Most companies have adopted sophisticated data processing which provides detailed information on downline sales organizations.
Actually no one owns the downline. Distributors enter into an individual contract with the company. Inherent in the contract is the company’s agreement to pay overrides on the downline sales organization of the distributor. However, downlines are people and no one owns people. On the other hand, companies provide distributors with computer printouts and genealogical reports, which the companies view as proprietary and confidential. Companies do expect that distributors will not use printouts to solicit for other opportunities, or to conduct mass mailings or in any other way utilize computer printouts to compete.
The question of “rights in the downline” is one which is clearly headed for the courts within the next few years. Many MLM companies take the position that they are the sole owners of “downlines.” Many key distributors market their “downline structures” from one MLM company to another as if downline structure was a piece of property which could be marketed at will. When the “process” of multilevel, as a form of marketing is closely examined, the better argument is probably that neither of these positions is correct. Continue reading
As a consultant, what can I say about a MLM company’s nutritional/dietary supplement products?
As a general matter, MLM companies will be very specific about what distributors can and cannot say about the company’s products. Usually, this information will appear in the company’s literature. MLM companies can find themselves in serious mess with state officials, the FTC, the FDA, and other government agencies if unauthorized product claims are being made by consultants.
As a general matter, MLM companies will be very specific about what distributors can and cannot say about the company’s products.
In 1994, The Dietary Supplement Act enabled MLM companies and their distributors to amplify their statements on the benefits of dietary supplements. Under the 1994 Dietary Supplement Act, third-party literature and/or scientific studies, which are generic in nature, are allowed to be passed out to the public. Continue reading →