Devoted to WAHMs -Work at Home Moms

Many multi-level, or direct selling, companies have been around for a very long time and have pretty good reputations such as Tupperware Brands Corporations (TUP) and Avon Products Inc. (AVP) but there are those that don't seem as reputable or at the very least have come under scrutiny for complaints and legal actions such as Herbalife Ltd. (HLF), Amway, and Pre-Paid Legal Services Inc. (PPD)

In April, the Federal Trade Commission proposed new rules for multilevel marketing companies and related businesses, due in part to hundreds of fraud investigations like the one that faced Pre-Paid Legal in 1997 wherein they acknowledged misleading customers and consented to suspend sales of living trusts after an F.T.C. investigation.

The new rules would require that such companies tell potential recruits how many sales representatives have failed to earn more than their start-up costs and how many customers have filed lawsuits for deceptive practices.  Another rule would be a requirement for a weeklong waiting period between approaching new sales recruits and sealing the deal.

My own personal opinion on the matter is thus; having been recruited by or attempted to be recruited by Mary Kay, Herbalife, Amway, Excel, Pre-Paid Legal, and similar companies that are no longer in business I can say that the waiting period and disclosures about actual income etc. will go a long way towards having more informed recruits, which really will cut down on those that sign up.

This will indeed hamper this industry's ability to attract new recruits but the companies who are in business to really sell a product, and not just sign up recruits, will continue to do well, although there is no denying their job will be harder.

Companies that are not so reputable will fail to attract recruits and this can't be a bad thing!

I just signed up for another direct selling company this last week. I don't plan on doing anything to 'grow' my business etc. I just wanted to buy the product at wholesale cost and unlike many other MLM companies they make it easy to do so. Of course, if someone likes the product and wants to buy it themselves and approaches me I will offer the same deal I got; sign up as a distributor and buy it at wholesale yourself.

You can make a decent living by being a representative for a company but you will have to work just as hard if not harder than you would a 'regular' job. Multilevel marketing positions can work well for those that want to work from home but your expectations need to be realistic and this move towards rules to help disclose information to you about these companies will help in that regard.

To read more about his subject and the side subject of why short sellers are supporting the adoption of these new rules go to this NYTimes.com article.