Almost all major direct selling companies have defined “retail sales” to include sales to non-distributors, as well as sales to distributors for actual use or consumption (distributors like to use the products they sell too). Many regulatory officials, however, have maintained that the “mark of legitimacy” is found in the programs where primary sales revenue comes from sales to non-distributors, i.e. consumers.

As a theoretical goal, the regulatory position is admirable. The fact is that personal use in the direct selling business creates high sales revenue for many companies from the moment of their inception.

For many years after the 1979 Amway decision, a “live and let live attitude” prevailed between the MLM industry and regulatory community. Although periodic legal skirmishes occurred, the industry and regulators appeared to be content to “agree to disagree.” Instead, the focus on legal investigation was upon inventory loading, cash pyramids, phony products, and earnings hype.

The comments of a federal appeals court in a 1996 class action case involving a company called Omnitrition invigorated the debate on personal use. In that decision, which involved an interim ruling in the case, the federal appeals court questioned whether or not a network marketing company could be viewed as legitimate if its sales were not derived from nonparticipant customers (i.e. distributors). The language in the decision was heavily criticized by the MLM industry, and the Direct Selling Association (DSA), in fact, filed an amicus brief citing the importance of personal use in direct selling marketing programs. However, the decision stood firm. In the trial court’s ruling, the court recognized that products purchased for personal use by distributors constituted a retail sale in the same fashion that sales to nonparticipants would constitute a retail sale.

In the aftermath of the decision, both state and federal regulatory agencies were emboldened to sue or obtain consent decrees against network marketing companies which contain very restrictive requirements regarding recognition of personal use by distributors. State agencies were all over the board on their position. Some demanded 50 percent sales to non-distributors. Some demanded 70 percent sales to non-distributors. Some demanded 80 percent to non-distributors. Even the FTC awakened after 20 years of dormancy and demanded that more than 50 percent of sales be to non-distributors in various consent decrees.

The aggressiveness of government activity was alarming to the industry. The industry quickly marshaled forces, and in short order, at least four states adopted legislation specifically recognizing personal use as a legitimate end destination for products. Other states were likewise targeted for such legislation and the industry was of the belief that a trend would be started that ultimately would be recognized by all state and federal agencies. So strongly did the industry feel about it, that its leading trade association, the DSA, undertook consideration of a formal amendment to its ethics code which would recognize that, for purposes of a pyramid analysis, a retail sale would include sales to nonparticipants, as well as sales to participants for actual use or consumption.

Notwithstanding the ongoing debate on personal use, the industry seems to thrive in almost all states. These is no question; however, that the “personal use” issue is a thorny issue and one issue upon which the industry and regulators must carry on an earnest ongoing dialog to reach a consensus that protects consumers, distributors and network marketers.

Learn more about the multilevel marketing industry and personal use. Watch expert Attorney Jeff Babener’s videos:

What Is the U.S. and International Trend in Recognizing the Validity of Personal Use by Distributors in Pyramid Cases?

Is There a Message to the Direct Selling Industry on Next Steps after the Burnlounge Case on Personal Use?

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

This is a question that might take one thousand pages to answer. You will find endless articles and videos at www.mlmlegal.com and www.mlmattorney.com on differentiating a legitimate direct selling company from a pyramid scheme.

Key features of a legitimate compensation plan include a program which offers quality product/service at a reasonable price, which is purchased by ultimate users (of end-consumers), who use the product/service and who purchased it because they want it. The product stands on its own in the marketplace as opposed to purchases or payments that where the predominant intent is merely to buy into the program. Pyramids are characterized by bogus products (think wishes and prayers), high investment from consultants to buy-in to the company, inflated pricing, inventory loading and where the primary intent of the compensation plan is to cause individuals to pay money for the right to qualify for the program, causing others to do the same and so on.

Sign up FREE for our newsletter, MLM News Global, and keep updated on industry news, scams, video highlights, and relevant articles.

Learn more about the network marketing business at www.mlmlegal.com and www.mlmattorney.com.

If you are interested in attending the Starting and Running the Successful MLM Company conference visit our conference page, view our speaker list, or get more details. All executives/owners of direct selling companies are welcome to attend. Call 800-231-2162 to register.

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.

If you’re reading this blog post and the conference dates above have passed, check our website for the current conference dates.

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

The matrix compensation plan is one of many different types of compensation plans used by direct selling companies.

