Best World

[Millionfaith]

I have been thinking about Best World's operational legitimacy for several weeks since my first post on Best World, and reached a conclusion about couple of weeks back.

In my opinion, the crux of the "illegal" operation lies in whether Best World is an ethical company.

First, we need to understand why the government is against pyramid schemes (whether multi-level or single-level commission), and why the public have a negative stigma towards MLM companies (me included, which is why I missed the boat). For a better understanding, go watch the movie documentary - Betting on Zero, Starring Bill Ackman and Herbalife.

This is because most MLM companies focus on recruitment rather than sales and quality of the product itself (key risk of MLMs). By doing so, it harms the consumers and the majority of the distributors, benefiting the very few at the top of the pyramid. This is why the Chinese government are starting to crack down those MLM companies for the next 3 months. If Best World actions are beneficial to people, then I believe there is indeed no reason for the Chinese government to shut down Best World's operations in China (unless the Chinese government are rigid and follow the rules literally). Single-level or multi-level commission really shouldn't be the focus, because that is not the primary driver of the Chinese government at the first place.
I think Value Explorer81 and Best World explained this quite well too.

That being said, whether Best World is focused on recruitment or product, I don't know. But I believe scuttlebutt approach is the best way to assure a Best World investor - by pretending to be an interested client and/or distributor. These being said, I guess we will know by end 2017.

Nonetheless, this incident could possibly result in negative sentiments in China, for both product sales and distributor recruitment by MLM companies. We can see that this was the reason that Best World gave for declining sales in Taiwan for 1Q 2017.

Another area of concern would be slowing Taiwan sales. We can see that while direct selling sales can be explosive and ramp up beyond imagination; declining sales can also be drastic as well (TW: 2Q 2017 by -34.1%, 1Q 2017 by -7.6%). Why did Best World not at least maintain Taiwan sales? If Best World's products are really good and competitive, negative MLM perception shouldn't have that great an impact. Economy, competitor's products or execution are more likely reasons.

Not vested in Best World.

In my opinion, besides whether the company is ethical or not, how the IBOs conduct their business is what I am most concern with. Having said that, I saw how some IBOs (from Amway) who are driven by success and money, changed the company rules and regulation. For eg, joining "A" is less than $50, and there is no attached rules that you must buy any products (in fact, in "A", you can return and get back the joining fees within 12 months). However, I heard of cases where joining a particular group within "A" is a few thousands. This is because it will come with the full range of product. Their reasoning is one need to have the full product range to experience before one can even promote. And hence that particular team will immediately made a few thousands sales when someone is recruited. I am not sure if BW IBOs did something similar? I am not familiar with BW marketing plan, cant comment further.

As for why sales can be drastic, of course, besides the reason that the consumer no longer demand for it, in my opinion, also depend on the promotions the company did at particular time. Additionally, closing deadline of certain incentives. I remembered seeing IBOs buying up, and encouraging their downlines to buy up in order for themselves or uplines to get the incentive trip. A bit similar to insurance industry if I am not wrong. In short, this industry, to some extent, is dealing with certain emotional of a being, and unfortunately can be manipulated.

Investing in a DS business carries high risk, period.