Mary Kay is an outstanding woman. Being young she could not build a career in small sales. However, later, she founded a huge cosmetics empire. She became an ideological inspiration for many women around the world and her business model is taught at the Harvard Business School. Read more on dallas1.one.
A woman cannot be a leader
When her husband left Mary Kay alone with three children, she had to think about incomes for her family. She got a job as a sales manager at Stanley Home Products.
Mary demonstrated good merchandising skills and quickly became a valued employee. Her career took off and she aimed for a management position. However, the woman did not receive the desired promotion. Instead, her trainee got it because it was believed that the man would be able to better cope with the duties of the manager. This became the reason for Mary to quit work and start her own business.
What inspired her to the production of cosmetics
One day, Mary Kay met the daughter of a craftsman, Ova Spoonemore, who had very delicate and well-groomed skin. Her father worked with leather and used special solutions to soften it. Ova Spoonemore used these solutions in her hand creams.
Mary Kay decided to buy out these secret recipes. She paid $500 for them. These recipes became the basis for the products of the future cosmetic company.
Establishment of the company
In 1963, with $5,000, Mary Kay dared to create her own company, which was then called Beauty by Mary Kay. Her son Richard also helped her.
Mary Kay opened the first 500-square-foot store in Dallas with nine sales associates. They offered a new approach to skin care with the help of a comprehensive cosmetic set. It consisted of 5 types of products, including washing gel for $2, night cream for $4.95, face spray for $3.50, day moisturizing cream for $1.50 and a mask for $4. Every day the newly created company gained momentum and Mary had to work for 14 hours a day. Over time, the Mary Kay cosmetics line expanded to include a pink palette with five eye and lip colors, blush, mascara, eyebrow pencil and eyeliner. During the first year of operation, the company was able to sell goods for a total amount of $200 000.
Over time, Mary Kay managed to open her own cosmetics factory located in Dallas. It becomes the basis of the company’s production capacity.
The Mary Kay business model
The main secret of the company’s success is not in the unique formulation of the brand’s products but in the developed scheme of sales. Mary Kay created a company that made it possible for every woman who has a family and raises children to personally manage her career.
Its sellers bought cosmetics at wholesale prices and looked for buyers among acquaintances and neighbors. They received from 40 to 50 percent of the markup on products for the sales. In addition, they could receive an additional percentage for attracting new representatives in other cities and states. Mary Kay believed that this approach would foster cooperation rather than competition among her employees.
In addition, Mary Kay emphasized the need to reward consultants for high results. Thus, in the early stages of development, consultants who had good sales figures received suits as a gift. In 1969, the five best sellers received new Cadillac cars painted in the company’s soft pink color.
As of 2023, the company operates in almost 40 countries around the world. The number of active consultants reaches more than two million people and the annual turnover is $2.6 billion. In 2017, the profit of the Mary Kay company was $3.5 billion. It took the 5th place in the Global 100 list that ranks direct selling companies.