Ethical Companies in Multilevel Marketing

Posted on November 19, 2012 · Posted in Business
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Ethical companies and multilevel marketing, with the shadiness often attributed to the latter term, are sometimes jokingly referred to as contradicting terms, kinda like oxymorons such as “freedom fighters” or “business ethics” (ref. the late comedian, George Carlin).

But an issue recently popped up regarding the multilevel marketing company that I’m in via Salon Direct that now has me convinced that the company I’m with has a strong moral code and is one of the most ethical companies out there, multilevel or traditional.

Repeating the basis of a previous blog post, I don’t know why people often assume that all multilevel marketing companies are scams.  There are many ethical companies that use multilevel marketing methods to expose their products to the public.  In fact, if you think about it, any kind of referral marketing is a form of multilevel marketing and referral marketing is one of the most important sales tools used by ethical companies.

Perhaps the shadiness associated with multilevel marketing comes from the inability to regulate this kind of marketing as closely as traditional marketing such as TV infomercials or newspaper ads.  Even ethical companies in multilevel marketing can’t completely control how their referral network, i.e., word-of-mouth sales force, sells their products since it is often “under the radar” of regulators such the Federal Trade Commission.  Perhaps the best thing that can be done by ethical companies in multilevel marketing is to properly train their distributors in what can and cannot be said in order to sell their products or services.

One of my favorite websites to check for ethical companies and unethical companies in multilevel marketing is MLM Watchdog since it acts as an alarm of possible multilevel marketing scams.  While this is not an official website sanctioned by any regulatory body of our government, these guys seem to be among the first to send out warnings to me about scammers in the multilevel marketing arena.  As mentioned in a previous blog post, ZeekRewards was supposed to be one of those ethical companies in multilevel marketing but turned out to be a multimillion-dollar Ponzi Scheme in which people lost a lot of money and this was exposed by MLM Watchdog.

To be sure, there were, and still are, many businesses not included in the grouping of ethical companies, but then there are also many traditional corporations not in this exclusive group of ethical companies as well, so it’s unfair to lump all multilevel marketing companies together as scams.  Remember Enron and Adelphia Communications?  I assure you that there are plenty more non-multilevel marketing companies out there that aren’t ethical companies as well but we just haven’t heard about them…yet.

Anyway, back to why I now know my own multilevel marketing company to be one of the most ethical companies out there…

This past month, there were some posts on Facebook stating that one of the high-ranking independent distributors, who happens to be the daughter of the company CEO and a company co-founder, started telling her downline of independent distributors that one of the company’s best-selling products, a topical lotion, was dangerous to use on the face because it might cause “breakdown of collagen”, collagen being the primary protein component of our skin.  This was a very damaging rumor that could have cost our multilevel marketing company millions of dollars in sales or even put it out of business since the formula in this lotion is one of the primary components in our flagship product as well.

So now the scientist in me started thinking about this (remember how I mentioned that my formal training was as a scientist and engineer?).  Until now, everything told me that our multilevel marketing company was one of the most ethical companies out there so rather than try to “help” by immediately passing the news on and perpetuating this rumor, like some other distributors recklessly did, I did a bit more research into the ingredients of this lotion by cross-checking them with the MSDS (Material Safety Data Sheets) and the National Institutes of Health dietary supplement database for any signs of toxicity.  Of course, there were no signs of toxicity to our skin in any of the ingredients.  Common sense should have also alerted a lot of people that this nasty rumor was bogus.  After all, this is a lotion that is used on our hands, legs, necks, wherever, and collagen happens to be the primary protein component in the skin covering these areas as well so the many people who use this lotion would be melting down like the Wicked Witch of the West in “The Wizard of Oz” after water was dumped on her if the rumor was true.  I decided to wait for the final say on this issue before warning anyone about possible issues regarding this lotion.

It turns out that this rumor about “collagen breakdown” in facial skin was false, of course.  I suspect it was started by either a competitor in the health and beauty industry or by a vengeful person who wanted to wreak havoc on our company.  If this rumor had gotten out of hand and spread rapidly, like so many of them do, I can’t even imagine the extent of the damage this could have caused to our company’s sales and reputation.  Quite possibly a company killer.

So what did I learn from this?  Well, I learned that it is almost always good to hesitate before passing judgment on unsubstantiated rumors until the facts are known.  I also learned that our multilevel marketing company is truly one of the most ethical companies in existence.  If the daughter of the company CEO and co-founder was concerned enough to put out a warning like this, albeit an unnecessary one, that could have cost the company dearly, this tells me that she was more concerned about peoples’ safeties than about profits.  This would be a difficult thing to do even for other ethical companies.

When we discuss ethical companies, we don’t really mean that the companies are ethical.  We mean that the people who run the companies are ethical.  I’d only heard about the high moral standards and ethics of our company founders but never had anything to substantiate it til now.  As our company is pretty much a family-run business, this idea of placing people ahead of profits shown by the CEO’s daughter could have only come from her parents, the company owners.

I’m now thoroughly convinced that our multilevel marketing company is one of the most ethical companies out there and can proudly let others know this as well.