Not all government regulation is bad because it helps protect people from unscrupulous businesses that prey upon unsuspecting people.
If you are considering “doing the business” you have to accept the fact that MLM is heavily regulated, and certain MLM industry segments are even more heavily regulated than others. That’s just a fact.
However, keep in mind that “all” industry is regulated and at risk. Just pick up the newspaper or go online if you want to “understand” the political environment we live in today.
Is there personal risk associated with heavy regulation? You bet! If you don’t understand the government regulation imposed upon businesses, and the various reasons for regulation by politicians, you are even more at risk. Professor Michael E. Porter in his book Competitive Strategy, Techniques for Analyzing Industries and Competitors, certainly considers this aspect of business risk as does any quality business school and quality company management.
Of course, the same risk that applies to businesses applies to you by being in the business, and that requires your “due diligence” when picking a company. When your company fails because of government regulation you will fail. All your hard work will go down the drain with it.
Obviously, if the company you are with has quality management, and understands how to play in the game, they can turn this risk into a “competitive advantage.” Their competitors will be eliminated from business and they will benefit along with you. If possible, don’t get on the wrong side of that equation when picking a company because you will seldom if ever win.
BurnLounge shut down the network marketing part of their business and that means their Network Marketers have a problem. If that was a “right” decision or “wrong” decision by them (due to government action) the decision will still have a major impact on the Distributors (who are also their customers) trying to do the business. I have not personally “studied” this company so I have no opinion about BurnLounge.
Here’s one comment I read about this situation: “Instead, the company will focus on the free service, in which anybody with a Web site can become an online music retailer. Excellent move. The network marketing aspect seriously dampened my enthusiasm for what otherwise sounded like an interesting new way for artists to publicize their music. ” Would you agree with that statement? Yeah, perhaps if you are Amazon.com or Wal-Mart.
Free societies exist because of “rule of law and a level playing field” so even though you certainly can’t eliminate risk you can do these things:
- Look at the history of the company and how they deal with government regulators.
- Look at the quality of the management and/or the Board of Directors.
- If a Sci/Med Board is applicable look at the quality of the people on their board (they certainly don’t want their professional reputation tarnished because they have a lot at stake outside the company).
- Ask Key Employees questions about various pending government regulations that will impact their industry.
- The longer they have been in business, and the more influence they have in their industry, the better. Higher risk comes with start-ups (that doesn’t mean the risk is not worth it).
- Has their Compensation Plan been tested in the court system? For example, the Stairstep Breakaway Plan is an older plan used by many of the top companies. This plan is familiar to regulators and has a track record.
Take the time to educate yourself and be diligent when picking a Network Marketing Company to join.
