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Jul 20, 2012, 09:05am EDT
Mary Kay Preys on Women
Helaine Olen Contributor
Personal Finance
I like to write and report on subjects where life meets money.
One of the most depressing evenings I have ever spent in my life was at a Mary
Kay Cosmetics shopping party.
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0:02
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0:30
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The invite came from a mutual acquaintance
Business Loans
of the saleswoman, in a telephone call begging
me to attend the event . The make-up
Hi, I'm Marie...
purveyor was a friend of hers, returning to
Your business loan expert
work after several years at home with her
child. It sounded empowering but there was a
How much do you need?
back-story -- of course. There is always a back
Lipstick (Photo credit: Wikipedia)
story. The woman's husband had lost his job,
$10,000
and there was a sudden need to bring in income. So, hello Mary Kay. The party I
was to attend was her professional debut.
When I arrived at the designated party site, there were only four other women
present. The newly minted Mary Kay seller was nervous. As she applied
$25,000
$50,000
$100,000
foundation, lipstick, blush, various eye shadows and mascara, she mentioned a bit
too frequently that it was for sale. You could feel her desperation to move the
merchandise.When the time came to make our purchases, all of us attendees
$150,000
$200,000+
looked at one another out of the corner of our eyes and, one by one, purchased a
few items, clearly feeling obliged to do so. It was like giving money to charity, but
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without getting the benefit of the I.R.S. tax deduction.
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I thought about this evening while reading journalist Virginia Sole-Smith's
heartbreaking look at the world of Mary Kay Cosmetics saleswomen in the August
issue of Harper's. Sole-Smith spoke with everyone from single mothers to former
corporate workers, to reveal the truth behind the pretty pink mask of Mary Kay.
The company promises their recruits riches, but everything from class action
lawsuits to SEC filings reveals that for most sellers, it rarely works out that way.
What's really going on is that would-be saleswoman are encouraged to invest in
"product" by other saleswomen, who will then get a cut of all resulting purchases.
Not surprisingly, most end up with little more than credit card debt and boxes of
rapidly expiring make-up for their troubles.
The name for this sort of business model is multilevel marketing and Mary Kay is
one of many. Companies ranging from Amway to Nu Skin work under a similar
framework. Many consider them to be little more than a legal version of a
pyramid scheme, yet the economically desperate ignore warnings posted by others
ranging from personal finance experts to former salesmen and saleswomen,
begging them to stay away. (It's worth noting that prominent short-seller David
Einhorn of Greenlight Capital has recently gone after Herbalife, yet another
company that operates in this matter, claiming shaky financial disclosures, and
wanting to know whom exactly is buying the product besides those selling it.)
Economic bad times, however, have been good for Mary Kay. As Sole-Smoth
reports, the company has dramatically increased the size of its sales force over the
past decade, in tandem with rising income inequality and unemployment.
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So how do these companies get away with making what many consider misleading
financial claims when signing up their sales force? First many -- like Mary Kay
Cosmetics -- are privately held, so they do not have to release their sales figures.
But a more important factor was recently uncovered by Karen Klein at
BusinessWeek. Multi-level marketing concerns do not need to provide their newly
signed up sellers with "earnings claims, a list of previous legal actions against the
firm , and its cancellation or refund policy." When the Federal Trade Commission
attempted to change this, intense lobbying caused the government to back-off. As
a result, these firms are free to continue to offer the possibility of fantastic wealth
to people who are all too frequently so desperate for an infusion of funds they will
believe almost any claim.
As for the Mary Kay sales lady leading my presentation, I don't believe it worked
out for her. She telephoned a few times, asking me to attend other events. Guiltily,
I would politely decline each time. Eventually, she stopped calling. When I asked
our mutual friend how it was going, she looked embarrassed and changed the
subject.
Helaine Olen
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I'm the author of the new book, “Pound Foolish: Exposing the Dark Side of the Personal
Finance Industry,” which was published by Penguin’s Portfolio imprint in January of…
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16,628 views | Jul 9, 2020, 10:27am EDT
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How To Better Meet Your Customer
Needs, And Do So More Quickly
Derek Klobucher Brand Contributor
SAP BRANDVOICE | Paid Program
Innovation
How to Enjoy a Sweet, Data-Driven Life -- Like Ferra…
Watch later
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WIREWAX
“Delight in every bite” is more than a mantra at Ferrara, the global candy-maker
behind SweeTARTS, Trolli, Black Forest and myriad other world-famous brands.
It’s a challenge met every day by a joint business and IT team, which makes
decisions based on up-to-the-minute views at every level of the sweets giant —
from executive-level demand forecasting to a shop floor machine’s throughput.
“Data really needs to be accurate, and it needs to be available in real time,”
Ferrara’s VP and CIO George Lesko told SAP at the candy maker’s headquarters
in downtown Chicago. “SAP HANA and Analytics actually does all of that for us.”
Ferrara uses SAP’s in-memory database to significantly reduce its reporting
times, from weeks down to minutes — and often from minutes to seconds. The
112-year-old confectionary juggernaut drives innovation with speed, agility and
accuracy, thanks to SAP HANA — part of SAP’s Business Technology Platform —
as well as a comprehensive suite of applications, including SAP ERP.
