It is common for distributors to be recruited based on an attractive compensation plan. Instant monetary benefits, promises of instant wealth, and enormous payouts are often advertised by companies. However, no company has ever been successful based on its compensation plan alone. An out-of-this-world compensation plan often gives the company an initial jump start, but time will prove that a great compensation plan alone isn’t enough to sustain a company.

Of course, a competitive compensation plan with great incentives are important, but “ground breaking” plans are more often a mirage for poor products, that you may have a hard time selling, or poor company management.

In the short term, “unprecedented” compensation plans may work, but they are not sustainable in the long term. Great products, which attract quality distributors and customers, and an organized management team, are what carry a company long-term.

For more information, visit www.mlmlegal.com.

Visit us at www.mlmlegal.com to learn more.

Some legal case authorities claim that if a consultant announces that they are going to join another MLM company on Facebook then it’s protected under freedom of expression by the First Amendment. Therefore, a company cannot accuse a consultant of raiding their downline for distributors. Other courts and cases have suggested that consultants separate out their Facebook downline from those of friends and family.

It is very common for consultants to have friends on their social media accounts who are friends and customers, or co-workers and friends, or family friends and work friends, as well as also being someone they know in their direct selling business as customers or sponsors. Since many consultants often sell to their warm market first, distributors often know their customers or sponsor as friends, relatives, or church members. This causes some issues to arise for the MLM company.

A common issue that the industry is grappling with right now occurs when a consultant leaves a network marketing company and joins another MLM company, then begins promoting the second company to their Facebook friends (or other social networks) and to the people who are in their downline organization from the first company. The question is often asked as to whether or not this is considered distributor raiding. The industry has not come to a consensus on this issue yet. Many MLM companies, however, do ask that consultants who leave their company and start selling for another company, not raid their sales organization because they’re damaging the livelihood of all of the other consultants left behind. The industry is working its way through this issue but has not come up with concrete solution to the problem yet.

There is conflicting legal case authority on the issue. Some legal case authorities claim that if a consultant announces that they are going to join another MLM company on Facebook then it’s protected under freedom of expression by the First Amendment. Therefore, a company cannot accuse a consultant of raiding their downline for distributors. Other courts and cases have suggested that consultants separate out their Facebook downline from those of friends and family. But, as we saw above, Facebook friends do not always fit into black and white categories. Often, your friend is also your co-worker. Your relative is also your customer. Your neighbor is also your friend. The courts have argued that Facebook is, in a way, simply a sophisticated means of sending emails because each post is like sending out a bulk email to several hundred people. From this prospective, deciding on whether or not there is a conflict is complex.

We will let you know if the courts come to a deciding factor anytime in the future. In the meantime, if you are in a similar position, we recommend that you read your company’s policies and procedures to see their specific policy on the topic of consultant raiding. You will also find hundreds of articles on our website(s) and blogs on the topic of distributor raiding.

Here are a few that may be of interest to you:

Why do MLM Companies Require Distributors to Use Replicated Websites Rather than Distributor-Created Websites?

Executive Interview by the DSWA – “Legal Hotspots for Direct Selling Companies” with Jeff Babener – Video

Can I and should I join multiple companies and establish multiple downlines?

MLM Company Policies on Social Networks and Distributor Raiding

How Have Raiding Rules Evolved in Direct Selling Contracts and Policies and Procedures? – Video

How Have Raiding Rules Evolved in Direct Selling Contracts and Policies and Procedures?

Has There Been Cases Won or Lost on the Topic of Social Media and Distributor Raiding?

If you are interested in attending the Starting and Running the Successful MLM Company conference visit our conference page, view our speaker list, or get more details. All executives/owners of direct selling companies are welcome to attend. Call 800-231-2162 to register.

Our next Starting and Running the Successful MLM Company Conference takes place October 22 and 23, 2015 in Las Vegas. View our conference flyer and speaker list online. Participate in our Innovation Campaign for your chance to receive TWO FREE TICKETS to attend our next conference.

If you’re reading this blog post and the conference dates above have passed, check our website for the current conference dates.

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Visit us at www.mlmlegal.com to learn more.

Attitude makes all the difference in survival and success of the startup MLM. Every successful MLM company was driven by a leader who had a passion for the product, the opportunity, or both. The charisma of the leader could not be shared successfully without passion. You must be, in a sense, what the philosopher Eric Hoffer referred to as “a true believer.” A true believer is a founder of cultural, religious, or business movements, and that’s what you must be. There’s little room for the skeptic or cynic.  An Eminem would say, you can’t just sing the song to succeed you must “lose yourself in the music.” Only with passion will persistence and patience occur. And, only with those two additional attributes will an individual be successful in the launch of an MLM company.

It is a rare day that an MLM company is an overnight success. Some companies become overnight success stories because of the migration of thousands of seasoned MLM distributors as the result of the collapse or implosion of other large MLM networks or companies. This occurrence is the exception to the rule. In the end, it is often the case that the company will not experience a more rapid trajectory until it has been in existence for two or three years. It is usually at that point in time that the combination of its stability and some other fortuitous event in the marketplace causes its discovery by legions of distributors and customers. So, in the end, attitude – the culmination of passion, patience, and persistence is a defining factor in the success of the startup MLM company.

– Wishing you the best in your direct selling business, Jeff Babener.

For more information about passion and success in the MLM, direct selling, network marketing, party plan industry, visit the following links:

Jeffrey Babener’s Youtube Channel Reaches 60,000 Views

Explaining Your MLM Company to the Public: Answering the Hard Questions

MLM Success: Thoughts to Consider

Can You Make It By Starting Small?

Bare Basics for Success in Network Marketing

Does Celebrity Involvement Spell Success for an MLM Company?

It’s Passion that makes a MLM Company Successful

Is There a Magic Pill for Success in MLM?

If My MLM Business isn’t Working What Should I do?

Can You Create an MLM Company and Make it By Starting Small?

Watch the companion video to this blog post:

In Order to Achieve Success in MLM, One Must Have Passion, Patience, Persistence

And, visit www.mlmlegal.com for a plethora of information on the MLM, network marketing, direct selling industry.

The next Starting and Running the Successful MLM Company Conference is quickly approaching! On February 21^st and 22^nd, 2013 we are hosting the MLM Conference for the 25^th year! This is now our 63nd annual conference (held almost consistently three times per year over the last 24 years). All executives/owners of MLM, direct selling, network marking, and party plan companies are welcome to attend. This is the original MLM Startup Conference, hosted and perfected by direct selling industry expert, MLM Attorney Jeff Babener. Call 503-226-6600 or 800-231-2162 to register. Ask Charity how to get a discount! (Can’t make this event? Keep an eye out for our May and October conferences as well.)

Visit us at www.mlmlegal.com to learn more.