FTC Business Opportunity Rule and Direct Sellers
The FTC's proposed new business opportunity rule has drawn fire from some direct selling advocates, but other multi-marketing particpants have urged mlm'ers to respond with favour to the new FTC Rule. There was a very thoughtful post on scam.com about why network marketing has such a poor reputation.
The author's basic point was that network makes economic sense if the distributor's advertising budget is zero because each marketing agent a) sells the product by word of mouth, and b) the agent's personal reputation or credibility is sufficient to overcome the purchaser's stigma against direct sales.
I thought the post was thoughtful because it pointed out that in an internet world, the idea that real personal relationships don't count anymore is an easy sell. But it is false - the economic archimedean point for network marketing is the personal reputation and credibility of the marketer.
Does the FTC Biz Op Rule put the relationship back in network marketing?
Technorati Tags: personal reputation, network marketing, ftc rule, personal relationships, thoughtful post, credibility, ers, biz op, drawn fire, markes, internet world, stigma, marketer, word of mouth, purchaser, scams
I believe that it does. One of the key disclosures required by the FTC is the number of requests for cancellations - both oral and written. This is an excellent indicator of reasonable buyer regret: Damn, I cannot make a go of this distributorship and it seemed too simple or easy.
It is extraordinarily important that this disclosure document be available online so that a true comparison of the opportunity costs between mlm scheme a and mlm scheme b can be made prior to contacting the mlm scheme. It is unfair to individuals, the company, and the general market for direct selling to only provide this information seven days before a decision, possibly life alerting, has to be made.
