DTI agrees to settle case against N21 UK under certain conditions

Earlier today I received a copy of the following email regarding Network TwentyOne in the UK. While obviously if Amway loses the case against BERR/DTI, everyone loses, this news would confirm what many have suspected – the DTI’s issues are primarily with the Amway business model (and thus, one would assume, pretty much all MLM) rather than against the BSM companies who support Amway IBOs. It makes little sense to pursue Amway and not the BSM companies if they believed the core problem was with the BSM companies, as Amway has suggested. It’s my belief that with the changes Amway has implemented, the new business model (with or without BSM companies supporting IBOs) is quite likely in the clear, and the DTI/BERR action is now primarily about what they see as potential past breaches of the Fair Trading Act. Under those circumstances I think it’s highly unlikely Amway will be shut down by the court, but I could certainly imagine a fine might be imposed.

November 9, 27

Subject: DTI agrees to settle case against N21 UK under certain conditions

As many of you are aware, the Department of Trade and Industry (DTI) in the United Kingdom filed separate complaints against Network TwentyOne UK, Britt Worldwide UK, and Amway UK.

After submitting our defense to the complaint filed against us, and after having discussions with the DTI, the DTI has agreed to no longer pursue its complaint against Network TwentyOne UK under certain conditions. First, the DTI has agreed that if Amway prevails in the DTI’s case against Amway, then the DTI will simply dismiss its complaint against us. If Amway does not prevail and is wound up, then we have agreed to voluntary wind up Network TwentyOne UK.

We feel this puts to rest some of the unfounded speculation that has arisen and clarifies the role Network TwentyOne plays in this case. We are now in a position to remain in business if Amway remains in business.

We strongly believe Amway will prevail and reorganize the UK business into a unique and effective model. We hope to work closely with Amway senior management in the UK, Europe and back in the USA to ensure Network TwentyOne continues as a valuable and responsible resource in the UK for IBOs building a balanced and profitable Amway business.

Sincerely,

Adam Livingston
Chief Operating Officer
Network TwentyOne International

N21 would obviously be delighted with having had their part of this case "settled" however it’s obvious that if Amway loses the case, all IBOs in the UK, including those affiliated with N21, will be the ones who suffer the most. Amway will still be a multi-billion dollar global company, Network TwentyOne will still be a multi-million dollar company servicing hundreds of thousands of IBOs around the world.

Thousands of IBOs in the UK will however be out of business.

Now, I personally think Amway UK & ROI has done a brilliant job with their reorganization so far and is unlikely to be closed down. Most of the new changes in the UK are extremely positive ones, and I am hopeful they demonstrate success and are implemented in other markets. While Team’s former Quixtar IBOs in the US are probably shaking their heads a little in disbelief, the cheaper prices on the homecare line should make it easier for new IBOs to retail them, and already some UK ABOs are reporting this. As a poster on the forums pointed out, the new "same price" model also will give ABOs are real sense of "money back in the pocket" as they get their rebates.

Amway however isn’t the only one who needs to "change". While the legal basis of this case may be related to the MLM business model, there is little doubt in my mind the origin of this case is the often legitimate experiences and complaints of former IBOs – and for that IBO leaders and affiliated BSM companies need to share some of the responsibility. Some of that is to do with folk simply behaving unprofessionally, but some is obviously also done to one key issue – IBO profitability.

I once heard a CD by Network 21 Crown Bob Andrews where he stated "Profitability is the IBOs responsibility". At the time I heard it, I agreed with him, and to a certain extent I still do – we are in business for ourselves, and ultimately our business is our responsibility. However – we also know that people are people and most of them *don’t* take this responsibility, and that affects the reputation of the organization as a whole. We don’t only have to do the right thing, for the sake of all involved we also have to be *seen* to do the right thing. This means we have to take a responsibility for how the organization as whole behaves, even if this means "treating" folk as if they have less personal responsibility than they should.

A case in point is an anti-Amway blogger who goes by the name Steve on this site’s forums and JoeCool18 on a number of anti-Amway/Quixtar websites (including his own) and the corporate blogs. Steve regular cites his own personal experience of "losing" thousands of dollars with his Quixtar business, despite at one stage building it to a respectable 4PV – far more than most ever do. What Steve tends to leave out is that he lives in Hawaii and was travelling to seminars and such on the US mainland. Now, this is ultimately entirely his responsibility. He could have said "no" when asked (or even pressured) to purchase tickets to events. He could have worked harder at covering his costs with retailing. Nevertheless, he didn’t.

Instead, let’s imagine his LOS/LOA/upline took an active "organizational responsibility" to oversee this better, to the point where an they said to him "I really suggest you stop spending so much money until you make more" or even "given the circumstances, expect to not be profitable until silver" – or whatever – then perhaps we wouldn’t have a guy spending a significant portion of his life devoted to damaging our reputation.

It’s simply not OK to say it’s a personal responsibility, especially when we [i]know[/i] that a lot of people [i]won’t[/i] take responsibility. If for nothing more than the selfish sake of the reputation of the organization as a whole (and by this I mean all Amway/Quixtar IBOs), IBO leaders and the BSM companies they promote need to also take responsibility for this.

If they don’t, there’ll just be more Steves sending their complaints to the likes of the DTI.

Amway UK&ROI has I believe taken a large step towards this. Quixtar and other Amway affiliates need to do the same thing. The BSM companies, including Network TwentyOne, need to look at their training offerings and ensure that they too have a major focus on what should be ultimately be the #1 focus of IBOs and indeed of any business – how much are the IBOs making?

How many BSM companies have tools which include something like a simple balance sheet designed for an IBO/ABO to keep track of their income and expenses? How many IBO leaders sit down in their IBO counselling sessions and actually ask "what were your expenses?", "what was your income", "how much did you profit this month?" or "when do you expect to reach break even?" These are the type of questions serious business owners ask, and they are the type of questions new IBOs in particular don’t tend to ask or get asked. It needs to start – now.

While the DTI/BERR vs Amway case is obviously stressful for all involved, I believe it has provided a much needed wake-up call for our business, and once behind us it will ultimately make this business bigger and better than ever – especially in the United Kingdom & Ireland! The development of the dedicated BSM companies are I believe one of the reasons why Amway is so hugely successful around the world. If they too look at their operations and consider transformation as Amway is doing, then we truly can take this business to another new level of professionalism and a new level of success.

The future is bright.


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