MLMLegal.com’s most requested FAQ this month answered in a video by MLM expert Attorney, Jeff Babener: What is the difference between sponsoring and recruiting?
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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