This technology enables an unprecedented partnership between Ferrara IT and
business, Lesko said in an SAP video. And it helps the company envision what’s
possible with other technologies on the horizon.
The Right Stuff — Right Away
Getting the right information to business
users — at the right time — was the challenge
solved by Ferrara Senior IT Director Mustafa
Mustafa and his team. They sought new
“SAP HANA and Analytics allows us to move
solutions, after traditional technologies failed
quickly when it comes to analyzing the
information and making decisions,” Ferrara
to provide the necessary agility and time-to-
VP and CIO George Lesko said in an SAP
value.
video. “That’s really our biggest
differentiator.”
SAP
“Ferrara selected SAP because of the
unprecedented capabilities of HANA being in-memory, and the versatile
capabilities of SAP Analytics to enable us to have a variety of tools to really meet
each individual’s unique needs,” Mustafa said. “It really took the information, and
put it at the fingertips of the business within seconds, versus minutes.”
SAP HANA has reduced Ferrara’s data storage footprint by 94 percent, compared
to legacy database technology, according to Mustafa. And the first SAP dashboard
that Ferrara deployed saved the company $200,000 within the first 15 weeks.
Plus, accurate real-time data enables Ferrara’s salespeople to actively engage with
their customers, and better meet their needs.
“Ferrara’s differentiator by using SAP HANA and Analytics is enabling us to
make real-time decisions ... [and] effectively execute upon our goals,” Mustafa
said. Looking forward, “we want to embark on big data — and applying machine
learning and artificial intelligence; so ... there’ll be other applications within the
portfolio that we’re going to add to marry all those together.”
Ferrara Fast — Inside & Out
“Ferrara Fast is at the core of our culture; we take pride in our agility and our
ability to work together to solve problems,” Ferrara VP – Sales Operations &
Integration Patrick Degnan said. “SAP technology adds tremendous value to our
business; it allows us to combine data sets from different sources, and view it in
one common hierarchy and reporting structure.”
This allows Ferrara to dive into the data, analyze and understand business trends,
and solve problems — faster than ever, according to Degnan. This helps drive
growth — both for Ferrara and the retailers that stock its candy.
“When they come to us with quick fixes or quick opportunities, we’re able to
collaborate and work together as a team to bring them solutions,” Degnan said. “It
truly is a competitive advantage for us; and it’s something that our retailers
truly value as business partners.”
Delight In Every Byte
“The SAP HANA system gives us a data warehouse that allows us to pull data,
not only from Ferrara’s SAP ERP system, but acquired companies as well,” Gene
King, Sr. Manager, SAP BI & App Development, Ferrara Candy Co., said. “Our
Ferrara business user cannot tell where the data is coming from, whether it be
Ferrara’s own system ... or the acquired business’ system — it’s seamless to them.”
And there’s no overnight batch process, King stated. Transformation happens at
query time.
“If there’s a logic issue, we adjust it,” King said. “Boom! Immediately the user is
getting the corrected results — no wait time, no outage.”
Ferrara’s IT can respond right away to business issues — and executives —
according to King. Analytics that would have taken days, now happen almost
instantaneously. This, in turn, helps Ferrara’s business users better respond to
their customers’ needs.
The Way Forward
“I’ve been doing this since the late 1980s ...
[and this is] so much better than anything I’ve
used before,” King said. “One thing I love
about the SAP HANA in-memory database is
“Ferrara selected SAP because of the
its total paradigm shift from what we used to
unprecedented capabilities of HANA,”
Ferrara Senior IT Director Mustafa Mustafa
do to provide analytics.”
said in an SAP video. “It really took the
information, and put it at the fingertips of
With its eye on the future, Ferrara has even
developed its own custom applications
the business within seconds, versus
minutes.”
SAP
using SAP HANA Extended Application Services (XS). In addition to
accessing data, users add comments and contextual information, and then save
them to the database, according to King. No more sending emails to clarify a
situation; just attach your comment to the data, and others can see the
explanation right away.
“SAP HANA has allowed us to move on to look at machine learning, artificial
intelligence and predictive analytics,” King said in an SAP video. “We’re
ready to move to that next step now.”
Rising To The Challenge
“SAP makes a lot of investments in this type of challenge ... They’ve been a great
partner for us,” Lesko, Ferrara’s CIO, said in an SAP video. “SAP HANA and
Analytics allows us to move quickly when it comes to analyzing the information
and making decisions ... and that’s really our biggest differentiator.”
The speed, agility and accuracy of real-time in-memory analytics has also fostered
the partnership between Ferrara’s IT professionals and their business colleagues,
according to Lesko.
“They see this as a something that delineates us from other IT teams that they’ve
worked with in other companies,” Lesko said. “It’s really helped us gain the
credibility that we need to continue investing in other areas of IT.”
Join Ferrara and other users in celebrating SAP HANA’s 10th Anniversary.
Follow Derek on Twitter: @DKlobucher
Follow me on Twitter.
Derek Klobucher
I'm a brand journalist for SAP. Before writing about the capital markets for Sybase, I was a
reporter covering the financial exchanges in Chicago, European regulation in… Read More
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