At the very least, a direct sales company should not enter the marketplace without legal review of its marketing program. Hiccups caused by having to respond to regulatory agencies, consultant complaints, vendor conflicts, etc. can be bad for any MLM business and its reputation.

An experienced and seasoned direct sales attorney can be the single most valuable resource that a MLM company can ever utilize. Look for a professional who has represented leading direct selling companies as well as startup companies.

As industry experts, they commonly know more about multilevel marketing and direct selling than most of their clients. In fact, more than half of our conversations with clients involve discussions about the MLM industry, rather than the mere legal aspects of running a direct sales company. And over time, such an experienced “consigliere” (see the movie The Godfather) may become the most trusted business advisor to a company and a vital member of the business team.

Apart from tremendous insight into the business, an experienced network marketing attorney can answer in five minutes what would take a business attorney five hours to research. And, the business attorney would likely still not completely understand the issue, let alone the solution.

The direct sales industry has – for better or for worse – provoked vast amounts of legislation and regulatory control that network marketing attorneys must navigate.

A brief list of regulations, legislation and legalities that experienced MLM attorneys, such as Jeff Babener of Babener & Associates, must commonly appraise include:

– Pyramid statutes

– MLM statutes

– Business Opportunity Rule

– Securities

– FTC regulations

– Postal regulations

– FDA rules and regulations

– Distributor relationships

– Vendor relationships

– Distributor discipline

– Trademark

– IRS and tax regulations

– International expansion

– Sales tax

– Marketing

– State law and registration

– And, legal review of sales kit contents, which include:

1) Consultant agreements

2) Policies and procedures

3) Product brochures

4) Compensation plan

5) Marketing plan presentations

6) Forms, from receipts to multiple owner applications, etc.

At the very least, a direct sales company should not enter the marketplace without legal review of its marketing program. Hiccups caused by having to respond to regulatory agencies, consultant complaints, vendor conflicts, etc. can be bad for any MLM business and its reputation.

Click here to watch the full video!

For more information, watch the video The Legal Issues of Starting and Running a MLM Company.

For more information about the importance of hiring a network marketing, visit Attorney Jeff Babener’s websites: www.mlmlegal.com and www.mlmattorney.com.

In addition, our next Starting and Running the Successful MLM Company Conference takes place October 22 and 23, 2015 in Las Vegas. View our conference flyer and speaker list online. Participate in our Innovation Campaign for your chance to receive TWO FREE TICKETS to attend our next conference.

Visit us at www.mlmlegal.com to learn more.

The fact is that there is a de minimis return percentage makes it so any customer satisfaction policy just looks good and is good customer relations.

The language on the front and back of a retail customer product form is FTC mandated statutory language for person-to-person sales away from a fixed place of business, of goods or services for household use, of more than $25. It is inapplicable to mail order or internet sales, but can be used at the discretion of the seller.

It is not a refund or return policy. Rather, it is designated as a right to rescind a contract or order. It is often referred to as the “Cooling Off Rule,” which is intended to address any high pressure tactics in person-to-person sales and to offer an “out” to “buyer’s remorse.” The notice of cancelation gives the purchaser three days to cancel the transaction, and if they have taken possession, then they must return the goods to the seller. It is a transaction by transaction right of cancelation. It does not apply to previous transactions. Since the language is FTC statutory, companies should stick with the language.

Most companies go far beyond the three day right of cancelation, and further offer customers a 30 days customer satisfaction policy in which the customer has 30 days to notify the company that they are not satisfied and return merchandise for a complete refund. This is not statutorily mandated. It is just good business!

In actuality, it is rare to ever see anyone exercise the three day cooling off opportunity, or for that matter, a 30 day refund offer. And if they do return merchandise, it is often just destroyed for safety purposes. The fact is that there is a de minimis return percentage makes it so any customer satisfaction policy just looks good and is good customer relations.

And, if it may provide comfort to companies, it is rare that direct selling companies have seen any regulatory challenge on this compliance issue.

For more information on the network marketing industry visit www.mlmlegal.com and www.mlmattorney.com.

Find us on our social networks:

Google+

LinkedIn

Twitter

Facebook

Our next Starting and Running the Successful MLM Company Conference takes place October 27 and 28, 2016 in Las Vegas. Call 503-226-6600 or 800-231-2162 to register. If you’d like to see how you can get free tickets to the next MLM Startup Conference, visit our Innovation Campaign page.

