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Makeup Mogul

The keys to success: How Mary Kay's company became the Cadillac of cosmetics

Most companies wouldn't consider Friday the 13th an auspicious day. Yet Mary Kay Cosmetics Inc. opened its doors on Friday, September 13, 1963. Today, more than 30 years later, Mary Kay Cosmetics has shown that Friday the 13th can be a lucky day to start a business, by becoming the largest direct selling skin care company in the nation, boasting more than 400,000 representatives worldwide, who generate annual retail sales in excess of $2 billion.

Mary Kay Ash, founder and chairman emeritus, never intended to start a cosmetics business. When she retired in 1963, after a 25-year career in the direct selling industry, her goal was to combine her experiences into a guidebook for career women.

"I didn't know how to write a book," explains Mary Kay, "so I just took a legal-size pad and began to list everything good the two companies (Stanley Home Products and World Gifts) I had worked for had done. Then I took a second legal pad and began listing the problems-and there were many things I thought could have been done better. One day, it occurred to me: 'If you're so brilliant, what would you have done?' So I began to write out my answers to these problems. When I read the whole thing in preparation to begin the book, I thought to myself, 'My goodness, I've put a marketing plan on paper!'"

She then decided to use this plan to begin her own direct sales company. "To start a direct sales company, first of all you need a product that people like so much that they will come back to you for it," says Mary Kay. "Cosmetics were something women could believe in. That's important because, when you're trying to sell a product, people can tell if you're not really sold on it, yourself."

And Mary Kay had a product she already believed in. Since the early 50s, she had used a line of skin care products introduced to her by a former Stanley Products hostess. The woman sold the products, developed by her father, from her homebased beauty shop until her death in 1961. Mary Kay decided to buy the formulas from the woman's heirs and use them as the basis for her own line.

Mary Kay and her husband took their lives' savings of $5,000, found a cosmetics company to manufacture products from their formulas and rented a 500-square-foot storefront. Mary Kay wrote a five-page manual to guide her 'beauty consultants'. "They were really all friends of mine who didn't have the heart to say no!" she says.

Then tragedy struck: Almost a month before their opening date, Mary Kay's husband died of a heart attack.

"I believe that work is often the best antidote for grief," says Mary Kay. "And so, despite my shock, I decided to open the business as planned. Starting the company had been a dream and my idea, but I had never imagined that I would run it alone. I knew that I didn't have the needed administrative skills; and yet, at this point, all the merchandise, bottles and labels were useless if the company folded. I had to go on."

And she did, with the help of her 20-year-old son Richard, whom she took on as a business partner. He had taken only two years' worth of marketing classes at North Texas University, but according to Mary Kay, at least that was something to go on.

Starting with a total of just nine products, including a basic skin care set, rouge, lip and eye palettes, mascara and eyebrow pencils, Mary Kay opened for business. She fit her company's entire inventory onto a small shelving unit on her first day.

"For the first, second and third years, I drew no salary at all," says Mary Kay. "Every penny went back into the business and sometimes we worked until two or three o'clock in the morning. I did everything from packing orders to sweeping the floors, to writing the bulletins to teaching the consultants."

Eventually, their hard work paid off. After one year in business, they moved the company into a five thousand square-foot headquarters. First-year sales reached $198,000, and by the end of the second year, sales totaled $800,000.

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This article was originally published in the April 1996 print edition of Entrepreneur with the headline: Makeup Mogul.

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