How do I create a compensation plan that guarantees to be legal? This is a question that might take one thousand pages to answer. You will find endless articles and videos at www.mlmlegal.com on differentiating a legitimate direct selling company from a pyramid scheme.

A legitimate compensation plan program offers quality products/services at reasonable prices, which are purchased by ultimate users, i.e. who use the products/services and who purchased products/services because they want it and because it stands on its own in the marketplace. As opposed to products/services that are purchased where the predominant intent is merely to “buy into the deal.” Pyramid schemes are characterized by bogus products, high investments, inflated pricing, inventory loading, and where the primary intent is to cause independent business owners to pay money for the right to qualify, and they recruit others to pay money for the right to qualify, and so on.

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.

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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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Next MLM Startup Conference takes place February 27 & 28, 2014 in Las Vegas.

Herbalife Belgium:

In a dramatic turn, a Belgian appeals courts reverses a lower court ruling and hold that Hebalife is no pyramid, but is in fact a legitimate direct selling business opportunity. The court validates “personal use” by distributors in pyramid analysis.

Herbalife: Belgian Appeal Court: Herbalife is No Pyramid, Validates Legitimacy – The Next Chapter in Personal Use

Herbalife: What the Short Sellers Missed:

This article tracks major regulatory actions over two decades to suggest that short sellers reliance on criticism of “personal use” may be misplaced.

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

BurnLounge: Personal Use Recognized

In this case, a federal court expresses validity to distributor personal use, but rejects purchases of packages and sales tools where the predominant reason for purchase is merely to qualify for recruiting commissions in the opportunity.

FTC v. BurnLounge: Lessons Learned for MLM/Direct Selling

Editor and direct selling attorney, Jeff Babener of Babener & Associates, discusses these issues in his trilogy of articles on personal use and network marketing.

The pivotal issue of “personal use” will be thoroughly covered in the next  Starting and Running the Successful MLM Company Conference taking place February 2014.

The conference will be held February 27th & 28th, 2014, which is quickly approaching!

For more than 26 years, leading industry experts have educated the executives of starting and existing MLM, direct selling, network marketing, and party plan companies on how to structure their compensation plans, legalize their companies, recruit key employees and top-ranking distributors, develop business models, generate leads, fund their business, establish their website and technology platforms, better understand the direct selling industry, and so much more.

The next MLM Startup Conference takes place February 27th & 28th, 2014 in Las Vegas. View the conference flyer page at  http://www.mlmlegal.com/srs2.html  to learn more.

This is the  original  MLM Startup Conference – responsible for launching many industry-leading companies – perfected over the course of a quarter of a century to ensure the highest quality of information, the most knowledgeable experts, and the most practical advice from qualified experts.

Over the course of two days, attendees will hear from scores of industry experts, and if they choose, can sign up to meet with the speakers for individual one-on-one time. A full list of speakers and their biographies/credentials can be found at  http://www.mlmlegal.com/bio.html .

The educational information gained by attending this event is invaluable. Here are just a few of the testimonials from past attendees:

“We have a traditional business at the moment and we are looking to take it into the realm where it’s more personalized, it’s more about building people and an experience. It has been absolutely worth our trip. We are looking to take our business to the next level and build relationships.”

“The reason I came to the show was to learn more about how to launch my direct sales company. I’m very comfortable and accustomed to selling through more traditional networks; however, I believe that the product that I’m launching is more suitable for direct sales; to get direct-to-consumer faster and in greater sales.”

“[I’ve] been in network marking for 30 years [but] we are learning a lot of things about how to launch, how to reach the people we need to have, and again, the things that are required to make a successful company, not only for us but especially for our customers and for our affiliates.”

Each attendee will receive a FREE copy of the  Starting and Running the Successful MLM Company Manual .

How do you find out more information?

Visit our website:

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Watch the Conference videos:

MLMlegal Releases New Film on MLM Startup Conference – Produced by Networkingstar.com

The MLM Startup Conference in Las Vegas

MLM Startup Conference –  A Must for Executives of Startup and Existing MLM Companies

Contact Us : REGISTER TODAY!  503-226-6600  or  800-231-2162

The next MLM conference will be held February 2014 in Las Vegas (keep a look out for the May and October conferences as well). Each day will begin at 9:00AM and end at 4:00PM, when the one-on-time will begin and end around 7:00PM. For more information visit: http://www.mlmlegal.com/srs2.html  or call 800-231-2162/503-226-6600. Registrations are taken by phone and questions are always welcome.

