Aerodynamically, the bumble bee shouldn’t

be able to fly, but the bumble bee doesn’t

know it so it goes on flying anyway.

–Mary Kay Ash

Humble Beginnings

Can you become the “million-dollar earner?” Don’t sell yourself short just because you’re starting fresh in the multilevel marketing business. History tells us that, in America, many billion-dollar businesses – including MLM – have been started on a shoestring budget in garages and basements. Cases in point: Bill Gates of Microsoft, Phil Knight of Nike shoes, and Steve Jobs of Apple Computer. There are countless inspiring network marketing success stories about individuals whose companies or distributorships had very humble beginnings, such as:

1) The Bathtub?

The co‑founders of Amway, also known as Quixtar, network marketing’s largest multi-billion-dollar company. Rich DeVos and Jay Van Andel mixed their first product, LOC Cleanser, in their bathtubs when they began their business. Starting out as distributors for a vitamin company, Nutrilite, their Amway Corporation later bought Nutrilite, which today is their division for nutritional supplements. Amway has gone on to become the largest seller of dietary supplements in the world with consistent sales in the billions.

2) Door Knocking?

The founder of Avon (a cosmetic conglomerate), David McConnell, wasn’t even in the cosmetics business in 1886. He was selling Bibles door-to-door, and giving away free perfume samples as a way to get into the homes of prospective customers. As it turned out, his customers showed much more interest in the perfume samples than in the bibles. So, he began the California Perfume Company, later renamed Avon.

Today, Avon, trades on the New York Stock Exchange, operates in more than 140 countries with sales in excess of $7 billion, and is one of the largest sellers of cosmetics in the world.

3) Nothing, really?

After a successful career as a top distributor for the direct selling company, Stanley Home Products, Mary Kay Ash started her own small business in 1963, named Mary Kay. She created products with ingredients like hide tanner (used to cure animal hides) and became the most famous face of direct selling and network marketing. Mark Kay lecturing around the world and was even included in a case study at Harvard Business School.

Mary Kay Ash was one of three alumni distributors of Stanley Home Products that established multi-billion dollar companies. Her colleague, Brownie Wise, went on to help establish Tupperware, and Mary Crowley founded Home Interiors.

Clearly, their MLM distributor experiences allowed them to accept and succeed in new challenges that would likewise impact millions of lives and inspire other entrepreneurs to develop successful distributorships and found their own companies today.

4) Liniment?

Consider the origins of Watkins Products back in 1868. Today, Watkins sells a full line of products, from spices to cosmetics, to health care items. In 1868, however, the founder of the company, Joseph R. Watkins, was selling only one product: liniment. From that single product was built, perhaps, the longest-running direct selling success story of the industry.

5) Football?

How improbable! Art Williams was a high school football coach making little more than $10,000 per year when he applied principles of multilevel marketing to the sale of term insurance.

A. L. Williams went on to become the largest seller of term insurance in the U.S., eventually evolving into today’s Primerica, a division of one of America’s largest financial institutions, Citibank. Sales of financial products by Primerica run into the billions of dollars every year. And, all from a football field!

6) Big Dreams!

Modern-day network marketing successes – whether they are companies or individual distributors – all have their own startup story, starting on a shoestring budget. This business was meant to grow from the humble beginnings of one person’s dream. Hand-to-hand marketing is the nature of the direct selling business

And the successes of those that have started billion-dollar companies are paralleled over and over among the millions of network marketing distributors. Look around at the top distributors for major companies today and you will find individuals, who in their prior lives, were teachers, plumbers, lighting salesmen — all with modest employment incomes and equally-modest prospects in life.

What it Takes: A Positive Mindset

This is a mindset business. Your attitude is often a self-fulfilling prophecy. There is some real truth to the veterans’ advice which notes, “If you think you can, you’re right; If you think you can’t, you’re right!”

So, the next time you think you can’t do it, think again! Make sure, however, that you have access to one of the following tools:  a bathtub, a garage, a bible, or a dream.

Do you want more inspiration? Watch these video titles from the 30+ year direct selling industry veteran, Jeff Babener:

Are There MLM Companies That Have Achieved Success on a Low Budget?

