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Network Marketing VS. Pyramid Selling

The terms “network marketing” and direct selling are frequently used and often misinterpreted by many people. The most common misconception is the comparison of network marketing to illegal sales methods such as “pyramid selling”.

Network Marketing

Network marketing (also referred to as multi-level marketing) is a sales model where products and services are marketed to end consumers through a network of independent direct sellers. These independent direct sellers receive compensation from their own sales of products or services to customers, and from the sales to customers generated by their network of other independent direct sellers, but always based on the sale of products and/or services to consumers rather than simply expanding the network of independent direct sellers.

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Pyramid Selling

A pyramid selling scheme is any business where the primary form of compensation is derived from the fees that others pay to join the business, rather than from the sale of products or services to end consumers.  These schemes are illegal and alongside “pyramid selling” these schemes have also been described as ‘chain letters’, ‘snow ball schemes’,  ‘chain selling’, ‘money games’ and ‘investment lotteries’.

It is important to remember that legitimate network marketing rewards independent direct sellers for the distribution and sale of products and/or services to customers. No money is earned merely by sponsoring additional independent direct sellers into the distributorship.

Thus, network marketing offers independent direct sellers the opportunity to build independent businesses marketing, promoting and selling products and/or services to customers and to train an organisation, or network, of other independent direct sellers to do the same.

Without intending to be exhaustive about these matters, below are some key questions for you to consider to differentiate a legitimate network marketing company from a pyramid selling scheme.

What is the company’s primary source of income?          

If the revenue of the company is derived primarily from the contributions made by the independent direct sellers, and there is no genuine economic activity, the company is typically considered to be a pyramid selling scheme.  If, on the contrary, the company’s income derives primarily from the sales of products or services, then the company is likely to be regarded as a legitimate network marketing business.

ACN’s business is to provide fixed and mobile telecommunications and Internet services to customers and it is the sale of these services that constitutes ACN’s primary revenue source – well over 90% of revenues on a consolidated European basis.

How are the company’s independent direct sellers remunerated?         

If the company’s independent direct sellers are remunerated for the mere fact of sponsoring new people to join the company as sales persons, this is a clear signal that the company is involved in a pyramid selling scheme. Such compensation may not always be obvious and may be described as training fees, etc.  If, however, independent direct sellers are remunerated on the basis of the sales of products and/or services to an end consumer, this typically indicates a legitimate network marketing business.

At ACN, compensation paid to its Independent Representatives is always based on the sale and usage of ACN’s services by customers.

ACN compensates its Independent Representatives in two ways:

  • ACN pays a commission percentage on the usage of ACN’s services calculated based upon combined monthly bills of the Independent Representative’s personal customers and a residual commission on the combined customer billings of all other Independent Representatives in the Independent Representative’s distributorship;
  • ACN offers a bonus when an Independent  Representative sells ACN’s services to a minimum number of personal customers in the first 30 days of joining ACN and also when an Independent Representative assists a newly sponsored Independent Representative to “qualify”, meaning to sell ACN’s services to a minimum number of customers in the first 30 days.

ACN Independent Representatives do not get paid simply for sponsorship of other Independent Representatives into the distributorship. If no customers are obtained as required by the ACN Compensation Plan, then no remuneration is paid.

To find out more information in relation to the characteristics of a network marketing (or multi-level marketing) business and how it differs from a pyramid selling schemes, please visit the relevant part of the website of the Direct Selling Associations, such as the website located at http://www.dsa.org/selling/pyramid.htm or more generally at http://www.dsa.org.

Please note that the legal tests for the prohibition on pyramid selling (or similarly described schemes) are not yet the same across all European countries and there are still differing specific legal tests in each country. It is hoped that the legal tests for such prohibition would be harmonised and made consistent across the European Union by the adoption of the Unfair Commercial Practices Directive which is currently being implemented in the local law and regulation of each EU Member State, but this remains to be seen.  Until that time, the statements made above in relation to the description of pyramid selling schemes as against network marketing are generally stated principles, and there may be specific other factors at an individual country level that would need to be taken into account in looking at these issues in detail.

Highlights from the Lisbon International Training Event

From the stage at the Lisbon International Training Event, ACN President and Co-Founder, Mr. Greg Provenzano, proclaimed: “The next phase of ACN will far exceed anything that we’ve already accomplished”. This was evident throughout the three memorable days of impactful training, inspiring recognition and the incredible guest speakers at ACN’s last International Event of 2016.

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TRAINING & GUEST SPEAKERS

ACN welcomed three special guest speakers, all of whom had a unique insight on how to make the most of the ACN Opportunity. The first guest speaker was Mr. Peter Lamas on Saturday morning, who shared his incredible story as well as talked about his product philosophy for the Aluminé range. He was followed by James Adlam who mesmerised the audience with a powerful and impactful performance. Then, on Sunday morning, the legendary Mr. George Zalucki gave a special presentation that inspired the crowd. Alongside these guest speakers, many top Senior Vice Presidents and Regional Vice Presidents delivered key trainings.

