Network Marketing Companies Going Forward
Most distributors retail very little products, but usually only buy items for their own consumption so they
can meet the monthly quotas.
Of course its an awesome business. You get others to join and purchase products. They in turn signup
people who purchase products. And everyone gets a share of the sales in their downline organization.
But this has run afoul of the SEC and they are demanding a higher percentage of retail sales to non distributors.
With all the news about Herbalife and Ponzi Schemes, I was thinking about how MLM's could fix this issue. Obviously
some of the commission qualifying needs to change such as forcing someone to participate in autoship to get commissions.
Maybe they could change what they call distributors? Why not call them affiliates or something like that? And why does there
have to be retail sales? How about just getting sales to more affiliates? Maybe this is all semantics but the affiliate marketing
industry does this type of stuff and I don't see Bill Ackman attacking that industry on CNBC.
I'm not sure the answer, but the reality is most people in MLM are selling the opportunity and not the products. I don't have a problem with that but the SEC does.
