Justin Serra is the General Manager of North America and serves on the global executive team for Modere.
Justin:
"While no one can debate that the USA network marketing industry is changing, the debate continues on about what the changes will bring.
Given the size of the industry only a very small fraction of companies have been directly affected by regulators, yet many companies are nervous it could be just the beginning. Based on the precedence recent actions have set, the industry, as a whole, may have serious reason to be nervous.
Given the respected and well run companies that have been recent targets of the FTC, company owners and field leaders know it’s just a game of Russian Roulette to who could be next.
This article is not to debate the politics of why the FTC is cracking down on the industry or any company specifically, but rather to look at what they are using as ammunition in their fight. The argument is primarily about one thing- customers, that is someone who purchases from a company solely for the purpose of using or consuming the company’s products or services with no concern for a business opportunity.
The legitimacy of a company is being determined in many respects by this one factor. On one hand there may be sound logic to this assertion. To illustrate, think of a restaurant where there are more waiters and cooks earning wages than patrons. It stands to reason the restaurant would be out of business in short order- even if the waiters and cooks were buying their meals at the restaurant.
Don’t misunderstand this point as agreeing outright with the FTC’s position on all topics related to the industry but after all the opining is done the customer issue is straight forward and hard to argue against – a broad base of diverse customers brings stability to any business. The rapid rise and disastrous crashes of once notable network marketing companies have shown us the industry is not immune to this rule.
At the end of the day the FTC doesn’t care that commissions are paid on the sale of products or that networks are built of people earning overrides on the efforts of others. They care about the ratio of sales by real customers. If in fact customers bring stability to companies and organizations than shouldn’t responsible owners, operators, and network marketing professionals should care deeply about the validity of their customer base, regardless of regulatory pressures?
After reviewing in detail the points the FTC continues to raise, there are several identifying characteristics of companies that could be in the danger zone for regulatory targeting.
Industries go through changes. This is nothing new. The network marketing industry has been under intense scrutiny before, and it has survived. The industry will survive again. However, this may give us an opportunity to step back, if only for a moment, and consider how the industry has evolved in recent decades. Does it feel more stable and legitimate now than it did 10, 20, or 30 years ago?
Maybe it’s time for a disruption, or better put, a renaissance. Let us band together to defend our great industry against politics that could harm it, but let’s not do it in ignorance. Let’s ask what can be learned and how can we become stronger as a whole. One thing is certain, change is happening, but change is not always a bad thing.