How Much Does It Cost to Start a MLM Company?

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Interviewer: Jeff, let me ask you this question. The industry has come a long way in the last several decades. Can you share with me your experience on how the industry is viewed today versus how it was viewed decades ago?

Babener: Yes, if you’ll indulge me a little bit. I’m going to give you a mini history of what happened in the direct selling industry and where the industry is going. From both a legal and industry standpoint, the origins of the MLM industry go all the way back to the 1800s to the days of the Yankee Peddler. Yankee Peddlers were direct sellers because they sold directly to the public.

From a legal standpoint, there have been three points in time in our industry where issues have become complicated and differentiated. In the days of the Yankee Peddler there was an issue with the product; there was the perception that salesmen were selling snake oil off the back of a wagon and then skipping town.

During the first half of the 20^th century, salespeople were going door-to-door selling vacuum sweepers or encyclopedias, like the famous Fuller Brush man. Whether they were selling high-ticket items, like vacuums, or encyclopedias, they would go in, make high pressure sales, and then disappear. So, during the first half of the twentieth century the direct selling industry had problems that related to the presentation to the consumer. The net result was that somewhere after the 1950s-1960s, the states adopted what was called the “Cooling-Off Rule.” This was intended to resolve the problem of high pressure consumer sales tactics in the home.

Interviewer: Buyer’s remorse, right?

Babener:  Yes. The Federal Trade Commission (FTC)’s “Cooling-Off Rule” basically stated that if a salesperson comes to your home and sells you something, and you pay a significant amount of money in the excitement of the moment, then you have three days to change your mind. It’s called the Three Day Right of Rescission. You have three days to cancel the transaction.

The methodology of direct selling changed in the 1950s, allowing distributors/marketers to not just sell person-to-person, but also they became allowed to recruit other people into their sales team. This was a novel approach. And, it all started with Mary Kay, Shaklee, and others.

This did really well in the 1950s. They stumbled upon a great method of marketing. This is partially what makes up our 30 billion dollar U.S. industry today with 16 million direct sellers, and perhaps, more than 100 billion in sales and 60 million salespeople around the world today. It was very successful.

Now, with successful models often come the charlatans. In the 1960s, along came a program called Dare to be Great, by Glenn Turner. Companies like this one were parading around as if they were direct selling companies but really all they were doing is moving money.

In the Dare to be Great program, individuals were invited to a seminar where they paid $5,000 where they were taught to recruit others to come to the seminar and pay another $5,000. Lo and behold, this marketing system really tainted the direct sales model.

They tainted the MLM business model so much that pyramid laws were adopted all over the country. The business model was tainted so badly that in 1975, the FTC looked at Amway and questioned its validity, accusing it of being a pyramid scheme. Although the company was not a pyramid scheme it still spent four years in litigation with the FTC.

In 1979, a FTC administrative law judge looked carefully at Amway, and for various reasons, proclaimed it not to be a pyramid scheme. Some of the reasons included the reasonable buyback policy for those leaving the business, the adoption of the 70 Percent Rule and the company’s fair customer rules.

The 70 Percent Rule basically stated that distributors shouldn’t buy more products for resale unless they’ve sold or used at least 70% of what was previously purchased. After reviewing Amway, the FTC judge decided it was a legitimate company. Had Amway not won that case in 1979, there would be no direct selling industry today.

Ever since, there has been a constant ebb and flow – a tug and pull – between our FTC and attorney generals and the MLM industry.

I’d say that until the 1990s, the MLM industry still had a negative image. People would read nothing but bad press about the direct selling, network marketing, party plan industry. There remained bad images because there were some abuses in the system. Yet, all of sudden in the 1990s, people started to pay attention to the direct selling model. Then, MLM companies started to explode around the world.

Companies like Avon today are doing 12, 13, 14,000,000,000 around the world in sales with 1,000,000’s of distributors. Amway doing better than 10,000,000,000 around the world. All of a sudden we have companies like Herbalife being traded on the New York Stock Exchange.

Shaklee was bought by Wall Street investment houses. Warren Buffet stepped into the picture, spending hundreds of millions to buy Pampered Chef.