Visit our website to find out how to receive two free tickets to the event by participating in our February 2014  Innovation Campaign :  http://www.mlmattorney.com/innovationcampaign.html .

Presented by one of the most trusted individuals in direct selling and MLM, Jeffrey Babener, Editor of  www.mlmlegal.com .

About Attorney Jeffrey Babener : Conference Host and Chairman, Editor of  www.mlmlegal.com , as well as the leading direct selling attorney in the United States – With over 25 years of experience as a direct selling attorney, Jeffrey Babener has advised leading companies in the MLM/Direct Selling industry, ranging from Avon to Nikken, to Herbalife, to Melaleuca, to USANA, and to Excel Communications, plus many more. He’s been published in national magazines such as  Money, Inc. ,  Atlantic Monthly ,  Entrepreneur  magazine,  Direct Selling  News,  Direct Sales Journal ,  Success  magazine,  Money Maker’s Monthly , among countless others. He’s authored several books, including his most popular  Network Marketing: What you should know . Mr. Babener has chaired more than 64 national conferences on direct selling.

Contact: Babener & Associates/MLMLegal.com
Telephone: 503-226-6600/800-231-2162
http://www.mlmlegal.com

View the Press Release HERE.

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

Herbalife was established in 1980 and operates in over 75 countries.

A lower court ruling that had previously claimed that the international nutritional company, Herbalife, was operating as a pyramid scheme was overturned December 3, 2013. An appellate court declared that Herbalife was in fact operating in complete compliance with Belgian law. This ruling is in response to the previous claims by the consumer organization, Test-Aankoop that Herbalife was operating as an illegal pyramid scheme, reports Yahoo! news.

Herbalife was established in 1980 and operates in over 75 countries. The company is the world’s fifth top direct selling company, with 2.7 million salespeople in roughly 79 markets, reports mlmlegal.com.

For additional information, read the following articles:

Herbalife:  Belgian Appeal Court: Herbalife is No Pyramid:  Validates Legitimacy: The Next Chapter in Recognition of Personal Use

**See a translated copy of the actual Belgian Court of Appeal Herbalife ruling.

Herbalife Statement Regarding Belgian Appeal Court Ruling

Herbalife: Belgian Court Overturns Pyramid Ruling

Herbalife says Belgian appeals court reversed pyramid scheme finding

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

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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.

UPDATE: In light of the news that Herbalife indeed is abiding by Belgian law, Yahoo! news reports that the company’s shares have risen nearly seven percent.

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

Apart from general pyramiding accusations, the direct selling industry can learn from the Federal Trade Commission’s (FTC) specific allegations of improper activity. The FTC includes front loading as inappropriate activity stating:

Front-loading or inventorying of product in which excessive product purchases are viewed as prohibited consideration for the requirement that individuals make an initial investment of product purchased to engage in the opportunity.

In the August 1999 case FTC v. Equinox the FTC accused the company of making recruits engage in the following inappropriate front loading activity:

New recruits were front-loaded with $5,000 inventory purchases by being encouraged to “buy-in” at the managerial level.

MLM marketing plans which result in inventory loading distributors should be taken very seriously and avoided. Here are five ways to tell if the direct selling company you are considering joining is reputable or perhaps may be operating as a pyramid scheme:

• Promotions where the business opportunity is the “product.” If there is no legitimate product or service being sold, but only the opportunity itself, then chances are that the promotion is a pyramid scheme.
• Products that are sold at inflated prices. Sometimes pyramid promoters try to mask their true intent by selling a product. Often, the product will be vastly overpriced and thus unlikely to generate much retail activity, thereby indicating that the real item being sold is the compensation plan.
• Programs that require inventory “loading.” A legitimate MLM opportunity doesn’t require you to buy unreasonable amounts of inventory to begin your business.
• Programs that require substantial initial cash investments. According to MLM Attorney Jeff Babener, many states consider a required up-front investment of $500 or more to be “substantial” and thus likely to attract the attention of law enforcement.
• Programs that require mandatory purchase of peripheral or accessory products or services. Some pyramids seek to hide their true face by allowing a minimum price for a “start-up” kit and then compelling the investor to buy more expensive items such as training or demonstration materials. Jeff Babener believes that business-start-up kits and selling aids should be sold at company cost.

