Because most leading companies offer terminating distributors a 100% or 90% buy back policy for inventory and mandatory sales materials (a full refund of your startup kit, e.g.), the risk of actually losing money is drastically diminished.

Many leading companies offer earnings disclosures that indicate the level of earnings of distributors. It is true that many distributors merely join to become discount buyers. And actually do not make money in the MLM program because they are not really pursuing the opportunity.

It is also true the vast majority of active distributors (those who actually make money) typically make no more than a few hundred dollars per month. There is a saying in the MLM industry that “95 percent of distributors fail or lose money.” This would not be viewed as a fair statement, unless one views, as worthless, the product/service purchased by distributors for personal or family use. Except for scam companies, this is not the case. Leading MLM companies are known for offering high quality products and desirable services.

What this related video: Why Do Distributors Join MLM Companies?

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For a MLM company, it is imperative to have multiple solutions in place as a company grows.

This is a question for a MLM startup or existing company as opposed to a MLM consultant. For distributors who drive customers to their replicated websites, the company has in place credit card processing capability.

For a MLM company, it is imperative to have multiple solutions in place as a company grows. In fact, fast growth of a network marketing company often triggers major concern for the credit card processor because of the exponential potential liability in the event of charge backs or failure to deliver on the part of the network marketing business. Thus, fast growth may cause a merchant account processor to demand, in exchange for what it perceives as higher risk, larger reserves, higher rates and even hold backs on distribution of funds to the MLM company. Of course, failure to access funds will prove devastating for a MLM company that must pay commissions and pay its own vendors. Pleas by the MLM company often go unanswered by merchant processors and many companies have either faced collapse or actually collapsed as a result.

The short answer is for any startup or existing MLM company is to make sure that it secures multiple processing accounts from different processors and banks. In addition, it should be in touch with a reputable consulting firm that represents companies in the search of back-up merchant account vendors. The time to search is not during the crisis, but before the crisis occurs.

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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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Hello, I’m Jeff Babener, Editor of MLMLegal.com and I’d like to speak with you today about creating clear agreements between company owners. It is one thing for a MLM business to fail because of regulatory, legal, or financial challenges, but periodically, the industry is aghast when a MM company fails due to a dispute among company owners. Unfortunately, such events have occurred. The causes for such failure occurs because the business owners did not at the time of inception take sufficient care to outline their respective rights and responsibilities.

It may be a legal matter, but then again it is often a case of differing expectations about the future of the business. These expectations should be out in the open at the commencement of the business and mechanisms for dynamic change should be anticipated, including exit strategies for owners. The worst case scenario, which has occurred, is paralysis of the business while owners argue over management objectives. Obviously this problem cannot occur when there is one principal owner to the business. It tends not to occur when there are two owners. Three owners tend to produce a revolving alliance of two against one. More than three owners may well be a prescription for future disputes. In any event, managing expectations starts at home and at the beginning of the business.

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:

Profile of the Leading MLM Law Firm – Babener & Associates and MLMLegal.com

MLM: Legitimacy through Statistics, Global Business Position, and Pyramid Schemes

Learn What is Needed to Recruit Top-Selling Distributors for Your MLM Company

Interview with Expert MLM Attorney – Are Earnings Calculators Legal?

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

Should I Launch my MLM Business Locally or Nationally?

Paying Commissions on Sales Tools, Sales Kits, and Training Materials……No!

The Role of MLM Legal Counsel – Why Hire a MLM Attorney

Four Factors that Make a MLM Company Successful

Explaining Your MLM Company to the Public: Answering the Hard Questions

Who Should be the First Key Employee that a Company Should Hire?

MLM Executives Must Raise Capital in Order to Recruit Key Distributors

MLM Pyramid Schemes – Everything You Need to Know All in One Place

Interview with Expert MLM Attorney – How to Handle Compliance Discussions with your Distributors

Are you Starting a MLM Company?

The Top Two Reasons Why MLM Companies Fail

MLM and the FDA

How Important is Philanthropy to a MLM Company?

The Hallmarks of Legitimate Direct Selling/Network Marketing Companies

What Differentiates a Legitimate Direct Selling/Network Marketing Company from an Illegal Pyramid Scheme?

How Important are Merchant Accounts and Payment Processing Solutions for Direct Selling Companies?

Should an MLM, Direct Selling, Network Marketing Company Launch Internationally Immediately?

What Factors Make MLM Executives and MLM Companies Successful – Video

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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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