Advocare ABANDONED the MLM Industry!
When the headline hit, in May of 2019, many wondered why... what's up!
They stated, that after 'Confidential talks with the FTC' had concluded, the only 'viable choice' was to remove itself from the MLM Industry. This raised concern for many, as they pondered what was actually happening, and the impact on the industry.
FTC Settlement with Advocare
Then, I received an email from MLM Attorney Kevin Thompson, where he expresses initial reactions to the FTC Settlement... "The Federal Trade Commission formally announced an enforcement action and settlement order(s) today with MLM company Advocare. Beyond a $150 million monetary judgment and the company’s permanent exit from the direct sales space, the enforcement action featured some important insights into the FTC’s regulatory perspective of network marketing companies.
As I read Kevin's email, it became clear that Advocare had allowed Volume Requirements, more specifically, Personal Purchasing, even more specifically, Personal Purchasing of Large Quantities... 'They waded in deep!'
How many calls have I fielded, with existing MLM Company owners, as well as Start-Ups, that are engaged, or planed to engage a Personal Purchase Rule!!! ARGH! How many times must we have this conversation!!!!????
Folks, think about McDonalds... each year, they have the Monopoloy Game. The fine print states No Purchase Necessary!
In America... with the exception of Lottery Tickets and Franchises, 'Opportunities' should be with No Purchase Necessary!!! I'm ok with an Application Fee, but a Requirement to Purchase 'This' or 'That' or 'This Much per Month'... come on!
A Teachable Moment for Direct Selling?
Today, an email from the World of Direct Selling features an article from MLM Attorney, Jeffrey Babener. He also weighed in on the FTC vs AdvoCare events. The FTC spiked the ball in the end zone, noting at its press conference, “It is significant that we have a large and well known multilevel marketing company that is admitting that it operated as a pyramid… “
Read that again: “It is significant that we have a large and well known multilevel marketing company that is admitting that it operated as a pyramid… “
Then, an exchange of corrective statements... the FTC Jumped the gun with that statment, but, once the toothpast is out of the tube, you really never get it put back in....
“Foul!,” called AdvoCare in an immediate responsive press release:
“The FTC incorrectly stated in a press conference that AdvoCare had admitted to operating as a pyramid. This is categorically false. AdvoCare forcefully rebutted this charge in its discussions with the FTC. To this day, AdvoCare denies it operated as a pyramid.”
Actually, AdvoCare was technically right… No such admission had been given (although it had stipulated to the veracity of the factual allegations in the Complaint), prompting the Director of the FTC Bureau of Consumer Protection to later apologize at the Washington, D.C. DSA Legal and Regulatory Conference.
Listen, AdvoCare did wrong. I speak with, personally, dozens of Start-Ups and existing Companies every month, as they seek MLM Software
, or to upgrade thier MLM Software from a competitor
, that is failing them.
In the discussion, we go over their business model, and we turn many away! Why?
Well, this AdvoCare settlement is right out of the text-book of my conversations with companies seeking our MLM Software
If you don't want to do business correctly... call someone else!
The Tide of Media against MLM
Why do I turn business away? Because the Industry has some bad-apples... and we don't need more of them. The MLM, Network Marketing Business Model is an Amazing Model. It works for Companies and Sales Reps... that are interested in Marketing their Company's products or services. There is nothing wrong with the Model, it is the Details of the Model, Rules and Business Operational Methods that Companies put in Place, which are NOT ETHICAL.
What if I said your Daddy is a Used Car Salesman!
Your Daddy is an Insurance Salesman!
To those that ARE Used Car or Insurance Salesmen, you may be offended, here...
..Those that are NOT, go why did you say something so Ugly about my Daddy?!
In our society, we often view Used Car Salesmen and Insurance Salesmen as sleezy, unethical, etc.
Why? Because of some Bad-Apples.
Does that mean the Industry is an Illegal Ponzy Scheme? NO!
Does it mean another guy could open a business tomorrow, and provide Incredible Service selling Used Cars of Insurance?
Yet, the Media has climbed onboard...
The News jumps on Vemma, Herbalife, Advocare events, publicizing as if they represent every company.
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Why I Finally Gave Up My MLM Side Hustle
MLM is NOT Illegal... no more than Insurance or Used Car Businesses are Illegal!
But, you CAN Operate Illegally or Unethically in any business.
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Scott H Leonard
Founder, Inspetta LLC