For more information on front loading, visit www.mlmlegal.com.

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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.

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

Multilevel Marketing

In multilevel or network marketing, individuals sell products to the public — often by word of mouth and direct sales. Typically, distributors earn commissions, not only for their own sales, but also for sales made by the people they recruit.

Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.

If you’re considering buying into a multilevel marketing plan, get the details.

Consider the Products

Many companies that market their products through distributors sell quality items at competitive prices and some don’t.

Find out what will you be selling. Are similar products on the market? Is the product priced competitively? Is it safe? Can your sponsor — the distributor who is recruiting you — support the claims about the product’s performance?

Almost any product or service could be sold through multilevel marketing, including health, beauty, and fitness products that aren’t available through retail sales. Apply a healthy dose of skepticism before buying or selling products advertised as having “miracle” ingredients or guaranteed results. Many of these “quick cures” are unproven, fraudulently marketed, and useless. For instance, if you are considering selling nutritional supplements, you may want to check with a health professional before using them — or selling them.

If you decide to buy into the program and promote the products, you must be sure your marketing materials are truthful and that there’s solid evidence to back up the claims you make about the products. Before you repeat any claims the company has made, verify that there’s competent and reliable research to back them up. That’s the standard the FTC uses when evaluating advertising claims.

Learn More About the Company

Find — and research — the company’s track record. Do an internet search with the name of the company and words like review, scam, or complaint. Look through several pages of search results. You also may want to look for articles about the company in newspapers, magazines, or online. Find out:

• how long the company has been in business

• whether it has a positive reputation for customer satisfaction

• what the buzz is about the company and its product on blogs and websites

• whether the company has been sued for deceptive business practices

• Check with your state Attorney General for complaints about any company you’re considering, although a lack of complaints doesn’t guarantee that a company is legitimate.

Evaluate the Plan

Don’t pay or sign a contract in an “opportunity meeting.” Take your time to think over your decision. Your investment requires real money, so don’t rush into it without doing some research first.

Ask your sponsor for the terms and conditions of the plan, including:

• the compensation structure

• your potential expenses

• support for claims about how much money you can make

• the name and contact information of someone at the company who can answer your questions

Get this information in writing. Avoid any plan where the reward for recruiting new distributors is more than it is for selling products to the public. That’s a time-tested and traditional tip-off to a pyramid scheme.

Keep in mind that when you recruit new distributors, you are responsible for the claims you make about how much money they can earn. Be honest, and be realistic. If your promises fall through, you could be held liable, even if you are simply repeating claims you read in a company brochure or heard from another distributor.

If you don’t understand something, ask for more information until it is absolutely clear to you. Your sponsor and other distributors should be willing to answer your questions. Remember that your sponsor (and others above your sponsor’s level) will make money if you join the program. So take your time, and resist pressure to join. Be aware of shills — fake references paid by the company or distributor to pretend they were successful earning money through the plan.

Find out about refunds.

Get the company’s refund policy in writing. Make sure it includes information about returning any unused products, including restrictions and penalties. It may seem like you’re minimizing your risk if you can return products for a reimbursement, but policies vary on whether you’ll get a full refund — and how long it may take. Many plans require you to buy training or marketing materials, or pay for seminars if you want to get product discounts or create your own network of distributors. Find out how much time and money other distributors spent on training, marketing materials, and seminars when they joined the plan, and whether the plan requires you to participate in periodic training. What happens if you opt out of the training?

Ask a friend or adviser to read the materials.

You may want to consult with an accountant, a lawyer, or someone else you trust who is not affiliated with the plan to review the terms of compensation, determine whether the plan can back up its claims about the amount of money you can make, and analyze the information you’ve been given.

Think about whether this kind of work suits your talents and goals.

Ask yourself whether you would enjoy selling products to the public. Find out how many hours a week your sponsor and other distributors spent on the business when they joined and how much time they spend now. Remember that no matter how good the product and how solid the plan, you’ll need to invest sweat equity and money for your investment to pay off. Consider the other demands of the business — for example, going to training, recruiting new distributors, managing paperwork, recording inventory, and shipping products.

Ask Questions

Ask your sponsor and other distributors tough questions, and dig for details. Don’t consider it nosy or intrusive: you are on a mission to check out a potential business deal that will require your money and your time.