All of a sudden the press began to turn positive, and we were known in the industry as entrepreneurs.

We were known as the industry that capitalized on the things that had become important. Everybody realized that all new jobs in America came from small businesses. Direct sales is a great micro business.

Just when our industry began to come into its own we went into a major recession when our stock market collapsed in 2008. Many companies might have thrown in the towel but some of the largest direct sellers, like Avon and Amway, saw it as an opportunity for their time to shine.

If you saw the 2009 Super Bowl you would have noticed something interesting. The first commercial of the Super Bowl was an Avon commercial. And, it wasn’t a commercial for the company’s products, but for its opportunity. Avon was making a statement that they were credible and they were serious. They were telling viewers that they had an opportunity for you. They were the new Plan B.

This resonated with folks who lost their 401(k)’s, saw their retirements disappear, their bubbles burst, or had reach glass ceilings. The company was telling viewers that they had something real to offer; a good part time business with good products.

Avon, of course, stuck around. The national anthem was then sung by Jennifer Hudson, the spokesperson for Avon. This was not a mistake. Avon had realized that Amway had spent a fortune on promoting its brand. Whereas, Avon had been absent on its branding for some period of time. The company began taking great pride in its products and its successes.

While America was having problems around the world with all of our money going floating away, guess what has been one of America’s most successful exports? We have taught the world direct selling. We have taken it everywhere. Direct selling is almost like basketball. It is indigenous to America, but it does well in Japan and China. Even in China, MLM isn’t allowed, and the industry still does well.

Today, Amway does billions in sales. All of a sudden there was a message being heard on Wall Street. MLM companies were being traded on the NYSE. The industry came into its own.

When you have companies like Excel sign on four million customers, or Network 2000 that sign on two million customers for Sprint, or you see major companies, from Texas and other states selling deregulated energy, and having tremendous success then there is some pride to be taken there.

Everybody is discovering that the principles behind direct selling, network marketing, MLM, and party plan. This method of marketing can be quite successful if done with integrity and done with ethics. And today, the industry is now very well accepted. And it’s also well accepted around the world.

Interviewer: Awesome. Thank you for sharing that.

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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.

Interviewer: Talk to me about what makes a MLM company successful. I know you’ve worked with some of the biggest names in the industry. You’ve been in this business for a very long time. So you’ve got a real unique perspective on the industry because as you worked with so many successful MLM companies. I bet from your own point of view, you see some of the things that companies are doing well and some of which they can improve on. With all of that collected experience, tell us what makes a company successful?

Jeff Babener: You know, we often hear about the newest sizzling compensation plan. I’m going to say that a good compensation plan is one that pays fairly and proper remuneration is a given. Your company can’t go anywhere unless you’ve created your compensation plan correctly.

Interviewer: So, you got to have a good compensation plan…

Jeff Babener: It should be good and it should be fair. But I have to tell you, a company that touts its compensation plan is often using that as an excuse to cover up for other elements that are missing.

Interviewer:  Got it.

Jeff Babener: What drives the success of direct selling companies, that we have seen, has been high quality products and services. Products and services that stand on their own in the marketplace, something that distributors and consumers bond well with.

Representatives and consumers bond with products and services. They bond objectively. They bond emotionally. So, bonding to that quality product is really important.

Secondly, the people who run the company, for better or for worse, are extremely important. When the distributors of Mary Kay sat in the audience and listened to Mary Kay speak, each of them believed that she was speaking directly to them. There is no substitute for having a connection with the leadership and founders of the company.

Thirdly, the company’s vision is important. What are they doing? Do distributors want to do something good in the world? That is why companies that sell health products, or that sell transformational products (like financial services) resonate so deeply with people. We live in difficult time. Companies that participate in philanthropic or charitable programs connect passionately with the distributors.

When Mary Kay started her company, people may have thought that she was in the cosmetics business. But, what she was actually in the business of empowering women. That is why Avon hosts marches for cancer research.

There must be a vision, a mission or a calling. There must be something greater than a single person for everyone to rally around. People always relate to projects larger than themselves.

Prior to my coming here today, just before we were going to do the interview, I saw a picture of Babe Ruth on the wall in your office.

Interviewer:  Yep.

