The Queen of Cosmetics: Ash Creates an Empire
As Ash’s sales for Stanley Home Products continued to increase, she began to recruit and train other salespersons to work with her. It was SHP policy that for every person Ash recruited, she would receive a small percentage of their sales revenue. Soon, Ash had over 150 women working for her. However, the success of Ash and her sales team quickly began to worry SHP executives, who promptly moved Ash to Dallas and refused to let her continue receiving commissions from her previous sales recruits. Ash made the move to Dallas but resented SHP for punishing her hard work.
In 1953, Ash left SHP to take up work at World Gift Company, another direct sales organization based out of St. Louis. Given her past experience, Ash was earning over $1,000 per month in her first year. She was soon promoted to national training director for World Gift. Once again, however, Ash would see her efforts penalized. In 1963, World Gift began to worry that Ash’s power was too great and demoted her. Ash refused the new position, choosing instead to resign.
Ash had worked hard for over 25 years in the direct sales business, but all of a sudden she found herself unemployed. “The boredom of retirement caused a deepening sense of discontent,” Ash later recalled. “I had achieved success, but I felt that my hard work and abilities had never been justly rewarded.” Ever the optimist, Ash began “making a list of only those good things that had happened to me during the previous twenty-five years.”
Soon, Ash realized that what she had could make for the beginnings of a book. This book then turned into a business plan for Ash’s ‘dream company’. “Before long, I began asking myself, ‘Why are you theorizing about a dream company,’” said Ash. “‘Why don’t you just start one?’”
On September 13, 1963, Ash and her son, Richard Rogers, used their $5,000 in life savings to open a cosmetics company, Beauty by Mary Kay. Ash had bought the formula for a skin-care cream she was using as well as a storefront in Dallas, and began hiring friends as independent beauty consultants, her term for salespersons. “From my own use and the results I had personally received, I knew that these skin-care products were tremendous,” said Ash, “and with some modifications and high-quality packaging I was sure they would be big sellers!”
In its first year, company sales reached $198,000, primarily from sales sessions, or ‘skin care classes’, her sales team would hold in private homes. Ash rewarded her top salespeople with what would later become her company’s trademark – pink Cadillacs. They would all work part time, earning money both from their own direct sales, as well as bonuses from any recruits they brought onboard the Mary Kay team.
With its unique organizational structure and corporate culture, Ash’s company soared. In 1967, Mary Kay Cosmetics became the first company on the New York Stock Exchange to be chaired by a woman. In the 14 years after going public, the company’s sales grew at an average annual rate of 28 percent. As full-time job opportunities for women began to increase in the late 1980s and the company began to suffer, Ash and her son made the decision to buy back the company, which they did for $315 million. In 1986, the revamped Mary Kay Cosmetics saw its sales rebound. By 2004, company sales would reach over $1.8 billion in 30 markets.
Ash died on November 22, 2001, but not before leaving behind a successful multi-billion dollar operation and a strong lesson in entrepreneurship.
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