The New York Times headlines this today (PDF here in case):



Why Short Sellers Want to Crash the Tupperware Party

Here's from the piece:

"When the Federal Trade Commission proposed new rules this spring for multilevel marketers — businesses best known for commercials that promise riches selling herbal supplements and beauty supplies — it drew howls of protest. Tupperware party-givers, diet pill vendors and knife salesmen sent the agency more than 15,000 letters complaining that the proposed rules would undo a $30-billion-a-year industry."

The article reports that short stock sellers are now an ally with the FTC - the short sellers are "betting that the stocks of multilevel marketing companies will decline when the new rules, which have received little public attention, go into effect." (They have not yet - KK.)

The new rules "would require companies to tell potential recruits how many sales representatives have failed to earn more than their start-up costs..."

"If companies have to tell recruits that the average income is only $1,400 instead of the $50,000 advertised on their Web site, or that the average salesman only lasts two months, a lot fewer people are going to sign up,” said Mimi Sokolowski, an analyst with Sidoti & Company who follows Tupperware Brands, Nu Skin Enterprises and other publicly traded multilevel marketing companies."

She ads - "if the proposed rules pass without modification, recruitment in the United States could fall by as much as 40 percent." (Chances are good the rules will be modified a bit - KK.)

The story uses Pre-Paid Legal as an example of short seller enthusiasm (although they mention Avon, Tupperware, NuSkin, Herbalife, Mannatech, USANA Health Sciences and Medifast.)

"Under the rules, Pre-Paid Legal would have to tell prospects that fewer than a quarter of its sales representatives sold more than one insurance plan in 2005, something it disclosed to investors in a filing with the S.E.C. While Pre-Paid's Web site tells prospects that if they “market just five memberships per week, you'll receive $500 per week!” very few representatives have consistently sold five memberships a week."

Promises are killing our business. Because they aren't true. It is NOT easy to make money doing this or any other business of one's own. Plus we don't know for sure how a product will affect someone else, do we?

We don't need the promises. Stories of what happened for you or others? Yes. Dreams? Yes. Promises? No.

There are ways to excite people about the business AND the products you love without ever making a promise about what they'll do for someone else. Check out If my product's so Great, how come I can't Sell It? or the So You Want to Be a Networker? CD program.

Or come with us to Network Marketing Central (http://networkmarketingcentral.com ) where people hang out who strive NOT to make promises they can't keep - and still excite others about the possibilities.