Important FTC Disclosure Requirements for Direct Sellers

FTC Disclosure Requirements copyThe Federal Trade Commission (FTC) has required anyone endorsing a product who will benefit from its sale to disclose that up front since 2010. For those in direct sales or network marketing, that means that you must make sure people understand that you sell your product line when you’re talking about how great it is, particularly online. But the FTC has not necessarily been militant about enforcing this. Recent clarification by the FTC, however, indicates that this may be about to change when it comes to enforcement.

This article from Marketing Land is a great overview of the requirements. If you haven’t read it yet, go do that now. I’ll wait.

So how does this affect you as a direct seller?

  • When talking about the benefits of any product that you sell or your business opportunity, it is always better to include a note that you sell it. This could be as simple as “Contact me to order,” or a hashtag such as #ad. The recent clarification by the FTC says that naming your company on your Facebook Page alone is not enough.
  • If you write a blog, or work with a blogger to have them do a product review, it’s essential to disclose whether that product was given for free, or you will benefit from its sale. This is an FTC requirement, because it helps the reader decide how much weight to give to the review based on benefits the blogger may have received to write it.
  • If you run contests that require entrants to make a positive social media post for an entry, require that a hashtag such as #brandcontest is included in the post, so that people understand that the post is not a pure endorsement, but an entry to a contest.
  • If you create videos, make sure that a disclosure is included in the video itself, and not just on the details page of YouTube. That way the disclosure travels with the video no matter where it’s viewed. In fact, the FTC wants you to put that disclosure up front, so start with a splash screen that includes your name and title with your company, or make a statement at the very beginning that you sell the product or promote the business opportunity.
  • Lots of you love your Before/After photos. These can be problematic, as I have written before. Here’s what the FTC says about them:

    Another principle in the Guides applies to ads that feature endorsements from people who achieved exceptional, or even above average, results. An example is an endorser who says she lost 20 pounds in two months using the advertised product. If the advertiser doesn’t have proof that the endorser’s experience represents what people will generally achieve using the product as described in the ad (for example, by just taking a pill daily for two months), then an ad featuring that endorser must make clear to the audience what the generally expected results are.

You can read the entire list of clarifications from the FTC here.

The important thing to remember about all of this is that you MUST disclose your relationship with your company when you talk about it online. Every time. This protects consumers who may make purchasing or joining decisions based on your favorable review. The FTC is very clear. To stay within the law, disclose. Every time.

How do you disclose your relationship to your company when posting in social media? What tips do you have? Please share in the comments!

Technology as a Competitive Advantage

Jennifer Fong and Brett Duncan presenting about technology direct sales companies need today at the 2015 DSA Annual Meeting

Jennifer Fong and Brett Duncan presenting about technology direct sales companies need today at the 2015 DSA Annual Meeting

A few weeks ago I attended the Direct Selling Association’s Annual Meeting in San Antonio. While there were many great topics discussed there about our industry, one of the topics that really stood out to me is how many companies are really using technology as a competitive advantage. The direct sales companies that are offering better technology are making it possible for their sales consultants to reach more people, sell more product and ultimately make more money.

Technology has evolved so much for our industry in the last few years. Some of my favorites are platforms that enable transactions (sales) within Facebook Parties, that provide a library of approved, compliant content for consultants to share on social media from a mobile device, that prompt consultants on next actions to take to build business and work their contact list, mobile transactional catalogs, and so much more.

There is a lot of GREAT technology out there, and smart technology vendors are making sure that their platforms integrate well with other platforms, enabling companies to create great solutions for the salesforce. No one technology company is necessarily going to be great at everything, so integration ability is key. In fact, I advise my clients that, if a technology platform they are considering doesn’t offer the open APIs to integrate, they should keep looking. Integration is that important.

Now, sure, technology systems can be expensive for companies. If you are with a smaller company, they may not be able to yet afford all the bells and whistles that a larger company can. But every company should have technology on its growth roadmap. The more that you can empower and enable your salesforce, the more you give yourself a competitive advantage. Our industry has changed dramatically. It is the companies that invest in technology that will be setting themselves up for long term success.

What technology does your company provide that helps you grow your business? What would you like to see? Please share in the comments!

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