| Comment Number: | 522418-11803 |
| Received: | 7/17/2006 3:28:27 PM |
| Organization: | Xango |
| Commenter: | JIm Coker |
| State: | CO |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Monday, July 17, 2006 FTC, Office of Secretary, Room H-135 (Annex W) 600 Pennsylvania Ave NW Washington, DC 20580 RE: Business Opportunity Rule R511993 To Whom It May Concern: I am writing this letter because I have some justified concern about the proposed Business Opportunity Rule R511993. I believe that in its presented form, it would seriously handicap the small home-based business I operate. It would effectively slow to a crawl the small business I have worked so hard to build up. Since I set up others as distributors in this business in turn, this proposed rule would also impact the businesses of those 672 others that I have on my team. I have been operating this home-based business since April of 2003. I am an independent Contractor representing XanGo™ LLC,. I contracted to operate this business because I found first-hand that this product works well with a wide variety of health issues. My mother, who is 76 now, began taking this product as a supplement – in a few months her health has benefited in several ways. I figured that if this XanGo™ product worked so well, that I might help others with health issues by sharing this product and build a small business from it. I make no specific claims about the effectiveness of this product, and per policy, neither does the company XanGo™. Many of the people I have introduced XanGo™ to are in turn now operating their own small businesses on a part-time basis. I am working this direct sales business on a full-time basis myself. I was released from a company I worked for through downsizing; now my small distribution business is my only source of income. The monthly gross revenue (not my income) generated from my distribution business exceeds $40,000 per month now. At my age, 56, it has proven difficult to get paid what I am worth in today’s job market so my small business has certainly been a Godsend to me. And of course, small business is the backbone of America. Some of the sections in the proposed rule (Rule 511993) would make it difficult at best for me to sell the XanGo™ product with these additional requirements. Indeed, they are redundant, given the fact that our company already protects both the consumer AND the distributor in several ways with written policies. The proposed Rule 511993 would make it especially cumbersome, to introduce others to this small business opportunity under the proposed rule additions. Changing to the NEW rules would handicap the growth and profit potential of the business I operate and depend upon. For example; the proposed waiting period will give the public a perception that there is “something wrong” with me or the XanGo™ business plan -- which in turn, might imply -- as it would with ANY business -- that there may be something not to be trusted; either the person providing the product or the product itself. Nothing could be further from the truth. To have a 7-day waiting period is an unnecessary move: XanGo™ already has a 100% written total money back guarantee, which applies to any new distributor and their initial order of product. Additionally, there is a 90% buyback policy for all products including sales kits purchased by a salesperson even after the 30-day initial period. This written guarantee is currently in place for ALL new distributors covering their initial order from XanGo™ with a 100% money-back policy if the company is notified in the first 30 days. These procedures in place as written policy by XanGo™ insure that no one can ever be hurt financially by the XanGo™ business opportunity… as well as to lend a solid level of consumer confidence in purchasing this product. One cannot return a prescription drug product to their pharmacy if they don’t “feel” it has helped them – however, with our product, a consumer can! One of the most difficult sections of the proposed Business Opportunity Rule R511993 is the 7-day waiting period to enroll a new distributor. The procedures associated with the proposed rule change would make it, literally, extremely difficult to build and operate my business efficiently. This change would put on hold the initial profit for 7 business days… actually make operating a XanGo™ business less profitable with unnecessary redundant provisions than it currently is under the already existing rules and procedures. The XanGo™ sales kit only costs $35 – even less than the cost of joining a discount club like COSTCO. Consumers can purchase TVs, cars, and other items that cost much more than that -- and they don’t have 7-day wait periods. Under the proposed waiting period requirement, I would also need to keep detailed records even of when I first speak to a prospect -- plus I would then have to send in reports to my company. XanGo™ distributors operate small home businesses, and this burden could effectively discourage them completely by requiring excessive paperwork. Since many distributors are part-time or for example are stay-at-home mothers, most individuals operating this sort of business are not accustomed to keeping detailed business records. This requirement would force an ordinary person just seeking to get ahead into being a burdened-down record-keeper and take away the simplicity of operating a home-based business when they are simply trying to just “get ahead”. With these new proposed rules, the XanGo™ opportunity would be cumbersome and complicated for the average person. It would require one to be record-focused instead of distribution focused. The whole purpose of our business model is to help a lot of people with our health product and thereby generate additional part time or even full time income. Additionally, the proposed rule requires the disclosure of a minimum of 10 prior purchasers nearest to the prospective purchaser. Since my distributors are sometimes widely separated geographically, sometimes in different states, this would prove virtually impossible. I have distributors in many states across the U.S. and also in the UK and Belgium. I am not diametrically opposed to providing some references. However, in this day of identity theft, I am not comfortable giving out personal information of individuals (without their approval) to strangers. Women distributors in my organization always should have their identity protected – because they actually could become subject to sexual or racial harassment. With this consideration, there may have to be an addendum to this rule prohibiting sexual or racial discrimination related to this disclosure -- or it could open up a “Pandora’s Box” of problems -- for women in particular. In the end, this rule could even bind the FTC to get involved with enforcement actions on such matters, which is an administrative nightmare of course. Also, requiring the sharing of names and addresses of existing distributors with a “prospect” could open any business to being unfairly attacked by other competitive products and/or businesses. A person from another sales organization who wished to proselytize an existing organization or attempt to steal away distributors would literally be given almost an invitation. This is not a principle of fairness in American business; corporations protect themselves from “corporate spying” with good reason. Would any person in his/her right mind with business at stake feel comfortable sharing existing contacts and/or customers with their competition? This is not in the best interest of small business -- or medium to large business in America. Every day in any email inbox, you can see many scams on the Internet. Also, many opportunists have personally approached me who are really out to take advantage of the average small business entrepreneur. The proposed rule R511993 will do nothing to stop these unscrupulous crooks. They actually hurt a legitimate business like mine. This rule will not stop crooks and opportunists – they violate the current rule all the time. I am a proud American citizen contributing to the American economy – yet, this proposed rule R511993 would hurt me, and all small business in America. Please help me retain my right to operate my legitimate small business. Our company, XanGo™ LLC, already has procedures in place to protect both consumers and distributors from loss of money, loss of time, and loss of their credibility. XanGo™ is contributing hundreds of millions of dollars to the U.S. economy. XanGo™ is also a company with high Integrity. Please do not lump quality companies like XanGo™ into the same category as those who take advantage of others. Non-legitimate opportunists should rightly be held accountable if there are no protections in place for the consumer. The Direct Selling Industry, a Multi Billion Dollar industry today -- contributing an incredible volume of consumer dollars to the American economy. The Direct Selling Association has many provisions in place to establish consistency and protection for the American consumer and small business in America. Our company proudly maintains a seat on the board of this association for the precise reason of overseeing quality and integrity in business. The company XanGo™ LLC is headquartered in Utah and is open to the public – anyone can visit and participate in a corporate tour to see what kind of quality executives run it and the quality that goes into our product. Anyone will readily see a company, which has the hearts of American consumers at interest. Thank you for your keen interest in doing the right thing for the right reasons. Most respectfully, Jim Coker