Why Would an Attorney Host a MLM Startup Conference? Watch the Video!

We have hosted more than 70 national conferences on starting and running a direct selling, network marketing, MLM or party plan company. We have started and advised many of the leading companies in the industry and we have a “big picture” that may be difficult to find elsewhereWe are big believers in education and our website, www.mlmlegal.com, is hopefully evidence of this, with hundreds of articles, cases, statutes, and scores of videos. We take a particular satisfaction in helping entrepreneurs pursue their dreams and the consequence is often the creation of thousands of jobs and opportunities. And at our conferences, we have started many companies that are today, household names. It has been a pleasure and honor to assemble professionals in these conferences to assist individuals to create “something from nothing.”

At the conference, we facilitate relationship-building, networking, and the educating of MLM entrepreneurs. We bring direct selling experts from around the country to one location to coach attendees on software, technology, compensation plans, sales kits, recruiting, funding, capitalization, legal, and many other topics that are imperative to any MLM executive. Attendees are educated in a classroom-type setting by industry experts and then are offered one-on-one time to speak with any (or all) expert they choose. Our goal is to harness long-term relationships, while educating the next generation of network marketing entrepreneurs about the strength and credibility of the MLM industry. An industry that supports millions of people around the world. Continue reading

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Watch Attorney Babener’s Video on How to Price Your Network Marketing Products for Retail, Distributor and Direct-To-Consumer Sales

Your cost of goods is calculated as your acquisition or manufacturing cost. The more frequent question we come across relates to pricing. Most MLM experts agree that you must have adequate margins to pay commissions and to make a profit. Different products and services carry different profit margins. In addition, smaller margins may be satisfactory with high-priced products because there is still room for profit. Most MLM Continue reading

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New Video: If a Sales Kit or Startup Fee Is Several Hundred Dollars, Then Is This Considered “Frontloading”?

Front loading generally refers to a process in which a MLM company, or a sponsoring distributor, encourages a new distributor to purchase far more product than is commercially reasonable under the circumstances. Often the “push” is explained to the recruit as necessary to qualify in the plan. This is an unacceptable practice is often one indicia of a pyramid scheme. Continue reading

Posted in Capitalization, Commission, Compensation Plan, Consultants, Consumer Protection, Direct Selling, Home-Based Business, MLM, MLM Articles, MLM Attorney, MLM Startup, Network Marketing, Sales Tools / Kits, Videos | Tagged , , , , , , , , , , | Comments Off on New Video: If a Sales Kit or Startup Fee Is Several Hundred Dollars, Then Is This Considered “Frontloading”?

Watch Attorney Babener’s Video on How to Price Your Network Marketing Products for Retail, Distributor and Direct-To-Consumer Sales

Your cost of goods is calculated as your acquisition or manufacturing cost. The more frequent question we come across relates to pricing. Most MLM experts agree that you must have adequate margins to pay commissions and to make a profit. Different products and services carry different profit margins. In addition, smaller margins may be satisfactory with high-priced products because there is still room for profit. Most MLM companies are likely to pay total commissions equal to between 30 and 45 percent of the price sold to distributors for resale, or prices for which consumers buy directly from the company. A typical company will try to achieve a minimum 5-7 times markup to allow for commissions, overhead and profit. Typical markup for resale by distributors is 25% of their purchase price. A good place to visit this issue is at the MLM Startup Conference, offered by www.mlmlegal.com, where experts discuss margins, pricing, profit, proformas, and a whole lot more. Continue reading

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Direct Selling: The Negatives are Drowned Out by the Positives

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, by www.mlmattorney.com.

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.

Vocal critics are abundant in the direct selling industry, but the positives drown out the negatives. It’s not hard to find a loud voice criticizing the direct selling industry through a quick Google search. And it is true… there are many pyramid/Ponzi schemes, primarily internationally based, that parade themselves as MLM/direct delling… and they are not. They are merely pyramid headhunting recruitment schemes that often use bogus products and services as an excuse to move money. The entire emphasis of such organizations is to cause investors to pay money and cause others to do the same, with a thin veneer of an actual product or service. In fact, the revenue to pay commissions instead comes from distributor payments and not sales to the ultimate user.

Despite this, the facts remains MLM and direct selling are a major part of the fabric of commerce. Statistics on 2014 sales, compiled by the World Federation of Direct Selling Associations, indicate global sales of $183 billion and 100 million distributors. In the U.S., there are 18 million distributors posting $35 billion in sales. Numerous direct selling companies are traded on the NYSE. Continue reading

Posted in Commission, Compensation Plan, Compliance Guidelines, Conference, Consultants, Consulting, Consumer Protection, Direct Selling, Direct Selling Association, Distributor Education, Earnings Claims, Legal, MLM Articles, MLM Startup, Network Marketing, Party Plan, Pyramid, Raiding | Tagged , , , , , , , | Comments Off on Direct Selling: The Negatives are Drowned Out by the Positives

New Video: What to Expect Working in Network Marketing

A Conversation with Jeff Babener Video Series: Multilevel marketing is a mature, professional industry. Choose a company with a good training program. There is an abundance of opportunity in this industry. As in any business, do your homework. Doctors, dentists, along with truck drivers and waitresses are known to participate in network marketing. There is plenty of opportunity for friendly, hard-working individuals. Watch the video.

