</ref>|| unknown
|-
! 2007 Worldwide
| US$2,400,000,000 <ref name="slt-2008"/> ||1,700,000 <ref name="slt-2008"/>||unknown ||unknown || $1,411.76
|-
|}
Notes:
* Dollar amounts are in United States Currency;
* Dollar amounts have not been adjusted for inflation;
* Official Mary Kay, Inc. policy is to round up their gross Wholesale volume.;
* Official Mary Kay, Inc. policy is to round down the number of consultants;
== 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.<ref name="ledgerarticle">[http://www.theledger.com/apps/pbcs.dll/article?AID=/20060627/NEWS/606270341/1001/BUSINESS Ledger Article]</ref> 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.
[[Image:MK Cadillacs.jpg|thumb|295px| 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]]. In 2007 the offered cars were Saturn Vue, Pontiac G6, Pontiac Vibe, Cadillac CTS, and Saturn Aura.<ref name= "MKCarBrochure2007">Brochure: Mary Kay Career Car Plan Guidelines - July 2007</ref>
The current (2005)GM (USA) fleet size is 9,870.<ref name="mkgmfleet"> [http://www.gmfleet.com/gmfleetjsp/sitemap/csb/johnDeluna.jsp Mary Kay GM Fleet] </ref>
In the United Kingdom, Germany, The Netherlands, and Spain, the car is a pink [[Mercedes-Benz]]. In Argentina, one receives a pink [[Ford]], while in Taiwan, it is a pink [[Toyota]].<ref ="MKUK">Mary Kay (United Kingdom)</ref>. In Australia, one gets to choose between a [[Ford Falcon (Australia)|Ford Falcon]], or [[Volkswagen Beetle]].<ref name="MKAustralia">Mary Kay (Australia)</ref> In China, the vehicle is a pink [[Volkswagen Santana]]. In the Nordic countries you receive a pink [[Volvo V50]].<ref = "MKSE"> [http://www.marykay.se/sub.php?page=116&spage=119&menu=7 Mary Kay Nordic]</ref>
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.<ref =MKCarGuidelines"> Brochure: Mary Kay Career Car Plan Guidelines - February 2005.</ref>
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.<ref name = "MKGlance2006"/> 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.<ref name="ledgerarticle"/>
== 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:
# Retail sales;
# 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 <ref name=MKCanadaearnings1999">http://web.archive.org/web/20000916131228/www.marykay.ca/home/EarningStatement.htm</ref>
claimed the following for Canada in 1999:
Of the 16,000+ consultants:
* The majority earned less than $199 Canadian;
* 173 Sales Directors earned more than $19,000 Canadian;
* 3 national directors earned more than $100,000 Canadian;
In an April 2005 press release, Mary Kay (Canada)<ref name="MKCanadaEarnings">[http://www.marykay.ca/Display.asp?PageID=1484&LanguageID=1&Directory=Home Mary Kay Canadian Earnings].</ref> claimed the following for Canada in 2004:
Of the 29,357 independent Mary Kay Consultants:
* 2,267 earned more than $150 Canadian;
* 331 Sales Directors earned more than $15,500 Canadian;
* 8 National Directors earned more than $100,000 Canadian;
In an April 2006 press release, Mary Kay (Canada)<ref name="MKCanadaEarnings">[http://www.marykay.ca/Display.asp?PageID=1484&LanguageID=1&Directory=Home Mary Kay Canadian Earnings].</ref> claimed the following for Canada in 2005:
Out of 32,821 independent Mary Kay Beauty Consultants:
* 2,356 earned more than $100 Canadian;
* 336 Sales Directors earned more than $17,000 Canadian;
* 15 National Directors earned more than $100,000 Canadian;
In a February 2007 press release, Mary Kay (Canada)<ref name="MKCanadaEarnings">[http://www.marykay.ca/Display.asp?PageID=1484&LanguageID=1&Directory=Home Mary Kay Canadian Earnings].</ref> claimed the following for Canada in 2006:
Out of 34,272 independent Mary Kay Beauty Consultants:
* 2,422 earned more than $100 Canadian;
* 362 Directors earned more $16,500 Canadian;
* 16 National Directors earned more than $100,000 Canadian;
For Mary Kay (USA) Nationals, the 2006 median gross income (prior to business expenses) is $75,443.<ref name ="USNationalIncome"> [http://www.pinktruth.com/wp-content/uploads/2007/01/nationals1206.pdf | US National 1206 Commission]</ref>
=== 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.<ref name="mkftc">[http://www.ftc.gov/os/comments/businessopprule/522418-11952.pdf Mary Kay Letter to the FTC regarding proposed changes in the rules governing MLMs.</ref>
