by Ioana Gorecki, SSN Guest Contributor
There is a perception that the regulatory landscape for direct sellers and multi-level marketers (MLMs) has become increasingly fraught. With numerous federal and state actions targeting the industry — as well as recently proposed Federal Trade Commission (FTC) rules on earnings claims and increasingly complex labor and employment implications — some companies are questioning whether the MLM model is worth the risk.
Transitioning to an affiliate or network marketing model might seem like a safer alternative, but it’s important to understand that affiliate marketing comes with its own regulatory requirements and pitfalls. Recent scrutiny from the FTC, state enforcers and self-regulatory bodies like the National Advertising Division (NAD) underscores the need for diligence in this space.
