Watch this video and more here.

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Because most leading companies offer terminating distributors a 100% or 90% buy back policy for inventory and mandatory sales materials (a full refund of your startup kit, e.g.), the risk of actually losing money is drastically diminished.

Many leading companies offer earnings disclosures that indicate the level of earnings of distributors. It is true that many distributors merely join to become discount buyers. And actually do not make money in the MLM program because they are not really pursuing the opportunity.

It is also true the vast majority of active distributors (those who actually make money) typically make no more than a few hundred dollars per month. There is a saying in the MLM industry that “95 percent of distributors fail or lose money.” This would not be viewed as a fair statement, unless one views, as worthless, the product/service purchased by distributors for personal or family use. Except for scam companies, this is not the case. Leading MLM companies are known for offering high quality products and desirable services.

What this related video: Why Do Distributors Join MLM Companies?

MLMLegal.com is bustling with educational content for direct sellers and startup/existing MLM companies! Be sure to visit us often!

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 27 and 28, 2016 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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Have you seen or heard a direct selling company say something like, “Make $10,000 a month!” or “Guaranteed income of $2,000 weekly!”? Well, these are a couple of examples of unauthorized earnings claims. So, what is legal to tell your distributors about how much income they’ll make? Read (or watch!) what expert MLM Attorney Jeff Babener has to say in this video:

MLM companies and direct sellers are among the biggest sellers of health and cosmetics products in the world. Some of the largest companies are traded on the NYSE. Because of concerns about safety of its customers, as well as FDA and FTC regulatory scrutiny of labeling and product claims, MLM companies expend tremendous financial and professional resources to remain compliant with rules promulgated by the FDA for marketing of health, cosmetic and personal care products. The FDA publishes extensive guidelines for product claims. In the dietary supplement area, Congress has instructed the FDA on such guidelines with DSHEA, the Dietary Supplement Health Education Act of 1994. And, even, with DSHEA exemptions for substantiated “structure function claims”, any claims in the nature of therapeutic treatment of actual medical conditions, are prohibited. And if such claims are made, the products may be removed from the over the counter market as unapproved “drugs”. In addition, the FTC and most states, under deceptive claims laws, prohibit unsubstantiated or misleading claims about products.   MLM companies, in turn, publish extensive compliance guidelines for distributors as to what may be represented or prohibited, by way of “unauthorized product claims” in the marketing of products. Companies take this issue quite seriously, as inappropriate product claims that trigger regulatory action create a risk for the opportunities of all distributors as well as companies.

MLMLegal.com is bustling with educational content for direct sellers and startup/existing MLM companies! Be sure to visit us often!

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 27 and 28, 2016 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.

Sign up for the MLM News Global newsletter for top headlines, news stories, scam alerts, videos, articles, and more information on the network marketing industry.

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

1. Promotions where the business opportunity is the “product.” If there is no legitimate product or service being sold, but only the opportunity itself, then chances are, the promotion is a pyramid scheme.
2. Products that are sold at inflated prices. Sometimes pyramid promoters try to mask their true intent by selling a product. Often, the product will be vastly overpriced and thus unlikely to generate much retail activity, thereby indicating that the real item being sold is the compensation plan.
3. Programs that require inventory “loading.” A legitimate MLM opportunity doesn’t require you to buy unreasonable amounts of inventory to begin your business.
4. Programs that require substantial initial cash investments. According to MLM Attorney Jeff Babener, many states consider a required up-front investment of $500 or more to be “substantial” and thus likely to attract the attention of law enforcement.
5. Programs that require mandatory purchase of peripheral or accessory products or services. Some pyramids seek to hide their true face by allowing a minimum price for a “start-up” kit and then compelling the investor to buy more expensive items such as training or demonstration materials. Jeff Babener believes that business-start-up kits and selling aids should be sold at company cost.
6. Companies that don’t “buy back.” According to Mr. Babener, “Any plan that does not agree in writing to repurchase a reasonable percentage of unsold inventory or unused sales materials for a stated time after purchase should be avoided.”
7. Programs that pay fees for recruiting. “A legitimate MLM opportunity will have compensation based on product sales and not on recruiting,” Babener states. If money is paid for signing up new distributors rather than for product sales, the business is likely to be a pyramid scheme.
8. Recruiters who misrepresent potential earnings. If the opportunity is sold as a “get-rich-quick” scheme, beware. The only people who do well are those who can sucker others into buying into a criminal confidence game.

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1. Products – The distributors enjoy the products that the company offers

2.  Leadership of the company – Distributors are motivated and encouraged by the leaders of the company

3.  Leadership of the field sales force – Distributors are motivated and encouraged by the leaders of their upline and by others salespeople

4.  Company vision or purpose – Distributors believe in the vision of the company and its mission

5.   Earnings – And, of course, distributors always appreciate a good income opportunity

Why do you stay with your direct selling, network marketing, MLM, party plan company? Can you relate to one of the top 5 reasons distributors stay with a company? Or, do you have a different reason?

(A plethora of information on the direct selling industry can be found online at MLMLegal.com and MLMAttorney.com.)

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