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Products that Sell the Best through Network Marketing

Charity — Thu, 30 Jun 2016 17:07:32 +0000

As a general matter direct selling, which is often also referred to as network marketing and multilevel marketing, is a channel of distribution best suited to market consumer products and services directly to the customer, or end consumer. Some business-to-business, commercial companies market their business products and services to other businesses. Many times business-to-business products and services are best suited to be sold by staffed sales professionals, as opposed to the sales consultants used by network marketing companies.

Historically, the products sold by direct selling companies are in the categories of personal care, health/nutritional, cosmetics, jewelry, household products, and technology, etc. These types of products are not only marketed to the end consumer, but the end consumer is often the best candidate to pursue a part-time opportunity in marketing those products as well. And, thus network marketing is not only best suited for consumer (as opposed to business) sales, but the potential pool of recruits is to be found in the thousands, millions of end consumers.

This is not to say that network marketing is not involved in a wide array of both consumable and one-time use products and services for end consumers. In fact, certain markets have been created by direct sellers, including water treatment devices, magnetic products, pre-paid legal services, home food storage containers, etc. In addition, the industry has established great success in the marketing of telcom, energy and various insurance/financial products. Its imprint can even be found in application to the real estate industry. Sales of the U.S. network marketing industry exceed $30 billion and the number of participants is approaching 20 million.

See Hard Facts about a Growing Industry – 2015 for current statistics on the direct selling industry.

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.

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Creating a Compensation Plan That Is Guaranteed to Be Legal

Charity — Thu, 16 Jan 2014 19:08:48 +0000

The matrix compensation plan is one of many different types of compensation plans used by direct selling companies.

How do I create a compensation plan that guarantees to be legal? This is a question that might take one thousand pages to answer. You will find endless articles and videos at www.mlmlegal.com on differentiating a legitimate direct selling company from a pyramid scheme.

A legitimate compensation plan program offers quality products/services at reasonable prices, which are purchased by ultimate users, i.e. who use the products/services and who purchased products/services because they want it and because it stands on its own in the marketplace. As opposed to products/services that are purchased where the predominant intent is merely to “buy into the deal.” Pyramid schemes are characterized by bogus products, high investments, inflated pricing, inventory loading, and where the primary intent is to cause independent business owners to pay money for the right to qualify, and they recruit others to pay money for the right to qualify, and so on.

MLMLegal.com has launched the Innovation Campaign for its February 2014 MLM Startup Conference. Read how to get your two free tickets by clicking HERE!

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Our next Starting and Running the Successful MLM Company Conference takes place February 27th & 28th, 2014 in Las Vegas. Call 503-226-6600 or 800-231-2162 to register.

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What does the phrase “pay to play” mean?

Charity — Tue, 06 Aug 2013 17:42:13 +0000

What does the phrase “pay to play” mean?

The term “pay to play” is actually a negative phrase in the direct selling and MLM industry. It is used to reference a program which encourages independent distributors to make purchases to qualify for commissions and rank advancement. Obviously, personal use is not unusual in the direct selling industry. However, programs in which distributors are driven to purchase product or service, more by the desire to qualify than by a genuine desire to use the product for personal use, are sometimes referred to as “pay to play,” and this may suggest that the product or service does not stand on its own in the marketplace, potentially causing legal issues for the company.

And don’t forget to visit the rest of mlmlegal.com and mlmattorney.com for limitless information about the direct selling, network marketing, MLM, and party plan industries.

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Our next Starting and Running the Successful MLM Company Conference takes place October 24th & 25th, 2013 in Las Vegas. Call Charity before September 1st to receive a discount! 503-226-6600 or 800-231-2162.

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MLM Executive FAQ: Do I have to pay sales taxes in states with sales tax laws?

Charity — Thu, 25 Jul 2013 17:06:26 +0000

Most companies will be registered to pay sales taxes throughout the country. However, most network marketing companies will only register to do business as a foreign corporation doing business in those states in which they have a physical presence, such as having manufacturing facilities, warehouses, offices, or employees. The corporate laws of most states provide that a company is not “doing business in the state” merely because it sells through independent distributors in that state.

MLM companies with tangible personal property sales register to collect and remit sales and use tax. Services are generally not taxed, but more states are proceeding in this area. Your CPA will be able to track rates, classifications, and applicability, as well as handle registrations. He/she can also advise similarly on a few states that have been more aggressive, such Washington with its business and occupation tax, or Texas and Pennsylvania with their franchise tax.

For additional information about sales tax, please consult a MLM attorney, such as Jeff Babener.

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Eight Ways to Identify an Illegal Pyramid Scheme

Charity — Thu, 20 Jun 2013 17:00:01 +0000

The last thing you want to do is join an illegal pyramid scheme. Here are eight red flags to look for when considering joining a direct selling, MLM, network marketing opportunity:

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.

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.

Programs that require inventory “loading.” A legitimate MLM opportunity doesn’t require you to buy unreasonable amounts of inventory to begin your business.

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.

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.

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.”

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.

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.

There is plenty more information on pyramid schemes and how to spot them at www.mlmlegal.com and www.mlmattorney.com.

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Why You Should Trademark Your MLM Company Name

Charity — Tue, 12 Feb 2013 21:12:57 +0000

This blog post is the companion post to the video H ow Important is Your Company Name? Learn about Trademarking Your Company Name. The following is the transcript of MLM Attorney Jeff Babener’s own words:

Hi, I’m Jeff Babener of MLMLegal.com, and I’d like to talk to you today about your trademark. Imagine living your life without a name. To some extent, you define yourself and your existence by your name. Your trademark, in a sense, is your branding for life.

When others think of you they think of your name and vice versa. Your choice of name for your MLM company is equally important. Not only will you brand your business and product but what may be worthless today will be your most valuable asset in years to come. Just ask Coca-Cola, Marlboro, Microsoft, Avon, or Mary Kay.

And so, your company name deserves special emphasis in the beginning. A trademark search by your MLM lawyer is a must. You don’t want to be told three years down the road that you must give up your name because you did not bother to conduct a trademark search. It would be a devastating blow to your business. Also, it is essential that the name that you choose will suit expanding product or service offerings down the road.

So, what’s in a name? Everything.

Wishing you the best in your direct-selling business, I’m Jeff Babener.

For more information visit our websites: www.mlmlegal.com and www.mlmattorney.com.

Or, visit these links for more information:

MLM Consulting: How to Build a Successful Direct Selling Company

MLM Corporate Startup Essentials: MLM Trademark

It’s Our Name – Live With It

The Educated Networker: Trademarks and Network Marketing

Comparative Advertising

Why do companies restrict the type of advertising carried on by their distributors?

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And, as always, visit MLMLegal.com, the best MLM resource on the web. 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. (Can’t make this event? Keep an eye out for our May and October conferences as well.)

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