|Received:||7/7/2006 11:47:16 AM|
|Organization:||Avon Products, Inc.|
|Subject:||Business Opportunity Rule|
|Title:||Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Part 437|
Comments:I am writing to offer my comments in response to the Federal Trade Commission’s Business Opportunity Rule, R511993. Let me begin with some background information. Nineteen years ago, I was living in a single wide trailer in a trailer park. I drove a Yugo and subsided primarily on macaroni, to keep costs down. I had been laid off from the computer company where I had held a position as secretary. I had been an Avon Representative for five years, but had never considered selling Avon full time. Unable to find another job in the tight job market and worried that I would lose my home, I decided to “do more” with my Avon business in hopes of turning my causal, part-time business into a full time career. This was 1986. By 1987, I earned my first trip with Avon, a cruise to the Bahamas. By 1993, I sold enough Avon products to earn four national trips and to realize that Avon was to be my life-long career. The Avon business has dramatically changed my life. My confidence level has increased and my self-esteem has improved. I began to demand more out of life and I began to put more into life. Today, I am an Avon Sales Leadership Representative with a team of almost 2,000 Representatives. Our team sells close to $10 million worth of products annually. I, personally, have earned more than $2 million in this business. I have been able to help hundreds of other working women, many of them mothers of small children, build successful businesses and achieve dreams, they would not otherwise achieve. For some of us, the income from our Avon business is “extra” income for our family. For many of us, especially single moms like myself, it is not “extra” income, it is the only income. In addition to income, the Avon business offers flexibility that we would not be able to find in a typical “9 to 5” job. The Avon business enables me to work from home and to spend quality time with my one year old daughter Lydia Mae. Through my work with Avon, I have also been able to achieve professional status with the National Speakers Association, have authored three books and co-authored three others. My story has been told in dozens of books, magazines and newspapers, including “Fortune” magazine, “New Hampshire Business Review” newspaper, the book “Wave 4” by Richard Poe and “Empowering Women” magazine. FTC Proposed Rulemaking I recently learned about the FTC proposed rulemaking regarding Business Opportunities and became very concerned. I immediately knew that I must advise you of these concerns. First of all, I understand that the FTC has the responsibility of protecting consumers from “unfair and deceptive acts or practices” and I also understand that there are ill-intentioned individuals who prey upon others less fortunate or less astute regarding the ills of the world. However, there are also excellent, legitimate business opportunities available in the market place. Opportunities like the one Avon offers, which has changed my life and will continue to change the lives of others. So, I wonder if the FTC truly intends to harm innocent, well-intentioned businesses, to harm and / or restrict opportunities that are so important to so many, simply to curtail the ill-intentions of a few. Let’s take a look at the proposed rulemaking. First of all, disclosures are required to be provided to prospective recruits 7 days prior to signing a contract or paying for the opportunity. These disclosures include: • Detailed earnings disclosures if earnings claims are made • Legal actions, including civil and / or criminal actions, associated with the company or anyone involved in selling a business opportunity during the past 10 years • Cancellation or refund policy, pertaining to the business opportunity • Cancellation and refund history, pertaining to the business opportunity • References of 10 prior business opportunity purchasers (Representatives) who purchased the business within the prior 3 years. Without even looking at the content of the disclosure, one first realizes that the 7 day waiting period is rather restrictive, given the $10 investment and the nature of the opportunity. Perhaps this is a good time to explain a little bit about the Avon opportunity. First of all, prospective Avon recruits are usually individuals who have some level of a relationship with the Avon recruiter, either through a longtime relationship or through other common acquaintances. New recruits can become Avon Representatives by paying $10 for the opportunity and by signing a contract to agree to the terms and conditions, which either party can cancel at any time. There are no inventory requirements and the Avon Representative does not even purchase any product until she has received orders from customers. The Avon Representative then places the product order with Avon, receives the products and delivers them to her customers, and only after delivering products and receiving payment from customers, is she required to pay Avon. Avon also provides a “satisfaction guarantee” which simply stated ensures that if the customer or the Representative is not satisfied with the product, Avon will refund their money. It’s that simple. As you can see, there is very little cost ($10) for entering this business and absolutely no risk to the Representative. Now I ask you, does it really make sense to require a new recruit to read the disclosures, contact references and wait 7 days. The risk of spending $10 at the local grocery store and coming home with food with an expired date is far greater than any risk from Avon’s business opportunity. But the 7 day waiting period, when one is enthusiastic about the business opportunity can feel like a lifetime. This waiting period can dampen one’s enthusiasm or even cast an “aura of suspicion” on the opportunity itself and on the individual Avon Sales Leadership Representative. As for the 10 references, I, personally, would not feel justified in providing the names and addresses of my recruits to others for any reason whatsoever. I know I would not want others to be giving my personal information to anyone without my knowledge. If we must obtain a signed consent form that reads “If you buy a business opportunity from the seller, your contact information can be disclosed in the future to other buyers”, absolutely no one would be willing to sign it. Personally, I wouldn’t either. In fact, I shutter to think that if a similar form had been presented to me when I first approached Avon, I never would have signed-up as an Avon Representative and I would have missed this tremendous career opportunity. Again, I ask, does the end justify the means. And while I am not going to comment about each and every requirement of the proposed rulemaking, I must comment about one overarching element; bureaucracy. The Avon opportunity is simple. Easy to enter. Easy to understand. Easy to implement. Easy to sell. Easy to make money. And, easy to exit, if one so chooses. However, the proposed rulemaking, if adopted, would change all that. It would add bureaucracy, create a tremendous amount of paperwork, information gathering and consolidating requiring additional on-going gathering, consolidating, and updating, and would require huge amounts of paper work to be saved, filed and maintained for several (I believe 3) years. This level of bureaucracy would change the nature of direct selling and Avon forever. While the FTC is trying to protect consumers and ensure that those engaged in direct selling would be able to earn money, the additional paperwork would have quite the opposite effect. The amount of paperwork required would lessen one’s ability to sell product, and train and motivate others. Therefore, with all due respect, I appreciate the work of the FTC to protect consumers, but I believe this proposed new rule, if adopted, would harm good companies such as Avon and would hamper the ability of hardworking independent contractors from accomplishing their goals and dreams. If this proposal goes into effect as written, I fear the results to the industry – and mostly the negative consequences on so many dedicated working moms in this industry. Please endeavor to find other ways to accomplish your goals without harming innocent hardworking Avon Representatives. Thank you for your time in considering my comments.