Visit us at www.mlmlegal.com to learn more.

Companies that claim to be partners with their consultants should walk the talk.

There are two issues that have surfaced in recent years: 1) social networking and 2) frequent migration of distributors between companies. With social networking concerns, companies have had to decide on positive protocol for consultants who socialize through technology and the internet. In terms of the migration of consultants, companies have often found themselves constantly revisiting policy that both protect the livelihood of all its distributors while also protecting the interest of the company. These issues are constantly under review. Most companies continue to revisit these issues multiple times.

Certainly, it’s not a good idea to make frequent changes to a compensation plan because it undermines faith in the company. Companies should also try and limit the number of changes in basic agreements and also be able to justify any of the changes being made. Companies that claim to be partners with their consultants should walk the talk. They should be saying that their interests lie in protecting distributors and consumers, not just the company. They have a responsibility to protect the livelihoods of thousands, or millions, of consultants who depend on income from the company. This is important because when companies disassemble, consultants who have spent all of their time building sales organizations only to find them stolen or taken elsewhere, are deeply hurt.

In the direct selling industry, the word change can send a certain group of people into orbit. Companies that are making adjustments or enhancements to their policies and procedures or compensation plan must carefully communicate those changes to sellers, especially to the leadership of the company. Leaders need to be prepared to deliver messages and to have the messages palatable to the rest of the sales force.

For more information on the network marketing industry visit www.mlmlegal.com and www.mlmattorney.com.

Find us on our social networks:

Google+

LinkedIn

Twitter

Facebook

Our next Starting and Running the Successful MLM Company Conference takes place October 27 and 28, 2016 in Las Vegas. Call 503-226-6600 or 800-231-2162 to register. If you’d like to see how you can get free tickets to the next MLM Startup Conference, visit our Innovation Campaign page.

Visit us at www.mlmlegal.com to learn more.

In reality, the real and perceived value of emerging online sales and marketing support will far exceed the limited sales kits of “yesterday.”

There has been a clear trend in recent years to offer sales and marketing support online and in the cloud. In reality, the developmental costs are equal or more in providing such support. The quality of support is quite significant, including: all company forms, distributor agreements and terms, policies and procedures, administrative housekeeping rules, product descriptions and updates, compensation plan descriptions and updates, training, communication tools, back office management of down line sales performance and financial reporting, replicated websites, etc.

In reality, the real and perceived value of emerging online sales and marketing support will far exceed the limited sales kits of “yesterday.”

For more information on the network marketing industry visit www.mlmlegal.com and www.mlmattorney.com.

Find us on our social networks:

Google+

LinkedIn

Twitter

Facebook

Our next Starting and Running the Successful MLM Company Conference takes place May 15th & 16th, 2014 in Las Vegas. Call 503-226-6600 or 800-231-2162 to register. If you’d like to see how you can get free tickets to the next MLM Startup Conference, visit our Innovation Campaign page.

Visit us at www.mlmlegal.com to learn more.

Such kits provide ongoing sales and marketing materials information over the course of the one year distributor agreement, and generally there is a modest renewal fee annually.

Historically, a typical “at cost” sales kit has been priced in the $50 range. Typically, such kits included forms, manuals, brochures, and CDs or DVDs. In recent years, sales kits have gone online and are often provided digitally or merely posted in the “cloud.” Such kits provide ongoing sales and marketing materials information over the course of the one year distributor agreement, and generally there is a modest renewal fee annually. In addition, most companies today, charge a modest monthly administrative fee for back office access to genealogy management, replicated website, and communication tools. In recent years, it has not been unusual to see the initial “starter kit” price migrate up to $100. Most companies with tangible products provide for optional “fast start kits.” In addition, many party plan companies mandate starter kits, with sampler product, in ranges of $199 to $299. Technically, only at cost sales and marketing materials should be in a mandated starter kit, but, because party plan companies are so retail driven, regulatory agencies are much more understanding of higher priced mandated sales kits.

MLMLegal.com has launched the Innovation Campaign for its February 2014 MLM Startup Conference. Read how to get your two free tickets by clicking HERE!

Visit www.mlmlegal.com and www.mlmattorney.com for more information on the network marketing industry.

Find us on our social networks:

Google+

LinkedIn

Twitter

Myspace

Facebook

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.

Visit us at www.mlmlegal.com to learn more.