Distributors working for MLM companies earn income slightly differently than a typical employee. Here are two basic ways that distributors earn income in MLM:

1. Retailing – They buy products from their companies at wholesale prices, sell them at retail prices, and keep the difference. Or, they simply take orders and receive commissions. This is basically the same compensation offered by conventional marketing companies, except that independent distributors for network marketing companies are not merely employees. Instead, they are their own bosses – the owners of their own business.

2. Sponsoring – For sharing the marketing opportunity with others, distributors build their own sales organizations and receive bonuses or override commissions on the sales of the distributors in their organizations. Network marketers can multiply their earning potential by creating their own sales forces and helping the distributors within their networks do the same.

What’s the Difference Between Sponsoring and Recruiting? Watch this video to learn more.

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Because we are globally-connected, you are bound to become involved in long distance sponsoring.

Embrace the opportunity to recruit beyond your city walls. You never know if – in a city a thousand miles away – long-distance sponsorship will be your most productive downline.

Like everything else in this business (in life); however, there are right and wrong ways to go about long distance sponsoring.

In a Business Start-Ups magazine interview, a national developer and producer of marketing and training materials for MLM companies and distributors, notes that “a conscious game plan may make all the difference in effective long distance sponsoring.” The interviewee points out that the helter-skelter approach to sponsoring (“go wide and see where it goes”) won’t necessarily yield the best results for your time and effort. Using this approach, he says, people are told to sign up anyone “as long as they breathe.”

Like any other important financial decision, the interviewee goes on, give it thought. “Just because you know a guy in Ohio, doesn’t mean you should sign him up, particularly if he is going to do nothing in your organization but draw on your time.”

This approach may support a few heavy hitters at the top of a network marketing organization, but not the average distributor. The interviewee points out that the top people in a network organization always try to put active, motivated people on their organization.

Here are 10 tips to help you when it’s time to cash-in on long distance sponsorship:

1) Know your craft: Before you start sponsoring long distance, make sure that you’ve mastered sales and recruiting in your own locality. The interviewee advises, “Know what you are doing and what you are going to teach.” Be a deal closer!

2) Choose wisely: If you want to increase your chances of success in long distance sponsoring, look for people who are “wired to win;” independent people with a track record of success. In fact, the further the distance, the more independent and reliable that person must be. The interviewee parallels the long distance sponsoring relationship to that of a long distance romance, saying, “If I am in LA, can I have a successful romance with someone in NY? Perhaps if I choose wisely.”

3) Create a system: You should start off with a comprehensive plan of attack and communicate it to your downline distributors so that you are all singing from the same song sheet. This is best accomplished at the beginning of the relationship by emailing them your proposed plan of attack.

4) Agree on responsive commitments: When you first establish relationships with long distance recruits, take some time to qualify the candidates. You need to talk to them, says the interviewee, and determine what they want, how much they are willing to commit in time, money and resources, and in what timeframe. Although you are all operating independent businesses, you are somewhat dependent on one another. Once you find the right person, develop an agreement that details your respective commitments – at the very least – in an email dedicated to the subject of business goals and plans.

5) Establish a long distance sponsoring budget: You have to spend money to make money. Long distance sponsoring is going to create expenses you don’t normally have when you sponsor distributors locally. To determine whether it will pay off for you, you’d better understand the costs involved. The first obvious expense is of calling charges and data rates on phone plans that don’t have unlimited data. Are you going to be mailing support materials to downline distributors? Plan on postage and mailing expenses for communication and shipping expenses for support materials. Are you planning on flying out to meet your downline or join an event? Plan a travel budget to support your downline group. This is obvious, but must be mentioned anyway: Make use of free technology (email, Skype, messaging services, etc.) to cut down on your long distance communication expenses.

6) Get some support from your company: If it looks like long distance sponsoring will be a real winner for you, you should take a close look at the multilevel marketing company you are working for to see if it has systems that will work to support your efforts. These may include voice messaging systems, national conference call service, digital communications and documents, email services, distributor website, as well as engaging materials to support retailing and team building.

7) Make sure the company training program supports long distance growth: Although this has been a problem in the past for some network marketing companies, many MLM companies today are developing new systems to support essential training for long distance recruits. Just take a look at their marketing materials.

8) Build your downline in geographical areas supported by your company: When you build your organization long distance, try to build in areas where the company is supporting growth through tours, rallies, events, and training. It’s much easier (and less expensive) to arrange meetings if most everyone in your downline is located around the same regional area.

