This blog post is a companion post to the video: An Introduction to Direct Selling and The Basics of MLM
The Introduction of Expert MLM Attorney, Jeff Babener
Jeffrey Babener of Babener and Associates is a legal legend in network marketing for his representation of some of the biggest and best MLM companies in our industry, as well as for his contribution to the positive development of network marketing law.
His several books are viewed as cornerstones for understanding correct business practices in the direct selling industry. And, his quarterly seminars on how to launch and run an MLM company have served as the foundation for dozens of direct selling companies that have become network marketing success stories.
Mr. Jeffrey Babener, please introduce us to network marketing…
Mr. Jeff Babener: Unfortunately, we have many companies out there that are scams masquerading as legitimate multilevel marketing, direct selling companies. This has been a problem for the industry. There is often a fine line between legitimate and pyramid companies since the structure of all companies are in some pyramid format, but the courts and regulatory agencies have long established the difference between legitimate and illegitimate.
The bottom line is that we are looking for a product or a service that has a legitimate place in the consumer marketplace. When we look for a legitimate MLM company, we are looking for a variety of things. We’re looking for a product that is fairly priced and that gets used. We’re looking for a program that pays commissions only on products that are sold to the customer and are used. We are looking for a program that doesn’t involve inflated earnings claims or earnings exaggerations. We are particularly looking for a program that doesn’t involve high-cost investments or inventory loading.
We’re looking for programs that don’t involve overinflated pricing of products. We’re looking for programs that are intended for the long-run. And eventually, what is asked of the company by consumers, courts, regulatory agencies, etc. is if people are buying products or services from the company, what are they paying and why are they paying it?
If they are paying an exorbitant amount of money just to buy into the program and to qualify into what everyone refers to as “the deal,” it’s an illegitimate program. If they’re buying products and services because they want them, they intend to use them, and they have a market for them, then the business model probably will work. Always remember, there is always a fine line.
For more information on the difference between a legal and illegal direct selling, network marketing, MLM company, visit the following links:
Is This a Pyramid or a Legitimate MLM? Article
From a Legal Perspective: The Difference Between a Pyramid Scheme and Legitimate MLM Video
What Makes a Pyramid Scheme? Video
Not all Direct Selling Companies are Pyramid Schemes Video
Where can I find a legitimate direct selling company to join? Article
Identifying Illegal Pyramid Schemes Article
How to Tell if a Company is a Pyramid or a Legitimate MLM Video
Read our blog posts on relevant topics:
Interview with MLM Attorney On The Difference Between a Pyramid Scheme and Legitimate MLM
Are you Starting a MLM Company?
The Hallmarks of Legitimate Direct Selling/Network Marketing Companies
February 2013 MLM Startup Conference in Las Vegas
ZeekRewards.com Shut Down by SEC for Ponzi Activity
Are the Claims that Corporate America has Discovered MLM “Real” or “Off the Wall?”
Is Your Product Real? The Shoe Test…
There Must be Good Value in MLM
Personal Use by Distributors… Your Questions Answered
FTC v. BurnLounge: Lessons Learned for MLM/Direct Selling
Offshore MLM Pirates and Zealot Regulators
Steering Clear of Illegal Scams: “Red Flags” to Look Out for
21 Aspects of a Legal Direct Selling Company
How do I Check if an MLM Company is Legal?
Paying Commissions on Sales Tools, Sales Kits, and Training Materials……No!
MLM/Direct Selling/Network Marketing: A Validated Channel of Distribution
The Origin of State Regulation and the Current Direction of State Regulation
And the Leaves that are Green Turn to Brown – MLM Penny Auctions
The Inevitable Question: Is This a “Real” Business
Stock Plunge on Internal Consumption: Whose Fault?
Make sure to visit our blogs for the latest information on the direct selling industry: MLMLegal Blog Home and MLM Attorney Blog Home
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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 21st and 22nd, 2013 we are hosting the MLM Conference for the 25th 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.)
