The Biggest Mistake MLM Companies Make

The network marketing industry is governed by regulatory bodies that in general aim to protect distributors and customers alike. Some of these bodies are government related independent institutions and others are non-profit organizations. I call theseregulatory bodies — 3 lettered agencies.

In my previous blog, we’ve already covered a discussion around the BBB, the FTC, and the SEC. Today, we’re going to dive into the DSA — The Direct Sales Association

So what is the DSA?

The DSA is national organization that promotes, protects, and polices the network marketing industry.

But before we dive deeper into the DSA’s roles, let’s step back for a minute and consider what Direct selling is.

Direct selling is the business model that provides entrepreneurship opportunity for people to sell products or services as independent contractors outside the traditional retail business model.

In this model, independent contractors engage in one-to-one selling or one-to-group selling through a variety of sales methods whether it is face to face interactions, online events or in-home presentations, etc.

As far as earnings are concerned, independent contractors are not salary based, instead they earn commission pay-outs based on their own personal or team sales efforts based on the compensation plan structure of the company they represent.

The DSA plays a major role in making this type of entrepreneurship possible for people who want to take advantage of it. Securing Individual economic empowerment for distributors in the field is central to the DSA’s mission.

Another major role of the DSA is that it represents and stands for all network marketing companies that use a uni-level, a multi-level, or infinite level compensation plan. And it even speaks and advocates on their behalf.

Part of its mission is to provide education opportunities, guidelines, and tools for MLMs to ensure leadership ethics but it also works closely with congress and other government agencies such as the FTC to advocate for the industry, protect customers, and advance industry standards.

While regulation agencies such as the Federal Trade Commission (FTC) are always looking out for the consumer. The DSA operates as such that it considers the best interest of not just the consumer but also the distributor — YOU!

In my opinion, the distributor in MLM companies are the most vulnerable party. All of these agencies have regulations and oversight to protect the customer but rarely is the distributor protected enough. That’s where the DSA comes in. Because it takes distributor interest seriously and advocates for the individual’s right for economic empowerment.

Companies that are in good standing with the DSA follow a set of guidelines that help mitigate risk for the distributors who build them.

These companies usually are member companies and have gone through the membership application process and are approved as ethical members. To be accepted as a DSA member, companies have to practice full transparency and share detailed information about things such as: commission payouts, commissions/gross income ratio, customer/rep counts and much more.

The DSA has weight in the industry. In my opinion, companies that have been around for 5+ in the United States and are not in good standing with the DSA are companies to be wary of. They may not be bad, but you’ll have to do more digging.

If the company you’re considering to join is already a DSA member, some of the digging work is already done for you. At the very least, it is an indication that the company you’re looking at is forthcoming and transparent, following ethics and guidelines, and isn’t hiding behind anything.

Now that we’ve completed our overview of all four 3-Lettered Agencies: the BBB, the FTC, the SEC, and the DSA, it is a glaring truth that the BIGGEST MISTAKE a network marketing company can make that is detrimental to its reputation is to get on the wrong side of the law or a regulatory agency.

So today’s research question to ask is:

#24: Is the company you’re evaluating an approved member of the DSA?

Till next time,

Charles

Co-authored with Dr Maral “YESS” Yessayan, PhD.

P.S. You can always find on social media: Facebook or Youtube

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