ANNOUNCEMENTS

Compensation Plan
ACN Co-Founder, Mike Cupisz, announced some exciting enhancements to the Compensation Plan for November 1st. This includes a new qualification system, a new way to earn commissions on products and services, and a transition plan leading up to November 1. More details coming soon via an ACN in Action, to ensure your business is prepared to capitalise on the forthcoming enhancements!

Marketing Material
Sleek new Aluminé and Benevita glossy brochures were introduced in multiple languages and available to purchase at the onsite Opportunity Shop in Lisbon. We also unveiled the latest edition of Momentum magazine in English, French and Spanish. This 80 page glossy magazine is a great piquing tool which combines the best of print with the best in digital. They will also be available to order online in the coming weeks!

Benevita® Competition
There will be a Benevita competition taking place during the month of October, with 21 prizes to give away in total with the top IBO in each country as well as the top 3 in Europe guaranteed to win prizes. Full details will be communicated in an ACN in Action later this week.

Services
We are getting set to launch a new energy partnership in Spain next week with Aldro Energia, plus there will be a number of enhancements made to JOi mobile in the UK and France starting October 1. In the Netherlands, we will be reducing the price for the first 3 months for all new ACN Internet and Phone with KPN Interactive TV customers, starting September 29. For details about these service enhancements, keep your eyes open for the dedicated ACN in Actions going out later this week.

RECOGNITION

Congratulations to our two new Regional Vice Presidents, who received their promotions on stage in Lisbon: James Sellu and Jerome Lancaster from the United Kingdom.

GIVING BACK TO THE COMMUNITY

Ronald McDonald House Charities
ACN and the Co-Founders believe in always giving back to the communities they visit. On Friday, Mike Cupisz welcomed Margarida Oliveira Martins, Executive Director for Ronald McDonald House Charities in Portugal, to the stage to present to the audience. During the event, people contributed to the charity and the total amount of donations was matched euro for euro by the Co-Founders. On Sunday afternoon, the Co-Founders presented a cheque for the amount of €13,876.96 to João Sá Nogueira of RMHC.

THE NEXT EVENT

International events are the best way to grow your business and present the ACN Opportunity in the most compelling environment you can find. They also give attendees a clear understanding of ACN’s vision today and for the future. Be sure to pre-register today for the ACN International Convention to be held in Rotterdam, Netherlands, from 24-26th February, 2017. You can also pre-register on a mobile device via www.acnreg.eu.

See you in Rotterdam!

Highlights from the Rotterdam International Convention

From the stage at the Rotterdam International Convention, ACN President and Co-Founder, Greg Provenzano, proclaimed: “Now is the time to position yourself ahead of the greatest growth this company has ever experienced!” This set the tone for three memorable days of impactful training, inspiring recognition and the incredible guest speakers at the Rotterdam International Convention.

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Click here to visit the ACN Facebook page where you can find photos of the event.
This will enable you to share the photos you like and tag yourself and your friends.

TRAINING & GUEST SPEAKERS

ACN welcomed three special guest speakers, all of whom had a unique insight on how to make the most of the ACN Opportunity. The first guest speaker was Peter Lamas on Saturday morning, he was interviewed by Greg Provenzano and shared his incredible story as well as talked about his product philosophy for the Aluminé range. He was followed by James Adlam who captivated the audience with a powerful and impactful performance. Then, on Sunday morning, the legendary George Zalucki gave a special presentation that inspired the crowd. Alongside these guest speakers, many top Senior Vice Presidents and Regional Vice Presidents delivered key trainings.

ANNOUNCEMENTS

Services
From the stage on Saturday morning, ACN Co-Founder, Mike Cupisz, cast the vision for the numerous enhancements to come in 2017 for mobile, energy and multiplay services across Europe. Stay tuned in the coming months for exciting additions to the Services portfolio which will help make the Opportunity even more attractive!

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Product
From March 6th to May 31st special gift set boxes will be available to order from the Benevita website. There will be 3 boxes to choose from, each containing handpicked products from the Aluminé® Naturals range. Look out for an ACN in Action shortly with all the details!

ACN Shake-It

RECOGNITION

Congratulations to our two new Regional Vice Presidents, who received their promotions on stage in Rotterdam: Danyal Islam from the United Kingdom, and Antonio Contrada from Italy. There were also many people promoted to the position of Regional Director.

GIVING BACK TO THE COMMUNITY

SAM Foundation
ACN and the Co-Founders believe in always giving back to the communities they visit. On Friday, Mike Cupisz welcomed Marcel Clerx, Board Member for the SAM Foundation in the Netherlands, to the stage to present to the audience. During the event, people contributed to the charity and the total amount of donations was matched euro for euro by the Co-Founders. On Sunday afternoon, the Co-Founders presented a cheque for the amount of €9659.26 to Marcel Clerx.

THE NEXT EVENT

 

International events are the best way to grow your business and present the ACN Opportunity in the most compelling environment you can find. They also give attendees a clear understanding of ACN’s vision today and for the future. Be sure to pre-register today for the ACN International Training Event to be held in Madrid, Spain, from 13-15th October, 2017, featuring guest speaker Mr. Larry Raskin. You can also pre-register on a mobile device via www.acnreg.eu\

ACN Madrid 2017

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