Avon Withdraws From DSA; Implications For Herbalife?

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"Avon Products is leaving the trade association it helped to found more than a century ago, writing in a letter to other member companies last week that the group's bylaws might not adequately protect consumers from fraud."

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Avon splits with trade group, citing risk of pyramid schemes - The Washington Post

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"Also Herbalife itself said in the past that only approximately 39% of its products are sold to consumers who are outside of its network. The fact that Avon chose to highlight these two issues seems to speak to the Herbalife debate—whether or not the direct seller actually meant to do so indirectly."

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Avon Withdraws From DSA; Implications For Herbalife (HLF)?

Thanks for sharing that, J2MT.

I like that comment by Tom on the second link:

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Tom Salvatore • 15 hours ago

Avon's letter said (paraphrasing): the DSA has been hijacked by pyramid schemes and protecting a select few.

Avon went on to differentiate by saying:

(1) Avon doesn't encourage sales of inventory, training or business support material between Representatives- recruiters to new recruits. (what does that sound like?? Under pressure of 50 million candlepower spotlight, Herbalife just prohibited all Tool scams)

(2) Avon has a reasonable return policy. (under pressure, Herbalife changed to the "Gold Standard" return policy; which really doesn't matter because they're force feeding it to the Club members anyway.)

(3) Avon limits earning to 3 generations. (Herbalife pays Infinity Bonuses - a telltale of pyramid scheme. Sales and Profit will fall apart if Hebalife eliminates the Infinity Bonus.)

Let's stop dancing around the issue. Tupperware CEO said it plainly: The DSA and industry has been run over by pyramid schemes in the 35 years since '79 Amway. Administrative Law Judge Timony made a HUGE blunder. Pitofsky, Elizabeth Dole and the others made a huge error too. The harm has been unprecedented.

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Too bad Nu Skin wasn't mentioned in the article. As noted before:

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Nu Skin supposedly sells vitamins and skin care products. But virtually none of its revenue comes from selling anything. Instead, its money comes from recruiting a never-ending stream of new distributors who are the primary buyers of the company's products and who pay to attend seminars in the hopes of making big bucks.

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So how can their shares (or those of any publicly traded MLM company) have any real value then? That's the issue.

At least companies like Avon and Tupperware have real sales. I guess they regret ever joining the DSA. After all, the DSA, once a respected organization, got taken over by the MLM vermin and is now just a joke.

Add Mary Kay to the list of being one of the worst offenders of exploiting women and bleeding them dry. Pinktruth.com has done a great job exposing this pyramid scheme.

Mary Kay member of the DSA.

I always associated Avon with the catalog, taking orders, and collecting money upon delivery. Which is not so bad as a side business if that is all that is going on. By contrast, I have heard some horror stories with Mary Kay and inventory loading. Good for Avon walking away, the MLM industry could use a serious makeover.

I stumbled on this quote the other day and it made a lot of sense if the problems surrounding MLM are ever to be fixed.


"If commissions were only paid on retail sales, at least no one would make money upline until a downline person made some money in the legitimate open market. The focus would be on sales, not extending the sales chain. We have not seen one case of a true retail-based MLM pay plan. As a result, we see only a few recruiters at the top making money, and all else losing"

http://pyramidschemealert.org/are-all-mlms-scams/

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Originally Posted by ribshaw

I stumbled on this quote the other day and it made a lot of sense if the problems surrounding MLM are ever to be fixed.


"If commissions were only paid on retail sales, at least no one would make money upline until a downline person made some money in the legitimate open market. The focus would be on sales, not extending the sales chain. We have not seen one case of a true retail-based MLM pay plan. As a result, we see only a few recruiters at the top making money, and all else losing"

http://pyramidschemealert.org/are-all-mlms-scams/

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Precisely why MLM is such a huge failure for most and inherently flawed. The pitch and hook is about being a business owner, retiring on residual on a beach somewhere, and quitting your J.O.B.

How many people do you think would be excited about peddling overpriced crap if they were told this was about being a commission based salesperson with quotas?

If this were the case, I don't believe it would be called MLM. It would be a traditional commission sales job. MLM and retail sales don't jive. If there is more benefit from sign ups than customers, it's only natural to make them a prospect. If you're a customer but for a nominal fee you can sign up and get your products cheaper, who wouldn't sign? And heck, you might not even buy the product if you didn't think it was going to make you rich. Did I say inherently flawed yet?

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How many people do you think would be excited about peddling overpriced crap if they were told this was about being a commission based salesperson with quotas?

If this were the case, I don't believe it would be called MLM. It would be a traditional commission sales job.

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Exactly. Trying too call any of it 'direct sales' (which in reality would be from factory straight to customer - no middle man/men) is only to try and hide those flaws

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Originally Posted by Whip

Exactly. Trying too call any of it 'direct sales' (which in reality would be from factory straight to customer - no middle man/men) is only to try and hide those flaws

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That was always the ruse back in the day with Amway. I would run into someone from school or an old job and suddenly they "owned" Super Good Life Enterprises , and would proceed to try and explain that they get items direct from the manufacturer to the consumer. If you could even get far enough to see the prices it was no bargain, usually though it was the "opportunity".

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Originally Posted by Char

And heck, you might not even buy the product if you didn't think it was going to make you rich. Did I say inherently flawed yet?

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There have been some good discussions here about various MLM opps and that pricing/quality issue is what I always come back to. Even "self consumption" which sounds great in theory shows an affiliate attrition rate of 50%-90% in the first year. Nearing 100% at the five year mark, and it can't be because affiliates have simply quit shopping, just shopping via MLM.