Over the last 20 years (or thereabout), The Finance Guy has been (unsuccessfully), recruited to more than 13 direct sales teams. If you come across a lot of people in your daily life, then this probably sounds normal, or even below average! Let's face it, everyone has at some point been shown the 'MLM opportunity'.

One of the common themes with network marketing companies, is that they can teach you to make money. They all claim to offer the 'secret to financial freedom'. All you have to do is copy your 'mentors'. The promotional presentations will focus on the most successful members in the system. Despite what they tell you, no matter what you do, there is no guarantee you will earn as much as the people at the top..

We recognized more MLM smoke and mirror, techniques when we looked at the Mary Kay marketing plan. This document claims that you don't need to know anything about selling because Mary Kay will supply you with 'motivational material'. We're not saying that Mary Kay motivational materials are ineffective, but our research did find that Amway motivational content is controversial. Even though Mary Kay claims to be different, they look just like MLM!

Is Mary Kay Different From Other Direct Sales Companies

It doesn't matter which network marketing company you look at, they all claim to be 'different from the rest'. It's almost comical when you look at how similar they are when they claim to be different. Mary Kay is just like all the other MLMs in that they claim to be different!

The Mary Kay marketing plan, claims that they pay the 'highest commissions structure of any direct sales company'. This claim might be true, but it doesn't change the fact that on average, Mary Kay consultants earn less than $1,200 per year. This is based on our interpretation of Mary Kay financials

The marketing plan claims that Mary Kay has 'the highest paid women, with hundreds earning over $100,000'. If earning big money with Mary Kay is easy, then something strange must be going on in Canada, because according to the official 2015 Canadian Mary Kay Earnings Representation, only 0.03% of all representative earned over $100,000. In other words, your chances of earning more than $100,000 with Mary Kay, are around 1/3,333. Your chances of getting rich from the lottery are better than with Mary Kay

Another common MLM misconception we noticed in the marketing plan the claim that with Mary Kay, there is no middle man. The irony is that to make money with Mary Kay, you become the middle man. The commission system, which they claim is not MLM, pays you commission when your recruits make sales. You are earning a mark up on the sales of your down line

Mary Kay claims that these commissions, of up to 26%, are 'paid out of company profits'. The joke is on the consultants, because Mary Kay makes those profits from selling them product! The 26% mark up is included in the price Mary Kay charges on all products to all consultants!

Is Mary Kay An Illegal Pyramid Scheme

Even though MLMs closely resemble pyramid schemes, they are not illegal. The reason dates back to the 1979 case of Amway vs the FTC. After 4 years in court Amway was found to be offering a business opportunity, rather than a pyramid scam. The technicalities came down to wording in their paperwork. One example requires consultants to make retail sales.

The Amway ruling effectively opened the doors for all other MLMs to operate within the law. However we should remember that being legal doesn’t make it ethical. If you knew that less than 1% of people had a chance of generating a real income, would you feel comfortable recruiting new consultants?

Another issue, is that even though these rules may be in the paperwork, they are difficult to enforce. For example, several people in MLMs have said that they have cupboards full of product. This is because of the minimum monthly purchases they need to make to remain active in the system. Even though stockpiling is against the rules, there is no way for the company to monitor it.

While MLMs may be legal, that doesn’t make them ethical. If you knew that on average consultants earned less than $5 per week, would you feel comfortable recruiting all your friends and family to the ‘opportunity’.

Should I Join Mary Kay

If you are looking for a way to make more money, then it is unlikely that Mary Kay will work for you. If you become a Mary Kay consultant then you are a commission based salesperson. The only way to make money, is to sell product. Unless you can sell huge amount of Mary Kay product, you won't won't turn a profit.

The only reason you should join Mary Kay, is if you are already using the product. If you want to make money selling any product or service, then it should be something you that you are already using. There's no point trying to convince people to do something you are not doing yourself

As always, we'd love to hear your feedback in the comments section below. Let us know what you think, especially if you can share your real world Mary Kay experiences

For more posts like this, look at our list of mlm reviews.