Network Marketing for years has had it’s challenges, from one issue to the next!
Now it’s about to get tougher! You see if you won’t doing it right all along then this would be a major disaster for you, but if you’d been doing things RIGHT, then you have no problem.
One of my coaches took quite a few weeks putting this information together to get the word out.
Network Marketers are going to have to change the way they do business.
And he was ever so happy to guest blog here. I’ve just shared some of the key points he talked about in the original blog post (mainly the outcomes of the case between Herbalife vs FTC)
You can read the full blog post at this link but below are the nuts and bolts!
Herbalife, in my opinion, is actually one of the “good” companies
(Note: I’m not in Herbalife nor do I have any relationship with them. This is purely an assessment on business practices.)
They actually stress retail sales to the point where distributors are literally opening physical stores to sell product.
Herbalife is one of the most retail-focused businesses in our industry.
Which is probably why they accepted the terms of the FTC agreement.
My theory is that they accepted these terms because:
a.) they believe they can stay in compliance…
b.) because they don’t believe most network marketing companies will be able to survive under those same restrictions and…
c.) just in case, they might heavily rely on their international business to keep revenues strong.
It’s a risky gamble, but there is a caveat as it relates to your company.
Now, what are those terms?
And what do they mean to our industry?
And that’s exactly what we’re about to explore.
What you’ll learn today are the three main points that came out of the Herbalife settlement, which are most relevant to YOU…
And why they are a WARNING to our entire industry.
Ignore at your own peril.
Herbalife distributors now required to have 66% of all their organizational product volume come from retail sales.
Also, Herbalife distributors must now track how much of their volume is going to distributors, and how much of that volume is going to retail customers, as reported by individual distributors.
Which has never been required of any network marketing company or it’s distributors!
Think about what 67% of organizational volume means for a moment…
Let’s say I just started at Herbalife, then in order to get my check, I basically need to be selling product to two other people who are consuming twice as much as I am, personally.
Likewise, if I’m a big leader with a hundred, five hundred, or a thousand people in my team, that means 66% of the volume produced by my downline also has to be going to retail customers.
Failing to comply will result in the cancellation of commissions for any distributor who’s organization doesn’t meet this requirement.
That’s a HUGE restriction!
In fact, if that restriction was put on most network marketing companies, they would fail miserably!
This is because the short-sighted recruitment-based (not retail) strategy I described in the original post.
Essentially, if these new rules became law for the entire industry, then according to the FTC, these recruitment-based companies would be illegal pyramid schemes.
We’ll talk about this further in a moment…
The next settlement result was no more autoship.
Basically distributors can no longer be required to enroll in a autoship for product every single month.
And let’s be perfectly honest for a moment…
Autoship is an essential part of many companies’ business model.
I’m not sure exactly how this is going to work, but as I understand it from looking over the settlement…
Autoship as a requirement for getting a check and being a part of of distributorship is simply not allowed anymore.
And again, if these stipulations became law…
The businesses that are based solely on recruiting and personal consumption, will no longer be able to leverage autoship.
Which will completely disrupt the recruitment-based business model, so that a business can no longer be built that way.
Sounds like bad news to me!
Today, the restriction on product volume and banning of mandatory autoship are only binding for Herbalife, NOT the entire industry.
So when we’re talking about these restrictions becoming laws, we’re only talking about a hypothetical future…
Well, maybe—but maybe not.
Many experienced legal experts believe these restrictions are a sign of things to come.
That these restrictions will eventually become not only the industry standard…
But legally binding, so that the entire industry must focus on retail sales.
Needless to say, this would be very damaging to a lot of companies.
If this happens, with the way most companies in the network marketing space operate, in my opinion, they’d be operating illegally and be at risk of getting shutdown.
That’s a LOUD statement, yet I know more top earners than I can count on 10 hands in many different companies…
And I’d say a majority of them focus on recruitment, not sales.
Their attitude for most of their careers has been, if their reps get a customer here or there—great!
But by and large, their volume has been produced by distributors via personal consumption.
I’ve always insisted this is the definition of a pyramid scheme
Now, the FTC thinks so too.
So give this some serious thought…
Herbalife—which, remember, is one of the biggest network marketing companies in the world—accepted the terms laid out by the FTC.
