U.K. - Crossroads America to Europe

By Jeffrey A. Babener
?May 1997

Hopscotch

It's a bit like a hopscotch game. For American network marketing companies, it's one big leap to U.K., and a short hop into the European market. For European companies, it's just the opposite. The American-European connection is part of a long-term growth trend for the network marketing industry worldwide. Global sales now approach $80 billion with more than 20 million networkers involved.

For American network marketing companies, it's one big leap to U.K., and a short hop into the European market. For European companies, it's just the opposite.
Although much deserved recognition has been paid to the phenomenal growth of network marketing companies, such as Amway and NuSkin in Japan in Asian markets, both the maturing of the European Economic Community and the opening of eastern Europe have meant an increasing migration back and forth across the Atlantic as well. Even major Japanese direct selling companies, such as Nikken, are coming almost full circle around the world, having expanded to U.K., Holland, Germany, Spain, Portugal and Italy.

Destination Heathrow.

A crossroads point for the cross-Atlantic migration is London. Like Japan-based companies, many U.S. companies find London a convenient European headquarters. There are many good reasons.

Like it or not the world's common business language in Tokyo, Los Angeles, Tel Aviv or Bombay is English. Those establishing a beachhead in Europe find that locating in U.K. eases the issue of the language barrier. Along with Holland, legal and tax experts have often chosen the U.K. for the site of the European umbrella holding company for network marketing operations in Europe. Like it or not the world's common business language in Tokyo, Los Angeles, Tel Aviv or Bombay is English.

Of significant note is the fact that the direct selling industry is well-established in the U.K. and has developed an infrastructure to service European operations. The U.K.-DSA, under the long-time leadership of Richard Berry, is recognized in the industry worldwide as one of the best run and best informed DSAs of any country in the world. It publishes voluminous informational materials and data and keeps its members very up-to-date on worldwide trends. Major support organizations, such as Jenkon International, a leading supplier of technology services, have major headquarters based in U.K. It is easy to find accounting and international tax expertise on direct selling at U.K. headquarters of most of the international accounting leaders, such as KMPG or Price Waterhouse. Even in the legal arena, sub-specialties in network marketing have found there way at such leading London law firms as Lawrence Graham who work with their international counterparts on U.K. and European structuring.

U.K.-DSA has developed a close working relationship with U.K. government regarding ongoing amendments to various trading schemes acts that regulate the actions of network marketers. In fact, very few trade associations have exhibited such a close working relationship with regulatory agencies. And favorable U.K. legislation is bound to have an impact on the emerging legislation in the European community.

Thus, with a well-established infrastructure, U.K. is a good pivot point for cross-Atlantic movement. While well-established North American companies, such as Amway, Avon, Mary Kay, Herbalife and Tupperware, are all present, in the other direction, such companies as Dorling Kindersley and Cabuchon, U.K. businesses, are making their way into the North American market while at the same time looking to the European market.

The Numbers Are Good.

And what about the numbers in the U.K. itself. Although, not setting the world on fire, the statistics in the U.K. indicate that it is past a threshold point for maturity. Information surveyed by the U.K.-DSA in its 1996 survey indicates sales more than doubling from 1986 ?56 million to 1995 ?67 million. This survey indicates over 400,000 individuals operating as direct sellers with the vast majority, over 96%, as part time. The breakdown of product lines are personal, 40%; food, 8%; household, 30% and family-type products, 22%; with about 19% party plan and 82% person-to-person marketing. The breakdowns in the U.K. are surprisingly parallel to the look of direct selling worldwide.

And So ...

And so if your destination is Heathrow, in or out, you will probably be in good company.

Jeffrey A. Babener
Babener & Associates
121 SW Morrison, Suite 1020
Portland, OR 97204
Jeffrey A. Babener, the principal attorney in the Portland, Oregon law firm of Babener & Associates, represents many of the leading direct selling companies in the United States and abroad.

www.mlmlegal.com

Main Library || MLM Legal || Babener & Associates || MLM Articles || Power Index