Their responses can help you detect false claims about the amount of money you may make and whether the business is a pyramid scheme. Here are some questions to ask before making any decisions:

• How many people have you recruited?

• How long have you been in the business?

• How much time did you spend last year on the business?

• How much money did you make last year — that is, your income and bonuses, less your expenses?

• What were your expenses last year, including money you spent on training and buying products?

• What percentage of your sales were made to distributors?

• How much product did you sell to distributors?

• What are your annual sales of the product?

• What percentage of the money you’ve made — income and bonuses less your expenses — came from recruiting other distributors and selling them inventory or other items to get started?

It’s important to get a complete picture of how the plan works: not just how much money distributors make, but also how much time and money they spend on the plan, how long it takes before they’re earning money, and how big a downline is needed to make money. One sign of a pyramid scheme is if distributors sell more product to other distributors than to the public — or if they make more money from recruiting than they do from selling.

For more information and updates on the direct selling industry visit www.mlmlegal.com and www.mlmattorney.com.

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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.

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

The Personal Use Issue in Pyramid Analysis; Who is an Ultimate User?

An excerpt from the article and link to the full article atwww.mlmlegal.com.  

Déjà vu, all over again … Yogi Berra

History repeats itself.

The 2012 billion dollar short seller attack on Herbalife, a 32 year old NYSE listed direct seller of nutritional products in 80 plus countries with annual sales in excess of $3 billion, is akin to a replay of seminal challenge to the MLM/Direct Selling model, won by Amway in 1979. In the Matter of Amway, 93 F.T.C. 618 (1979).

In the 1970’s FTC challenge, the criticism went to whether or not the core of the MLM referral selling model was a “deceptive” way to market. In the 2012 short seller attack, along with other criticisms, a principal complaint is that evidence of “substantial personal use and consumption” of company products by distributors themselves, renders an MLM/Direct Selling model inherently deceptive and an illegal pyramid scheme.

Memo to short sellers and algorithmic financial bloggers:

It may be time to reassess.

Some very salient facts and cases may well have been missed in the rush to challenge direct sellers.

1. A survey of FTC, SEC and Justice Department leading pyramid cases during the last two decades is instructive. Interestingly, in massive releases of the Herbalife short seller and the prolific financial blogging “call to action” that Herbalife is a pyramid that should and will be prosecuted by the FTC, NO ONE has bothered to actually examine the facts of leading FTC, SEC and Justice Department pyramid prosecutions of the last two decades… if they had done so, they might observe a significant chasm that exists between inherently deceptive and egregiously abusive pyramid schemes and the practices of leading direct selling companies.
2. They also may have missed the FTC’s own statements on personal use, as well as the trending legislation in more than a dozen states, recognizing the validity of personal use as a legitimate end destination of product.

For the full and detailed article “HERBALIFE: WHAT SHORT SELLERS MISSED ON THE WAY TO THE PRESS CONFERENCE…The Personal Use Issue in Pyramid Analysis Who is an Ultimate User?”

For more information, visit our websites at www.mlmlegal.com and www.mlmattorney.com. Or, visit our blogs at http://mlmlegal.com/MLMBlog/ and http://mlmattorney.com/blog/.

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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 will be here before you know it! On May 16^th and 17^th, 2013 we are hosting the MLM Conference for the 25^th year! This is now our 64^th 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 October and February conferences as well.)

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

The Introduction of Expert MLM Attorney, Jeff Babener

Jeffrey Babener of Babener and Associates is a legal legend in network marketing for his representation of some of the biggest and best MLM companies in our industry, as well as for his contribution to the positive development of network marketing law.

His several books are viewed as cornerstones for understanding correct business practices in the direct selling industry. And, his quarterly seminars on how to launch and run an MLM company have served as the foundation for dozens of direct selling companies that have become network marketing success stories.

Mr. Jeffrey Babener, please introduce us to network marketing…

Mr. Jeff Babener: Unfortunately, we have many companies out there that are scams masquerading as legitimate multilevel marketing, direct selling companies. This has been a problem for the industry. There is often a fine line between legitimate and pyramid companies since the structure of all companies are in some pyramid format, but the courts and regulatory agencies have long established the difference between legitimate and illegitimate.

