The Vemma decision. What does it me

The Vemma decision. What does it mean?

It means that Vemma and just Vemma must change immediately their compensation plan and a lot of their promotional materials.
It means they get control back of their company and their assets and can be back in business Monday morning.
It means that the FTC now has some traction in requiring actual customers in order for sales leaders to qualify for commissions...something that many of us have been wanting anyway for years.
Vemma is the only company that is required to make any changes based on this. And all MLM companies will be looking at this decision and deciding what their profile is for the FTC to be looking at them.

Vemma would never have been looked at had they not had kids on college campuses nationwide brashly, arrogantly and rudely yelling at kids ( and their parents that saved all their lives) that college is stupid. And calling anyone that disagreed with them Haters.
Vemma is not the only company that has factions of distributors that are old school, frantic, manipulative ,deceptive recruiters. Our profession is loaded with them. They live in the pure MLM something for nothing environment. They jump from " the fastest growing company in the history to the next faster growing company in history". They are parasites. If they stay in our profession they eventually learn. Some sooner than others.

There are young pilots. There are old pilots. There are Bold pilots. But there are no old bold pilots. They same is true for MLM leaders. There are no old (replace bold with rude) MLM leaders. Their marketing place eventually runs them off.

In short here is what gets companies in trouble. You might score your company in these categories:

1. Do customers actually buy and keep buying the products...customers outside the compensation plan. What is the ratio of active distributors to customers. If it is at least 1 to 1 you are golden.
Mediocre overpriced products have always been at the core of the customer issue. Many MLM companies have products that no one would buy if it were not for the compensation plan. Those companies are de facto pyramid schemes. If you are in one do us all a favor....Get Out.

2. How do you present the income opportunity? Anyone can do it, you will probably make a lot of money, its easy, no selling and it all happens very quickly, look at my on stage giant fraudulent check and the new car I "won"......Or...it is work, selling, most do not succeed and it takes 4-5 years to build a significant business. Are you Real or Hype?

3. Google your company. Are the majority of the entries positive or negative. Regulators have google too.

4. Press. Is there bad press about your products or company? It does not matter if it is true or not. Regulators love seeing bad press. It means they can take you down just by filing a law suit against you and claiming you are a pyramid. Vemma..

5. Lawsuits? Former distributors, suppliers, employees, shareholders or competitors. Lawsuits mean there is a culture of poor communication and a lose lose culture with stakeholders.

6. Growth...the faster you grow the more the sales force grows out of compliance. Growth is great but out of control growth is a death sentence. Every leader needs to understand the rules and the culture. If they join and build too fast the company gets way out over its skis.

7. Inventory loading and unhappy distributors.. Are there distributors with a bunch of product they cannot sell? Does the company make buying it back difficult? Is it like getting Timer Warner or Comcast on the phone?

8. Culturally..are you all about the money the flash, the growth and the comp plan or all about the products and personal growth?

Score your company. Score your own team culture and decide your risk profile. My guess most of us are golden.

There are hundreds of companies that have had similar compensation plans to Vemma for decades that have never been at risk and will never be at risk because they never get out over their skis. They never let the goons lead the way.

Although I hate that the FTC and the judge used Vemma's bad press and over zealous opportunity videos to nail us and I hate that they are ignorant about the good things we do and the customers we do create, I am very happy that top sales leaders and companies will be thinking hard about how to shift their focus.
We have often relied on failed distributors to be the majority of our customers or in the case of an pyramid schemes we have not paid any attention to customers at all. Now we have to pay attention to actual customers. This is fantastic for our profession.

This case and tragedy of it may also serve to motivate all MLM companies to come together in an alliance far more powerful that we have as DSA members. And while I would prefer that this WAS the Direct Selling Association's mandate it may not be a fit for the agenda of its largest members.

Imagine an Alliance or Association that was NOT controlled by the MLM companies themselves but was established with clear mandates as follows:

1. To channel the resources of millions of distributors and hundreds of companies to wage an unprecedented education and marketing campaign to establish the legitimacy of the MLM profession. To establish our right to sell and income opportunity as well as our products and our right to our model of " The sales people we have the more sales we have". We have the right to recruit and recruit and recruit just like realtors, insurance and franchising. Imagine a ten million dollar a year campaign. Imagine full length actual educational documentary films. Imagine the most credible people on our side all voicing their support.
This is all available with the right resources.

2. To require all member companies to define customers and sales team leaders the same. Customers are those that do not recruit and do not receive MLM compensation. Sales team leaders successfully recruit and earn compensation. Simple. All members would show at least 50% customer sales.

3. All member companies are required to submit their customer ratios and be audited annually. This data would be made available to any regulator under NDA.

4. All members company's actual practices are monitored on an on going basis. The alliance staff googles the company every month and studies product and income opportunity promotion.

5. The Alliance leader is an industry Czar. This is someone who's job it is to educate and sell the world on our way of selling products and services. Think Mark Cuban or Rita Davenport or Bill Clinton or Jeff Bezos. For a few million a year we can get someone with passion, credibility and reach.

6. And the most potent force in the Alliance is you...millions of you. Sales team leaders that demand the right to build a business, demand the right to recruit as many people as you want to be recruited, demand the right to employ the MLM model " A lot people selling a little bit each". Imagine the buying clout a million sales leaders could create in travel, insurance, shipping, financial services, legal and anything else we buy. The discounts alone would offset the dues by 500%..

7. Imagine a simple online certification program that taught all members the simple basics of legitimate and ethical network marketing. Imagine everyone being certified ...a card carrying certification that you are an Ethical Network Marketer.

There is one 100 year old association controlled by the largest direct selling and MLM companies. There are only 200 members. There are at least 700 MLM companies based here in the US.
There is the MLMIA and ANMP but neither have captured the masses attention....yet.

We have an opportunity on the backs of Vemma and its sales leaders to rally our forces and take a stand for our profession. Perhaps the DSA will reinvent itself. Perhaps it will be the other associations.
Perhaps it will be something brand new that turns this adversity into the breakthrough many of us have fought for.

If you want to be part of a future dialog email me at Rb@RichardBrooke.com