DIRECT SELLING/DIRECT SALES consultant practice tips. DIRECT SELLING/DIRECT SALES Raiding issues are a continuous challenge for DIRECT SELLING/DIRECT SALES Companies.   Many problems may be avoided by appropriate DIRECT SELLING/DIRECT SALES Legal language in DIRECT SELLING/DIRECT SALES distributor agreements and DIRECT SELLING/DIRECT SALES Policies. Guidelines for activity during the DIRECT SELLING/DIRECT SALES distributorship and after the DIRECT SELLING/DIRECT SALES distributorship are imperative.   DIRECT SELLING/DIRECT SALES Legal and DIRECT SELLING/MLMLegal.com and Babener and Associates provides expert DIRECT SELLING/DIRECT SALES Consultant and DIRECT SELLING/DIRECT SALES Consulting advise on DIRECT SELLING/DIRECT SALES corporate, DIRECT SELLING/DIRECT SALES software, DIRECT SELLING/DIRECT SALES Compensation, DIRECT SELLING/DIRECT SALES Taxes, etc. DIRECT SELLING/DIRECT SALES Consulting is an important component for DIRECT SELLING/DIRECT SALES startup.  Careful Choice of DIRECT SELLING/DIRECT SALES Software is another component of DIRECT SELLING/DIRECT SALES Corporate.  An DIRECT SELLING/DIRECT SALES Consultant and DIRECT SELLING/DIRECT SALES Law and DIRECT SELLING/DIRECT SALES Legal is part of the DIRECT SELLING/DIRECT SALES Startup Team.  DIRECT SELLING/DIRECT SALES Compensation must be reviewed by an DIRECT SELLING/DIRECT SALES Consulting standpoint by an DIRECT SELLING/DIRECT SALES Consultant and DIRECT SELLING/DIRECT SALES Legal and DIRECT SELLING/DIRECT SALES Law professional and programmed by a DIRECT SELLING/DIRECT SALES Software and DIRECT SELLING/DIRECT SALES Technology provider.

SECTION 6:   Network Marketing and the Law
By Jeffrey A. Babener
Excerpted from Network Marketing: What You Should Know, Jeffrey Babener, Legaline Publications
MLM consultant practice tips. An experienced MLM Legal Expert and MLM Law Advisor may become the most important part of an MLM Corporate team.   This person has experienced almost every MLM Business and Legal Issue and will likely provide experienced MLM Insight and guidance on MLM Business and MLM Law Related issues.    MLM Legal and MLMLegal.com and Babener and Associates provides expert MLM Consultant and MLM Consulting advise on MLM corporate, MLM software, MLM Compensation, MLM Taxes, etc. MLM Consulting is an important component for MLM startup.  Careful Choice of MLM Software is another component of MLM Corporate.  An MLM Consultant and MLM Law and MLM Legal is part of the MLM Startup Team.  MLM Compensation must be reviewed by an MLM Consulting standpoint by an MLM Consultant and MLM Legal and MLM Law professional and programmed by a MLM Software and MLM Technology provider.

Personal Use - The Once and Future Issue.

There has always been tension between the direct selling industry and the regulatory community as to the role of   "personal use" of products and services by distributors of network marketing companies. The broad and ambiguous language in pyramid legislation has contributed to the problem. Pyramid statutes have always prohibited the payment of commissions in a multilevel program unless based upon the "sale goods or services." "To whom" must those goods or services be sold in order to avoid being a pyramid? This is a difficult question.

Almost all major direct selling companies have defined a "retail sale' to include sales to nondistributors, as well as sales to distributors for actual use or consumption. Many regulatory officials, however, have maintained that the "mark of legitimacy" is to be found in the program where the primary sales revenue comes from sales to nondistributors.

As a theoretical goal, the regulatory position is admirable. The fact is that personal use in the direct selling community has been a major factor in sales revenue for many companies from their inception.