The bottom line is that we are looking for a product or a service that has a legitimate place in the consumer marketplace. When we look for a legitimate MLM company, we are looking for a variety of things. We’re looking for a product that is fairly priced and that gets used. We’re looking for a program that pays commissions only on products that are sold to the customer and are used. We are looking for a program that doesn’t involve inflated earnings claims or earnings exaggerations. We are particularly looking for a program that doesn’t involve high-cost investments or inventory loading.

We’re looking for programs that don’t involve overinflated pricing of products. We’re looking for programs that are intended for the long-run. And eventually, what is asked of the company by consumers, courts, regulatory agencies, etc. is if people are buying products or services from the company, what are they paying and why are they paying it?

If they are paying an exorbitant amount of money just to buy into the program and to qualify into what everyone refers to as “the deal,” it’s an illegitimate program. If they’re buying products and services because they want them, they intend to use them, and they have a market for them, then the business model probably will work. Always remember, there is always a fine line.

For more information on the difference between a legal and illegal direct selling, network marketing, MLM company, visit the following links:

Is This a Pyramid or a Legitimate MLM? Article

From a Legal Perspective: The Difference Between a Pyramid Scheme and Legitimate MLM Video

What Makes a Pyramid Scheme? Video

Not all Direct Selling Companies are Pyramid Schemes Video

Where can I find a legitimate direct selling company to join? Article

Identifying Illegal Pyramid Schemes Article

How to Tell if a Company is a Pyramid or a Legitimate MLM Video

Read our blog posts on relevant topics:

Interview with MLM Attorney On The Difference Between a Pyramid Scheme and Legitimate MLM

Are you Starting 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?

February 2013 MLM Startup Conference in Las Vegas

ZeekRewards.com Shut Down by SEC for Ponzi Activity

Are the Claims that Corporate America has Discovered MLM “Real” or “Off the Wall?”

Is Your Product Real? The Shoe Test…

There Must be Good Value in MLM

Personal Use by Distributors… Your Questions Answered

FTC v. BurnLounge: Lessons Learned for MLM/Direct Selling

Offshore MLM Pirates and Zealot Regulators

The Legitimate MLM Checklist

Steering Clear of Illegal Scams: “Red Flags” to Look Out for

21 Aspects of a Legal Direct Selling Company

How do I Check if an MLM Company is Legal?

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

MLM/Direct Selling/Network Marketing: A Validated Channel of Distribution

The Origin of State Regulation and the Current Direction of State Regulation

And the Leaves that are Green Turn to Brown – MLM Penny Auctions

The Inevitable Question: Is This a “Real” Business

D-Day: Direct Selling v. FTC

Stock Plunge on Internal Consumption: Whose Fault?

Make sure to visit our blogs for the latest information on the direct selling industry: MLMLegal Blog Home and MLM Attorney Blog Home

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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.)

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

Every once in a while, those looking at our company have questions about the legitimacy of this industry. What would be your advice on what we should say to them?

MLM/Direct Selling/Network Marketing: Millions of Participants Make for a Veritable Industry

People have always asked the question, “Is this industry for real?” “Is direct selling/network marketing a real option for individuals out there?” Keep in mind we have nearly 16 million people in the United States selling consumer products and services in the range of $30 billion and more than 90 million people around the world doing this with sales exceeding $150 billion. This activity penetrates the fabric of our society. Earlier statistics, presented by the Direct Selling Association, have indicated that, perhaps, one in ten households have somebody who is doing this part-time.

In today’s constant discussion of the competitiveness of the U.S. in the global economy, don’t sell the U.S. short. The U.S. is the undisputed leader, accounting for 20 percent of the world revenue. In the other leading markets in Japan, China and Europe, the U.S. companies shine as the dominant players. In a world where the U.S. is looking for every example of where it leads and creates new economic opportunities globally, ranging from Apple to Google, to Amazon.com to Twitter, it is the U.S. that effectively invented the concept of direct selling/network marketing and exported the concept to the rest of the world. Global and N.Y. Stock Exchange traded companies like Avon, Tupperware, Herbalife, Primerica, etc. are only a few of the U.S. companies that have exported “economic democracy” to millions and millions of individuals in industrialized, emerging and third world economies.

And at home, here in the U.S., the network marketing industry has been a lifeline for millions to make that mortgage payment or education savings or to bridge the gap between a “barely getting by” life to one with less stress and perhaps even robust and enjoyable.

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