Direct Selling News August 5^th(Express News) From AVON,NU SKIN 2 enterprises to today’s 43 enterprises, from sporadic practitioners to the scale of 40,000,000 people, direct selling enterprise has been through Greenwood era in about ten years’ development history and gradually ushers a standardized management era, new direct selling regulations expects to be introduced. Recently, Direct selling DOD network also focused on the controversies of direct selling regulations and developed a research on direct selling enterprises, distributors and relevant experts, the research result shows that direct selling regulations need to be amended according to the opinions of over 90 percent respondents, while licensed direct selling enterprises management has been paid more attention.

Current situation: direct selling regulations is full of controversy.

“Network direct selling” is suspected of hitting the edge ball of policy.

Government has legislated for direct selling in 2005,till now, direct selling regulations has been carried out for nearly 10 years. During these 10 years, the number of licensed direct selling enterprises has sharply increased from 2 to 43,the radix of practitioners has doubled and the overall performance of direct selling industry has soared to RMB128.91 billion in 2013 with the year-on-year growth of 40.12 percent. But direct selling regulations keeps unchanged over the years, meanwhile the controversy of amending related regulations never stopped.

According to the survey data, in the aspect of amending direct selling regulations, the thought of opening multilevel direct selling has accounted for 37% as the highest, which is also the long existing point in dispute after the issue of direct selling regulations.

The president of Direct selling DOD network Wang Liming said frankly,” The present direct selling regulations has stipulated that the enterprise should be single-level, but in fact, the hidden rule of every direct selling enterprise is multilevel, as long as government strictly restricts these violations, then many direct selling enterprises can no longer survive.”

It’s worth noting that there is no definite regulatory rule in related regulations aiming at the recent rising network direct selling mode, but in practical operation, comparing with “ground mode”, network direct selling is easily to arise a situation that direct selling enterprises proceed the direct selling activities in unapproved region. Most of people think that the development of internet will lead cross-regional to become the operational problem of enterprise or distributor, while 29 percent of people think the cross-regional direct selling should be permitted.

The experts of this industry also expressed that, in fact, “network direct selling “ of direct selling enterprises has been regarded as hitting the edge ball of policy, comparing with “ground mode”, network direct selling seems more secluded in the operation method which may be suspected of pyramid schemes, no matter takes what kind of sales form, if involves in cross-regional operation , it will be illegal. The president of Direct selling DOD network Wang Liming believes that as long as enterprise proceeds sales on internet on the basis of direct selling, its behavior is illegal. Network marketing is a trend for future development which hasn’t been restricted by country, but if any direct selling enterprise proceeds direct selling activities by using internet in unapproved region, which will be regarded as cross-regional violation, this is against direct selling regulations.

30% bonus accuse of without change with market

For many years, the bonus allocated by direct selling enterprise has been limited to under 30 percent, if over this “red line”, it’s likely to be suspected of pyramid schemes. There also exists different views about this. Wang Liming said the reason for adjusting 30% bonus allocation proportion is out of actual demand.” As to the current distributors, 30% bonus limit is actually very small, the gross profit of some traditional industries is over 30%, let alone direct selling. If the bonus limit is too small that it will not attract distributors, even act opposite on the scale up of direct selling enterprise.”As per some representatives, bonus allocation proportion should be set up according to the market mechanism, the allocation proportion of every enterprise can be different.

Besides, according to Direct selling products range announcement, there are only 5 categories of direct selling products can be launched at the present stage, including cosmetics, health food, cleaning products, health care equipment and small-sized kitchen ware. 16% of people think that the type of direct selling products should be opened according to the survey.