When using social media to promote a business (aka social selling), there are certain rules of engagement that apply. Technically, these rules apply to everyone using social media, but only people who make money from their social media activities are at risk of getting sued. You may think this isn’t you because you don’t create anything yourself, but if you’re a public figure or making money of any kind in a non-traditional way, you might want to double-check. If the answer to ANY of these questions is yes, you need to keep reading.
- Are you part of an MLM or network marketing company that connects with customers + potential team members through social? This includes Scensy, LipSense, R+F, It Works!, Mary Kay, Stella & Dot, Beachbody, Young Living, Monat, Avon, and more.
- Are you an ambassador for a product/service of any kind?
- Have you received free products to try through services like Influenster or by brands directly?
- Do you have a blog that brings is any kind of revenue (that $3.46 in ad click totally counts)?
- Are you a notable public figure who makes money through connections/appearances?
- Do you have an Etsy shop or some other platform for selling your products/services?
- Are you a public face of any brand or business?
- Are you a journalist or content creator?
You need to keep reading if you answered yes to any of these questions because you’re involved in social selling. While you are probably a small fish who will never see the inside of a courtroom or even a complaint, you don’t want to risk your hard-earned money because of an FTC smackdown or copyright infringement suit.
It’s all about disclosure.
There are two BIG mistakes I see people who use social selling make. The first, and most dangerous, is how they use images + creator disclosures. Many of the women I follow who sell through social media have gorgeous feeds. Their share beautiful product shots + show off the lifestyle selling these products affords them in a genuine way. It is feasible to think that many of them share + cross promote images by other team members. And as long as they have permission to do so, that’s fine. The issue arises when they share content + do not give credit to its originator.
This is where copyright laws come into play. You have to give credit for any images that are not owned (created or purchased) by you. Of course, it is possible that the original source of the work gave them permission to share without credit, but those instances are few + far between. Some free stock photo or element sites even require special permits to be attributed if it is for commercial use. If you make money (i.e. said yes to one of the questions above) you post as a commercial brand. Tomi Lahren didn’t fool anyone with her “personal Instagram” comment + neither will you. So, if you see a cute Instagram post or Pinterest image, ask the owner permission to repost or at the VERY least, credit the creator.
The best way to avoid trouble is to credit the owner + have their permission to use their images. It’s as simple as sending them a message – it doesn’t have to be some huge legal form. Take a look at how I asked my friend Kaitlyn for use of one of her images for this post! Credit is a little different for a blog than social, but if you look at the bottom right of the image you’ll see her Instagram handle. In other posts, you’ll see me add it as a caption. Get more detailed information here. Also, know that copyright holders can ask platforms to take down their material as long as they have enough proof of ownership.
Endorsements + Free Stuff
The other big issue I see social sellers making is a lack of sponsorship disclosure. If you receive a product for free or receive any form of compensation from a brand to promote their product, you are legally obligated to share that. The FTC has been cracking down on this lately. If you’re just sharing a product you love, you do not need to disclose any relationship with them because there isn’t one.
Currently, the FTC is okay with the use of #ad + #sponsored hashtags as a means of communicating to the public that you are getting paid for that content. These two are the only ones given the all clear so say goodbye to #sp, #spon, #partner, etc. “Thanks to” can be a grey area if the relationship isn’t made crystal clear it’s social selling. Instagram is actually making it easier for influencers + brands by allowing you to designate sponsorship at the top of your post.
What are the risks?
The reason assigning credit matters for images is copyright laws. Legally, whoever owns that image has the right to any revenue it generates. So they could take you to court + claim that use of their image entitles them to part of your revenue. Say you sell jamberry + you shared a picture they posted of their manicure. Any money that came from their post, legally belongs to them. So if 4 people commented on that post + bought from you, that money goes to the image creator. Say you’re an influencer whose lifestyle is really their brand. One could argue that if you made $10,000 in February + their post was one of 12 you posted, they’re entitled to $833 of your profit.
If you aren’t properly disclosing business relationships, the FTC can + will come after you. The first thing they will do is send you a warning letter + let you know what you are in violation of + even which posts are causing the issues. If you don’t heed their warnings, they can fine you. They can fine you up to $16,000 PER violation. You can bet the company you worked with will not be footing that bill. Do what you can to stay on the FTC’s good side by following their guidelines as detailed by Adweek. Social media sites may also remove your content if it is in violation of any of their terms of service when it comes to disclosing partnerships. These FAQs from the FTC can help you better understand what you need to do.
Network marketing, MLMs, and other social selling arrangements can be a great way to earn extra money (sometimes even an entire income) + make friendships that will last for years to come. Don’t spoil that experience by getting put in social media jail or taken to court by the FTC.