Jeff Babener: …Looking up the bleachers, hitting a home run… Now, there is a man who transcended all sport. Every person in America relates to Babe Ruth. There are times and there are people who transcend what they’re doing. And they give meaning. They make you feel good. They give you a purpose. They give you a goal. And they drive you to be a better person. Babe Ruth hit home runs, but he did much more than hit home runs. I’m assuming that’s one reason that you put his picture in your office.

Interviewer:  Yeah, he’s a guy that only knew how to hit home runs and grand slams.

Jeff Babener: And, these things happen only a few times in our lifetime. Along comes a John Kennedy who will inspire people. You can’t explain why, but they will do it. And then a MLM company will come around that can do the same thing, which is important, spread inspiration. And that’s the last issue I wanted to bring up.

The amount of time and expense that you spend on training your sales force and your team leaders will be well paid because distributors who join companies not only need to relate and bond with the people who run the company, they need to bond with the people who brought them to the dance, the upline distributors. And those are the leaders of the company, the sales leaders, and they basically are the glue that holds everything together. Every ounce of strength and training, every penny that you spend on really developing those people into leaders, is a good investment.

It comes down to having a good, fair compensation plan that can motivate the right kinds of behaviors. The right kind of product that distributors and customers can bond with and that is a need in their lives.

And, you have got to have the right kind of owners, the right kind of people with a vision to do something greater than themselves. And, training. You must spend the time making an investment in people. You must train them and help them understand the company and how to achieve their own success. You must create the opportunity for everyone to dance together.

Interviewer:  Thank you.

For more information on how to create a successful MLM company, visit the following links:

MLM Consulting: How to Build a Successful Direct Selling Company

MLM Consulting: Starting Your MLM Company

FREE MLM Start-up Manual: Starting and Running the Successful MLM Company

The MLM Startup Conference: Starting and Running the Successful MLM Company Conference

Factors that Make a MLM Company Successful Video

Understanding the Basics in Order to Succeed In Direct Selling – Companion Video to this Blog Post

MLM Legal on iTunes

MLM Startup – The Basics

Or, read some of our other blog posts on success in network marketing, MLM, direct selling, and party plan:

Are you Starting a MLM Company?

An Interview with Industry Expert and Advocate, Jeffrey Babener

It’s Passion that makes a MLM Company Successful

The Top Two Reasons Why MLM Companies Fail

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

Passion, Patience, Persistence – Attitude in Direct Selling

Four Factors that Make a MLM Company Successful

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

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

How Much Does it Cost to Start a MLM Company?

The Next MLM Startup Conference in Las Vegas – May 16th & 17th, 2013

Choosing the Right Product for Your Direct Selling Company

Where to Find MLM Startup Tips and Answers from an Industry Expert

The Nine Basics You Need to Understand in Order to Succeed in MLM – Interview with Jeff Babener

Gaining Experience in MLM – Possess it or Buy it?

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 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.

Hi, I’m Jeff Babener of MLMLegal.com, and I’d like to talk to you today about your trademark. Imagine living your life without a name. To some extent, you define yourself and your existence by your name. Your trademark, in a sense, is your branding for life.

When others think of you they think of your name and vice versa. Your choice of name for your MLM company is equally important. Not only will you brand your business and product but what may be worthless today will be your most valuable asset in years to come. Just ask Coca-Cola, Marlboro, Microsoft, Avon, or Mary Kay.

And so, your company name deserves special emphasis in the beginning. A trademark search by your MLM lawyer is a must. You don’t want to be told three years down the road that you must give up your name because you did not bother to conduct a trademark search. It would be a devastating blow to your business. Also, it is essential that the name that you choose will suit expanding product or service offerings down the road.

So, what’s in a name? Everything.

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:

MLM Consulting: How to Build a Successful Direct Selling Company

MLM Corporate Startup Essentials: MLM Trademark

It’s Our Name – Live With It

The Educated Networker: Trademarks and Network Marketing

Comparative Advertising

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

Make sure to visit our blogs for the latest information on the direct selling industry: MLMLegal Blog Home and MLM Attorney Blog Home. HINT: Chose a category to narrow your search for discussion topics!

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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.