Frequently asked questions – MLM, Network Marketing, Direct Selling News, Videos, Articles, Legal Updates, and More.

Are there MLM company programs that help personal and professional growth within the company?

Charity — Thu, 05 Feb 2015 22:00:31 +0000

Companies such as Nikken and Enagic offer both sales and personal development training that have made a significant difference in their distributors’ lives.

Absolutely. First, it should be noted that this industry boasts some of the best motivational and teaching trainers in the sales business. Just Google “MLM Training” and you will be led to great trainers and systems, such as Zig Ziglar and Robert Butwin. Also touch base with some of the leaders at the MLMLegal.com Starting and Running the Successful MLM Company Conference.

As to companies, the very best companies offer significant leadership and training programs. Affiliate organizations of Amway such as Britt and Yager have offered superlative training for decades. Companies such as Nikken and Enagic offer both sales and personal development training that have made a significant difference in their distributors’ lives. Training is a passion for some company CEOs such as Jeff Olson of Nerium International or Richard Brooke, Founder of Oxyfresh.

Those companies that have succeeded have been synonymous with rich training and development. From a legal standpoint, a solid training program, that involves distributors working with their downlines, also deflates accusations of “lottery” by state and federal regulatory agencies because it supports the proposition that upline leaders participate in override commissions based on supervisory activity and not merely based on chance.

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What Is a “Warm Market?”

Charity — Thu, 03 Apr 2014 18:11:06 +0000

Selling to your warm market is sometimes referred to as selling to your “sphere of influence.”

A warm market is loosely defined as a network of potential customers that you’ve had some previous contact or relationship with, including family, friends, co-workers, church members, club/group members, and neighbors. A cold market includes potential customers who you don’t know about you or your business such as someone you’ve met while waiting for your car to be cleaned. Selling to your warm market is sometimes referred to as selling to your “sphere of influence.”

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What does the phrase “pay to play” mean?

Charity — Tue, 06 Aug 2013 17:42:13 +0000

What does the phrase “pay to play” mean?

The term “pay to play” is actually a negative phrase in the direct selling and MLM industry. It is used to reference a program which encourages independent distributors to make purchases to qualify for commissions and rank advancement. Obviously, personal use is not unusual in the direct selling industry. However, programs in which distributors are driven to purchase product or service, more by the desire to qualify than by a genuine desire to use the product for personal use, are sometimes referred to as “pay to play,” and this may suggest that the product or service does not stand on its own in the marketplace, potentially causing legal issues for the company.

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Our next Starting and Running the Successful MLM Company Conference takes place October 24th & 25th, 2013 in Las Vegas. Call Charity before September 1st to receive a discount! 503-226-6600 or 800-231-2162.

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MLM Executive FAQ: Do I have to pay sales taxes in states with sales tax laws?

Charity — Thu, 25 Jul 2013 17:06:26 +0000

Most companies will be registered to pay sales taxes throughout the country. However, most network marketing companies will only register to do business as a foreign corporation doing business in those states in which they have a physical presence, such as having manufacturing facilities, warehouses, offices, or employees. The corporate laws of most states provide that a company is not “doing business in the state” merely because it sells through independent distributors in that state.

MLM companies with tangible personal property sales register to collect and remit sales and use tax. Services are generally not taxed, but more states are proceeding in this area. Your CPA will be able to track rates, classifications, and applicability, as well as handle registrations. He/she can also advise similarly on a few states that have been more aggressive, such Washington with its business and occupation tax, or Texas and Pennsylvania with their franchise tax.

For additional information about sales tax, please consult a MLM attorney, such as Jeff Babener.

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