You can read about it directly from the FTC here.
The FTC “attacked” both Herbalife and Vemma. Vemma in 2015 and Herbalife in 2016. As a result, they have changed their policies, the way they do business and their compensation plan.
What I’m focusing most on today is the changes in the compensation plan that affect retail sales.
The FTC released a statement about the Herbalife settlement that reads (in part) as follows:
We are pleased that this order will require Herbalife to base rewards on tracked and verified retail sales and recommend that all multi-level marketing companies likewise take sufficient steps to ensure their practices are not unfair, false, or misleading.
What this means
What the settlement mostly means is that you cannot buy your way into a bonus or a rank. Only a portion of your commissionable and rewardable volume can from wholesale personal sales. The rest must come from actual customers and end users.
You’ve probably seen or heard many network marketers say that they feel “sorry” for any Vemma or Herbalife distributors. However, even if you are not part of Vemma or Herbalife these settlements could set a precedent and affect your business.
The compensation plan of your current company could get affected in the future. So be aware.
What This Means for MLM
My company has already made changes and chances are yours has as well. Your company may have recently come out with customer rewards programs. They are putting emphasis on building recurring retail sales and rewarding you with customer based ranks or reward trips.
The profession will have a stronger focus on retail sales rather than building a team. I actually like the direction that the profession is going.
In order for a company to make income they must sell product. If you want to make company you must sell product. Excited customers will buy month after month if they love the product. A new team mate will not buy month after month if they stop making money.
How many team mates have you actually recruited that joined the business to make money and then quit the business because it was harder than they thought but still stayed on the monthly autoship because they loved the product?
Chances are the number is zero however a raving fan of the product that turns into a distributor will buy month after month whether they are making money or not.
What if you got 10 more retail recurring customers? Even if you only make $10 per customer, that’s an extra $100/month. BTW, that’s more than what most network marketers make each month.
What if each of your team mates got 10 more recurring customers? The profits would pay for their personal consumption and also put some money in there pocket. Do you think that they would ever stop their auto ship or quit? (Who would turn down free product and some extra money?”
What would that do to your business? Even if you only had 10 customers and 2 active reps that got 10 customers each and your product was $50 per month, that would be an extra $1500 worth of business volume going into your business each month! What would that do to your business volume? What would that do to your commissions? What could that turn into if that duplicated? Would your advance more ranks? Would you get more bonuses? Would your qualify for more reward trips?
What if you don’t know how to get customers effectively? If you don’t know how to get customers and if you don’t work your business with the specific steps to gain customers then you’ll get very frustrated.
Click on this link to get a FREE Audio mp3 telling you how to get recurring customers in as little as 48 hours!
I think that the FTC’s involvement in the profession and the emphasis on customers and retail sales will create more success.
What do you think?
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