Remember Those Lawsuits Against MK Liquidators I Mentioned in December?

You surely remember my post on December 6, 2008 regarding the fact that Mary Kay Inc was targeting online resellers of Mary Kay products with lawsuits.

As you know, I take seriously the privacy of the sources of my information. Unless they give me permission to name them, I don’t and don’t want to.

Unfortunately, one of the impending lawsuits I was informed of personally became public with its official filing in late November 2008.

The lawsuit against Mary Kay Inventory Liquidators Sharon & Dennis Lilly is similar to the lawsuit against Touch of Pink.

Sharon Lilly became a Mary Kay consultant in January of 2006. Mary Kay Inc alleges that Ms. Lilly was advertising and selling Mary Kay products online and sent her a letter demanding she stop. When she didn’t, MK terminated her consultant agreement on May 17, 2006. Apparently that’s when Sharon Lilly opened her online store, www.sharonscosmeticshoppe.com

However, according the the complaint filed, Sharon’s husband Dennis signed up to be a Mary Kay consultant on May 26, 2006, allegedly so Sharon could continue buying MK products at a discount. It took Mary Kay Inc nearly two years to figure this out: they didn’t terminate Mr. Lilly’s consultant agreement until April 30, 2008. Now, Mary Kay Inc calls Mr. Lilly’s act of signing up as a consultant “fraud” which is pretty strong language.

The main accusation in the lawsuit against the Lillys is that they interfere with Mary Kay Inc’s business model by soliciting consultants to sell their product to them, the Lillys, rather than an actual “end user,” as they claim Touch of Pink does as well.

Mary Kay Inc also claims unlawful use of their trademarks and that the defendants confuse consumers into thinking that they are purchasing guaranteed Mary Kay products from an “authorize” Mary Kay consultant. But how confused do you need to be to think you’re buy from a Mary Kay consultant when the Lillys’ site clearly displays a disclaimer that they aren’t affiliated with Mary Kay cosmetics?  (Hint: pretty darn confused. Step away from the TimeWise.)

So far, the Lilly’s have been subpoened and we await their depositions and the continuing proceedings in this case.

Like I told you in December, Mary Kay Inc is apparently going after the Inventory Liquidators online, whether they’re selling on eBay or from the own site. No doubt other lawsuits will be formally filed in the future.

Here’s the entire lawsuit filed against the Lillys for your reading enjoyment:

Mary Kay Inc., Plaintiff  v. Sharon K. Lilly and Dennis C. Lilly, Defendants 

Please note that the lawsuit document is over 2 MB — it’s large, so it will take a few extra moments to download and appear on your computer.

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No More Discontinued Color Products on Consultants’ Websites: Now What?

One of our active consultant members sent me the latest copy of the Mary Kay “eMessenger,” the email newsletter that MK Inc. sends to its consultants.

Buried in the middle of the newsletter is this one-sentence notice :

Mary Kay® Personal Web Site Last Chance Section
If you have a Mary Kay® Personal Web Site, please note that beginning Jan. 15, 2009, discontinued MK Signature® color products will no longer be available for posting on the Last Chance section of your Personal Web Site.

So now what? Consultants won’t be able to sell the discontinued color products online on their websites. Why? What’s the point of this?

If you’ve been a consultant, you know how challenging it is to get rid of those discontinued products. Once new colors come out, usually accompanied by new packaging or design, customers want the new, pretty stuff, not the old stuff. Sure, you can have a 50% off sale and try to recoup your cost.  In my experience, this is rarely very successful.

Now consultants are stuck with these old products AND they can’t feature them on the websites that they pay MK Inc. for each year, in hopes of getting rid of some of it.

Hmmmm…so what’s a consultant to do with all this old stuff?

I know! Sell it to a liquidator.

Oh wait…Mary Kay Inc. is suing all of them.

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If You Sell Mary Kay Products on eBay…Beware!

Just wanted to post this to increase the likelihood that resellers and liquidators will see this. I have posted this on eBay as well.