For many years after the 1979 Amway decision, a "live and let live attitude" prevailed between the industry and regulatory community. Although periodic legal skirmishes occurred, the industry and regulatory community appeared to be content to "agree to disagree," and instead the focus on legal investigation was upon inventory loading, cash pyramids, phony products and earnings hype.

The comments of a federal appeals court in 1996 class action case involving a company called Omnitrition invigorated the debate. In that decision, which involved an interim ruling in the case, the federal appeals court questioned whether or not a network marketing company could be viewed as legitimate if its sales were not derived from nonparticipant customers. The language in the decision was much criticized by the industry and the Direct Selling Association, in fact, filed an amicus brief requesting the court to reconsider its reasoning. The DSA amicus brief cited the importance of personal use in direct selling marketing programs. However, the decision stood.

In the aftermath of the decision, both state and federal regulatory agencies were emboldened to sue or obtain consent decrees against network marketing companies which contain very restrictive requirements regarding recognition of personal use by distributors. State agencies were all over the board on their position. Some demanded 50 percent sales to nondistributors. Some demanded 70 percent sales to nondistributors. Some demanded 80 percent to nondistributors. Even the Federal Trade Commission awakened after 20 years of dormancy and demanded that more than 50 percent of sales be to nondistributors in various consent decrees.

The aggressiveness of government activity was alarming to the industry. The industry quickly marshaled forces and, in short order, at least four state adopted legislation specifically recognizing personal use as a legitimate end destination for products. Other states were likewise targeted for such legislation and the industry was of the belief that a trend would be started that ultimately would be recognized by all state and federal regulatory agencies. So strongly did the industry feel about it, that its leading trade association, the Direct Selling Association, undertook consideration of a formal amendment to its ethics code which would recognize that, for purposes of a pyramid analysis, a retail sale would include sales to nonparticipants, as well as sales to participants for actual use or consumption.

Notwithstanding the ongoing debate on "personal use" the industry seems to thrive in almost all states. There is no question, however, that the "personal use:" issues is a thorny issue and one issue upon which the industry and regulatory community must carry on an earnest ongoing dialog to reach a consensus that protects consumers, distributors and network marketing companies.

NETWORK MARKETING/MLM consultant practice tips. Every NETWORK MARKETING/MLM company should establish an NETWORK MARKETING/MLM distributor relations and NETWORK MARKETING/MLM compliance department.   Success in the NETWORK MARKETING/MLM field is dependent on continuous NETWORK MARKETING/MLM Support and NETWORK MARKETING/MLM Communications relationship that demonstrates ongoing support in NETWORK MARKETING/MLM Marketing issues and is clear on guidelines for compliance with NETWORK MARKETING/MLM Business and NETWORK MARKETING/MLM Law issues. NETWORK MARKETING/MLM Legal and NETWORK MARKETING/MLMLegal.com and Babener and Associates provides expert NETWORK MARKETING/MLM Consultant and NETWORK MARKETING/MLM Consulting advise on NETWORK MARKETING/MLM corporate, NETWORK MARKETING/MLM software, NETWORK MARKETING/MLM Compensation, NETWORK MARKETING/MLM Taxes, etc. NETWORK MARKETING/MLM Consulting is an important component for NETWORK MARKETING/MLM startup.  Careful Choice of NETWORK MARKETING/MLM Software is another component of NETWORK MARKETING/MLM Corporate.  An NETWORK MARKETING/MLM Consultant and NETWORK MARKETING/MLM Law and NETWORK MARKETING/MLM Legal is part of the NETWORK MARKETING/MLM Startup Team.  NETWORK MARKETING/MLM Compensation must be reviewed by an NETWORK MARKETING/MLM Consulting standpoint by an NETWORK MARKETING/MLM Consultant and NETWORK MARKETING/MLM Legal and NETWORK MARKETING/MLM Law professional and programmed by a NETWORK MARKETING/MLM Software and NETWORK MARKETING/MLM Technology provider.