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November 27, 2005
Amway "Lukewarm" About China's New Rules
By QBlog in Miscellaneous
The Wall Street Journal reports that new direct sales rules recently passed in China are "eliciting a lukewarm reaction" from companies like Amway.
An unnamed Amway official complained that the "administrative intervention goes too far into the micro facet of business operations." Seriously, that's a quote but I'm thinking it was translated from Chinese. The article goes on to explain some of the reasons why Amway is complaining anonymously.
In addition, commission rates for a company's sales force will be capped at 30% of its total retail sales, a much lower rate than in other countries, where both individual and group performances are taken into consideration when payment is made.
The new rules also have strict disclosure requirements. Companies must provide the Ministry of Commerce and the State Administration for Industry and Commerce detailed information on their direct-sales staff, including their names, registration numbers, primary occupations, monthly income, tax records and what percentage of their total income is generated by direct sales.
In addition, companies will be required to disclose significant lawsuits and arbitration proceedings in which they have been involved, their corporate compensation structure, recruiting and training methods, and entitlements and obligations contained in sales contracts signed between the companies and their salespeople.
You know, China may be a communist country that regularly tramples on human rights but I think it has the right idea about regulating multi-level marketing. Isn't that ironic?
I think it is sad that we much resort to Communism to crush MLM...There are clearly disadvantages about living in a free country, one of those is the slack regulation of 'opportunities' such as Quixtar. Oh well, at least most of us have our decernment about us.
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Posted by: xanadustc | November 27, 2005 5:22 AM