Mary Kay Inc Files Lawsuits Against Numerous eBay Sellers of Mary Kay Products

Dateline: December 4, 2008

If you sell Mary Kay products on eBay…beware! Mary Kay Inc. may be coming after you.

In the last week, several eBay sellers of Mary Kay products have been served with lawsuits.

You may also be aware of the ongoing lawsuit that Mary Kay Inc. filed against Touch of Pinks Cosmetics, and eBay seller who also runs a separate online store selling Mary Kay products.

The Mary Kay consultants who spend their days policing the listings on eBay and turning Mary Kay sellers in to Mary Kay Inc. are surely gloating and celebrating now. Unfortunately, there’s no evidence that these sellers have done anything wrong. And especially given that Mary Kay Inc. has yet to win any judgment against seller Touch of Pink, these additional lawsuits seems a little premature and aggressive.

If you sell Mary Kay products on eBay, I would urge you to make sure you be careful — whatever that may be, I suppose, at this point. Mary Kay Inc. is out for records from these sellers to see if they are purchasing products from active consultants and directors in the company. They assert that this is interfering in their business.

We will have to wait to see how this all plays out, but either way, it is vitally important to anyone liquidating all those excess Mary Kay products on eBay, and for that matter, other sellers of similar products.

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MK Inc. Thinks Touch of Pink is Bad? This MK Reseller is Stealing All of Their Copyrighted Pictures!

I’ve been trying to get the word out to resellers of Mary Kay that MK Inc. is filing hundreds of lawsuits against liquidators.

In doing so, I stumbled across this Mary Kay reseller who is advertising on eBay:

http://www.pinkbargains.com/

They have a fancy store that’s much more professional looking than Touch of Pink.

And ALL the photos in their store appear to be Mary Kay Inc.’s copyrighted photos! It looks like they’re stealing them off the Mary Kay website!

Not only that, but ALL the descriptions of the products are copied verbatim from Mary Kay’s website!

Here’s someone who is REALLY violating Mary Kay’s trademark and copyright. Wonder if they’ve gotten slapped with a lawsuit yet?

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Another Liquidator Sued by Mary Kay Inc.

I just received an email from yet another Mary Kay inventory liquidator that they were served with a lawsuit on Monday. This person has been selling on eBay and her own online store since 2000.

It’s apparent that Mary Kay Inc. is going after anyone who is selling Mary Kay products on eBay and in an online store.

If you sell Mary Kay products on eBay or online, beware! Mary Kay Inc. is on a mission to get rid of you.

PinkLighthouse will keep you informed on how this proceeds.

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Mary Kay Inc. Sues Another Inventory Liquidator!

I received an email from a Mary Kay inventory liquidator that she was served with a notice that she was being sued by Mary Kay Inc.!  I guess Touch of Pink Cosmetics has some company now.

This liquidator is a power seller on eBay and has been selling there since 2002.

According to the document this liquidator received,

” Mary Kay seeks to obtain testimony from ***** (which the method of getting the testimony is a request for the court to get my computer!!!) to determine the identity of Independent beauty consultants in order to file suit against them for breach of contract.
Also they seek to obtain such testimony to investigate a potential claim for tortious interference with contractual and business relationships and Texas common law trademarks.”

Apparently MK has now decided to go after the major sellers of all their excess inventory flooding the market. All the products that their former consultants couldn’t sell. All the products that their directors are purchasing month after month to keep their directorship. All the limited-edition products that they promoted that didn’t sell.

I’m no lawyer, but I don’t understand how once a consultant has purchased inventory that Mary Kay can tell them what they can do with it forever.

Regular businesses have overstocks of merchandise all the time. It’s the reality of retail. Ever heard of Big Lots? That’s where all the stuff that didn’t sell in regular stores goes.

If you’re selling Mary Kay products on eBay or an online store…please be aware of what’s going on. If you receive any notices from Mary Kay Inc, please let me know.

You know I’ll keep you posted on this!

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