And you know the implications of this move?
Well, it essentially means that they, for all intents and purposes, agree with the FTC’s definition of a pyramid scheme.
And now they intend to demonstrate that they are not a pyramid scheme on the basis of their massive volume of retail sales and allow the FTC to stamp out their competition.
Think about that for a moment, and then ask yourself…
“So What’s Next for My Business?”
How are you going to respond to these 3 major changes to our industry, if this applies to your commission check?
Because even if you are not affected today, you need to be thinking of the near-future.
So to start with, you need to ask yourself…
- How is your company teaching you to build?
- How is your upline teaching you to build?
- And how are you actually building your organization?
Because if you’re building in a way that resembles the FTC’s definition of a pyramid scheme—meaning that retailing product isn’t the foundation of your strategy—then you’ve got to address the very-real reality of the situation, and have an honest talk with yourself to decide your best move.
Allow me to make a suggestion…
How to Build an Opportunity Prospect List Online
The key advantage to having built my business online is that for the past 10 years, I’ve attracted all my prospects, customers, new business builders using the online methods, passively in a big way.
As a result, I’ve built a massive list of over 100,000 home business owners, who know, like and trust me.
But even when my list was only 600 strong in 2007, that was enough for me to build a full-time income from home, so don’t let the big number scare you.
Here’s my point tho…
Essentially, I secured my business from the beginning by building a following and brand, of people in my organization and outside of my organization and company.
Okay, let’s say something happens to your network marketing company—and heaven forbid, it goes away (as happens from time to time) or the FTC says your company isn’t compliant and your commission check disappears…
Well, if you’ve followed my branding strategy, that’s not a problem!
Now, some of your followers will be on your team, but I’ve found that the majority of my list (95% or so) and community members are people that trust me, but whatever reason, didn’t join my opportunity, but they still wanted to be connected, because they reaped value from my generic training.
Because after all, you are going to learn A LOT about building a networking business as you grow and succeed, so why not build a community and some “security” by helping others learn what you’ve figured out.
With a list like this and by doing things right, all of your followers will see you as a business person that can teach them things that will help them in their business, whatever it may be.
And maybe if you announce that you’re making a big move in the future…
Well, you’ll be announcing this to a big list of people who love this industry and love you and might love to join you in your new venture!
That’s why you build a list, a following and brand, using “Attraction Marketing.”
How to Build a Product Prospect List Online
And speaking of customers, many top earners have actually built massive lists, followings and brands, that are designed to introduce your online prospects to your product FIRST!
For instance, you can build a brand around…
- Health and wellness
- Nutrition, and
- Specialty diets
You can build a brand around being some sort of a niche expert within the larger health field.
And I know people who have built brands around being…
- Essential oils experts
- Weight loss experts
- Peak fitness experts
- Holistic health and nutrition experts
- Financial services
And the list goes on.
By building a brand and a marketing strategy around one of those type of niches, you’re actually…
Positioning yourself perfectly to comply with the potential FTC rules
And everything to do with providing real value to people’s lives.
Everything I’ve described is what “attraction marketing” is all about.
The definition of attraction marketing is as follows:
“To attract people to you, because you can help them solve their problems.”
To solve their…
- Money Problems
- Health Problems
- Debt Problems
- Energy Problems
…you get the idea.
If you become somebody who can solve someone else’s problems, in any market or niche, whether inside of or outside of network marketing…
Then you’ve positioned yourself beautifully to actually…
Have a REAL business and long-term security…
…regardless of what happens to your network marketing company.
Using attraction marketing strategies means creating the ultimate security against anything that happens with the FTC or your network marketing company and the ability to attract endless product customers to you as well, if that’s what you desire.
So if you’d like to learn the attraction marketing and recruiting strategies I personally use today generate 300-500 red hot prospects per day, 30-50 new customers per day, and 80-100 business builders join my organization per month…
Click Here to Download My Free 10-Day Online Recruiting Bootcamp to Get Started.
You’ll be empowered to build a product prospect list, opportunity prospect list, or a list of people interested in joining you in any niche you want.
You just need the vision and the belief, and I can provide you the know-how.
‘Til next time!
Thank you to
Author of the Attraction Marketing Formula
CMO, Elite Marketing Pro