9) Focus on areas where other successful distributors are located: Geographical areas where there is an infrastructure of successful distributors should be your first focus. It is particularly helpful if you can develop a reciprocal relationship where you support distributors of long distance recruits in your city in exchange for your distributors being supported by successful leader outside your city.

10) Provide the personal touch: The interviewee suggests that “training is everything and three-way calling is the name of the game in long distance sponsoring.” Be sure that you are on the phone with the first 10 contacts your new, long-distance distributor calls. This bonds potential customers to your organization from the very beginning. And also – when your distributors contact their potential customers – your new recruit will have the opportunity to listen to your presentation, gather information, learn how to overcome resistance, learn how to close the sale, and begin to build their own successful business.

In network marketing, long distance sponsoring opens a world of opportunity. If you’re willing to do it right, it can be an extremely profitable world. Remember, it takes time. It take a lot of effort and patience. And, above all, it takes determination.

Learn more about recruiting from Attorney Jeff Babener!

What is the benefit of recruiting experienced distributors? Video!

What’s the difference between sponsoring and recruiting? Video!

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Although the terms sponsoring and recruiting are often used interchangeably, they are actually have two very different meanings. Recruiting is the act of searching and soliciting for new distributors for the downline sales organization of an existing distributor. Of course, the activity carries important responsibilities, such as compliance with company and statutory guidelines on earnings representations, product representations, and representations as to the business opportunity of the company.

Once a recruit has agreed to join the company, a recruiting distributor becomes a sponsor. Almost all company policies set forth very specific duties and responsibilities of a sponsor, including supervision, training, and communication with their downline sales organization. In addition, all companies have specific rules on cross-sponsoring and respectful relationships with other sponsors and distributors.

Watch the video for a detailed explanation by Jeff Babener, Editor of MLMLegal.com. View all of our new videos and more on our new and improved website: MLMLegal.com!

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Most companies will allow consultants to join downlines with multiple companies so long as they don’t raid the sales organization.

Some companies state that you can’t recruit people that you didn’t personally sponsor. If you personally sponsor a friend or family member then why can’t you recruit them to join you at your new company?

The short answer is that company policies have evolved over the years, resulting firstly from a combination of increased raiding by distributors who switch companies. And secondly, direct selling companies have become more rigid in trying to retain their sales force, sometimes with good reason, although they sometimes appearing to be “overreaching.”

For instance, around 20 years ago, leading direct selling companies maintained a policy that required consultants to only offer the opportunity to people who they personally sponsored. Twenty years ago, this was a common policy.

Over time that policy changed. With the increased ease of communication due to technology, many companies asked that consultants not participate in raiding anyone in their organization while they were active with a company. The policy later morphed again to require consultants not to sponsor anyone in a new opportunity except for those that they personally sponsored upon leaving for a new company. Then the policy changed once again to where companies required that consultants who left a company not sponsor anyone into the new company.

In a few instances, some companies have provided non-compete agreements, which aren’t considered fair and are not even enforceable as a matter of policy in the state of California. Some companies have gone so far as to tell their distributors that they cannot participate in any direct selling activity for a certain period of time after leaving the company. Almost all states frown on non-compete agreements because they inhibit people from conducting their livelihood. Compared with the policies of twenty years ago, the extremities in policy have morphed extensively in terms of restrictions.

Today, the most common clauses seen are ones in which companies have moved from the concept of “don’t recruit anyone unless you’ve personally sponsored them” to “during your time with our company, we ask that you not raid anyone in your sales organization, whether you’ve personally sponsored them or not.” Most companies today will also ask that former consultants not raid people in their organization and recruit them to another for a period of six months to one year.

Most companies will allow consultants to join downlines with multiple companies so long as they don’t raid the sales organization. In the party plan arena, companies will often implement restrictions based on product. If you are selling jewelry, for instance, then the company will ask that you not join another company which is selling jewelry.

What happens if consultants raid anyway?

As a practical matter, not a legal matter, if a distributor is affecting the entire franchise of the company – having a major impact – a company will not hesitate to file suit and to seek an injunction against the distributor. It is very rare to see a company pursue a consultant who is very low on the sales genealogy or who has a very limited sales organization. Legal action is usually reserved for consultants whose major raiding activities would take a good portion of the business away from the company. Often in situations, such as these, there has been a bad-faith decision by the distributor themselves, which isn’t fair to the company.

Is there a right or wrong? Probably not. However, it is important to the future of direct selling that companies and distributors reach some common ground on acceptable practices by distributors who leave companies and recruit their former colleagues to new companies versus reasonable expectations of companies in restricting distributor movement in a way that is not overreaching in the marketplace.

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