Neumi has told distributors that selling its products “on Amazon, eBay and Walmart violates FTC compliance”.

The extraordinary claim was made in a company-wide email Neumi sent out on September 27th.

From Neumi’s email;

Selling Neumi products on third-party platforms like Amazon, eBay, and Walmart is against company policy and violates FTC regulations.

Neumi’s reasoning?

The Federal Trade Commission (FTC) mandates that health and wellness product claims must be accurate, substantiated, and not misleading.

If you’re wondering what that second paragraph has to do with Neumi distributors selling products on third-party platforms, you’re not alone.

What’s actually happening here is Neumi is misrepresenting its own prohibitions as FTC compliance violations. Secondary is while Neumi corporate sells on Amazon, they also absolutely don’t want any competition from distributors.

This is spelled out in the rest of Neumi’s email;

When sold through unauthorized platforms, Neumi cannot guarantee product quality, authenticity, or proper representation, which could lead to false advertising or consumer harm.

In order to prevent this, Neumi Corporate set up an Amazon store as a strategy to keep unauthorized sellers from being able to undercut prices and to control those who are not authorized to use our trademarks and copyrighted materials.

Unfortunately, eBay and Walmart do not yet have policies on copyrights and trademarks that companies can use to remove unauthorized sellers on their sites.

For this reason, selling Neumi products through third-party sites is not in compliance with FTC guidelines and is strictly prohibited.

Holy misinformation batman!

First off I want to reiterate that it is absolutely not an “FTC violation” to sell Neumi’s products on Amazon or anywhere else.

This is entirely an internal Neumi prohibition that doesn’t extend outside the business. If we briefly entertain Neumi’s nonsense and accept that selling Neumi’s products on Amazon “violates FTC regulations” – how is Neumi corporate doing so?

And when was the last time the FTC went after MLM companies or their distributors/affiliates for the sole act of selling products on an ecommerce platform? I’ve been running BehindMLM since 2009 and have never seen a “they sold on Amazon” enforcement action.

In addition to not wanting competition on third-party sites from distributors (profits for me, not for thee), key to understanding Neumi’s restrictions is “Neumi cannot guarantee product quality, authenticity, or proper representation”.

The notion that Neumi is responsible for asserted counterfeit products is absurd. Were US authorities to act, the sellers of counterfeit Neumi products would be responsible. Further up the chain you’d then have the manufacturers.

This though has nothing to do with distributors or anyone else selling Neumi products on third-party websites.

As per Amazon’s “branded product” rules;

To list a registered branded product on Amazon and avoid IP complaints for trademark violations, you will need a Letter of Authorization from the brand or manufacturer that states that you may sell their products on Amazon.

If you are unable to provide a Letter of Authorization from the brand or manufacturer, you may provide a valid Manufacturer or Verified Supplier invoice to prove that you are buying directly from the manufacturer or authorized distributor.

This applies to every single branded product you intend to sell on Amazon that is enrolled in Amazon Brand Registry.

As per Amazon’s own rules, if I purchased products from the company or a distributor, provided Amazon with a receipt from Neumi, I’d be good to sell Neumi products on Amazon.

If I was a Neumi distributor the company might send me legal threats and then terminate me, but that’s again an internal Neumi issue. It has nothing to do with Amazon’s policies and it’s certainly not an FTC Act violation.

There doesn’t appear to be any restrictions on selling supplements on eBay, provided they are unopened and not expired.

Walmart Marketplace requires supplements for sale to be

either have been marketed as a dietary ingredient in the U.S. before October 15, 1994, be generally recognized as safe by FDA, been submitted to FDA as a “new dietary ingredient,” or be marketed pursuant to an approved food additive petition.

I’m not 100% sure if “be generally recognized as safe” applies to Neumi supplements. Neumi might have to make a request to the FDA to satisfy Walmart Marketplace. If that’s the case, they haven’t done so (as far as I’m aware).

Be it Amazon, eBay, Walmart Marketplace or any other ecommerce website, the pattern here is site specific requirements must be adhered to. There’s nothing in the FTC Act that prohibits the sale of Neumi products by distributors on any platform.

What we have here is an MLM company seeking to maintain a monopoly on online product sales, through the spreading of misinformation regarding FTC regulation.

Not sure if such conduct in and of itself is an FTC violation but I wouldn’t be surprised if it is.

With respect to its distributors, the moral and ethical thing for Neumi to do would be to issue another communication clarifying selling their products online isn’t an FTC regulatory violation.

Be upfront with your distributors about wanting to maintain Neumi corporate’s ecommerce sales monopoly. Sure it’s scummy but at least it’s honest.

BehindMLM reviewed Neumi back in 2022. We found Neumi’s official compensation documentation recommended distributors purchase products to qualify for commissions. The company even sold a “quarterly pack for qualification”.

This is the “autoship recruitment model”, which if used by an MLM company lends itself to operation of a pyramid scheme.

Instead of making up FTC Act violations to maintain an online sales monopoly, how about addressing the majority of Neumi sales likely being tied to distributors instead of retail customers?

Y’know, an actual FTC Act violation.