Continue reading

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Have You Signed Up for the MLMLegal.com Newsletter?

MLMLegal.com Launches New Newsletter: MLM News Global

MLM News Global - A Journal of Contemporary News, Business and Legal from a Trusted Source, by www.mlmattorney.com.

Sign up today at http://www.mlmnewsglobal.com/.

This newsletter offers recent news, videos, company profiles, and weekly articles delivered to your inbox on a timely basis. Each newsletter contains top news stories in the network marketing industry, the most recent MLM scam alerts, timely articles on the direct selling industry, and so much more.

Make sure you’re not the last to know about top MLM news stories, or to hear about the latest scam reports. Our timely headline reporting will keep you up-to-date on stories that affect everyone in the network marketing industry.

We will also make sure you receive a “Video of the Week” on industry educational topics, such as distributor education, industry Q&A, executive interviews, MLM startup, and pyramid schemes.

Each newsletter features the profile of a direct selling company, like Avon, Mary Kay, and Amway, or perhaps a startup multilevel marketing company that you haven’t heard about yet! MLM News Global also highlights two featured articles on industry-related topics, such as pyramid schemes, compensation plans, recruiting, lead generation, legal analysis, software, and more. Continue reading

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MLM Company Policies on Social Networks and Distributor Raiding

A post on Facebook is really no different than a mass email, by www.mlmattorney.com.

A post on Facebook is really no different than a mass email.

Clearly, while consultants are with a company they are asked not to get involved in raiding activity. Network marketing companies have mixed opinions on post-termination behavior. Most companies ask that consultants not raid the downline for a certain period of time after they stop consulting for the company. Companies that ask this of their consultants argue that the consultant’s Facebook profile is basically an email list; a post on Facebook is really no different than a mass email. Not many companies specifically outline post-termination rules in their policies and procedures; however, most companys’ position on the issue is effectively the same as if you started sending emails to everyone in your downline once you left the company.

Several approaches have been noted, including the drafting of agreements where companies and distributors have bifurcating social media pages. Basically, consultants would have a personal and professional Facebook page. This causes a bit of a dilemma because many consultants will make close friends with those in their downline. Perhaps not everyone fits into a personal or professional-only account. Companies look at it as more black and white. Companies see it as a consultant holding a lengthy email list, whether it be on Facebook or Twitter, etc., and once they’ve sent our an announcement saying “come join me at my new company…” then it is just as if they are sending a mass email to their downline. Both perspectives are understandable, and so far, there is no industry-wide solution to the problem. Continue reading

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Vemma vs. FTC: 10 Quick Bullet Points

MLM Expert Attorney, Jeff Babener offers ten FTC vs. Vemma litigation bullet points.

MLM Expert Attorney, Jeff Babener offers ten FTC vs. Vemma litigation bullet points.

On August 17, 2015, the FTC filed a complaint in U.S. District Court in Arizona, seeking a permanent injunction against Tempe-based Vemma International Holdings, Inc., a long-time direct selling marketer of health-related products. The FTC was successful in obtaining a temporary restraining order, which shut the company and froze its assets. Further proceedings for a hearing on a preliminary and permanent injunction and other relief were set to the future.

Such a scenario has been a common approach for the FTC. The most recent actions resulted in permanent injunctions against BurnLounge and Fortune Hi-Tech Marketing. For a summary of the most significant federal actions during the past few decades, please see:

Herbalife: What Short Sellers Missed on the Way to the Press Conference…

Jeffrey Babener (2013)

The primary accusation against Vemma is that its program focused on recruitment rather than sale of product to the ultimate user, thus rendering the program a pyramid scheme and a deceptive practice under FTC legislation. In addition, the FTC has charged that Vemma is deceptive in its earnings representations.

FTC vs. Vemma Litigation Bullet Points:

  1. (a) This case affirms the BurnLounge standard requiring emphasis on sales to ultimate users, which includes nonparticipant retail customers and personal use in reasonable amounts. Primary motivation for distributor purchases should be destination to ultimate users and not to qualify in the plan for compensation.

Continue reading

Posted in Compliance Guidelines, Consultants, Consulting, Consumer Protection, Direct Selling, FTC, Headlines, Home-Based Business, Law Cases, Legal, MLM, MLM Startup, Party Plan, Pyramid, Raiding, Recruiting | Tagged , , , , , , | Comments Off on Vemma vs. FTC: 10 Quick Bullet Points

New Video: What are High Ticket Items?

A Conversation with Jeff Babener Video Series: There are products and services that have been quite successful in the network marketing industry. Cosmetics, nutritional products, home and kitchenware, even telecom products have done well through multilevel marketing. Products that sell well when demonstrated on a one on one basis are best performers in MLM. Watch the video.

For more information, visit mlmlegal.com.

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