An 85% turnover figures has been calculated, based upon the data supplied by Mary Kay (Canada).<ref name="MKCanadaEarnings"/> 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{{Fact|date=March 2007}}. That monthly is paid to the retiree or their surviving family for 15 years.{{Fact|date=March 2007}} 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. In doing so it marked the first time<ref> [http://www.law.com/jsp/article.jsp?id=1039054426836 Fired Mary Kay Worker Wins Lawsuit]</ref> that [[Occupational safety and health|workplace rights]] could be applied to independent contractors who worked from their home. This decision was stayed and then reversed after an appeal.<ref>[http://www.txnd.uscourts.gov/pdf/Opinion/301cv668_57.pdf Northern District of Texas 301 cv 688-57]</ref><ref>[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.</ref> The Supreme Court USA ruled [[Certiorari]] Denied 31 May 2005.<ref> [http://www.supremecourtus.gov/orders/courtorders/053105pzor.pdf |Order List:544 US]</ref>
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]].
=== The 90 Day Clause ===
Section 10:2:ix of the '''Director's Agreement'''<ref name="DirectorsAgreement">[http://www.thepinkingshears.com/legal-director.htm | Director's Agreement]</ref> 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.
=== Inventory ===
One of the criticism of Mary kay Cosmetics is that it is a product based [[pyramid scheme]]. This criticism is based upon the pressure to purchase more inventory than one can expect to sell at the [[Suggested Retail Price| MSRP]] within a reasonable period of time.
Several levels of inventory packages have been established for the new US based Beauty Consultant:
* Pearl Star : US$4,800 Wholesale; over $700 free retail product bonus available
* Emerald Star : US$3,600 Wholesale; over $700 free retail product bonus available
* Diamond star : US$3,000 Wholesale; over $600 free retail product bonus available
* Ruby Star : US$2,400 Wholesale; over $500 free retail product bonus available
* Sapphire Star : US$1,800 Wholesale; over $400 free retail product bonus available
* US $1,200 Wholesale; over $300 free retail product bonus available
* US $600 Wholesale; over $200 free retail product bonus available
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'',<ref>Webster v. Omnitrition, 79F.3d 776, 782, 784 (9th Cir, 1996)</ref> nor the more lenient 50% rule, in any FTC action against them.
In accordance with FTC regulations, and State Laws<ref> [http://tlo2.tlc.state.tx.us/statutes/docs/BC/content/pdf/bc.002.00.000017.00.pdf |Texas]</ref> 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,<ref name="rethinkpink"> [http://smartmoney.foxnews.com/smallbiz/askedandanswered/index.cfm?story=20051024 Rethink the Pink]</ref> 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'''<ref name="falseprofits">[http://www.falseprofits.com/ False Profits]</ref> The FTC has a similar anti-MLM article<ref name="ftc1">[http://www.ftc.gov/bcp/conline/pubs/invest/mlm.htm FTC on MLMs ]</ref>.
'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. '' <ref name="psalosses"> [http://www.pyramidschemealert.org/PSAMain/news/MaryKaySurvivors.html Mary Kay Distributors Document Losses and Abuse -- End Silence]</ref>
==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==
*Mary Kay was parodied as "Lila Lee" in the ''[[Murder, She Wrote]]'' episode "Murder by Appointment Only".
*The made-for-TV movie "Hell on Heels: The Battle of Mary Kay" shows Mary Kay Ash (played by Shirley MacLaine) and her competition with Jinger Heath (Parker Posey), founder of BeautiControl Cosmetics.
==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.
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{{Cosmetics}}
==References==
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[[Category:Companies based in Addison, Texas]]
[[Category:Companies established in 1963]]
[[Category:Cosmetics companies of the United States]]
[[Category:Direct marketing]]
[[Category:Multi-level marketing]]
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