A company should only pay commissions on products and services offered to the general public.

Generally, network marketing companies mandate an upfront sales kit cost, typically in the $49-$99 range. This is an at-cost fee for sales and marketing materials support. The reimbursement cost is passed on to distributors. It is not a profit center for the company and no commissions are paid on such required fees. Almost all regulatory agencies and MLM statutes recognize and validate this practice. Beyond the at-cost sales kit, companies typically offer optional sales tools to distributors. Because support products are optional, they do not need to be at-cost, but any sales support tools should not be commissionable. A company should only pay commissions on products and services offered to the general public.

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.

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

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:

www.mlmlegal.com

Visit our blogs:

http://mlmlegal.com/MLMBlog/

http://mlmattorney.com/blog/

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.

Therefore, the proper advice given to companies is that you should only pay commissions on the sale of products or services that are sold to the public. You should not be paying commissions relating to the sale of sales aids or training materials.

The following articles may also prove helpful to MLM business owners:

MLM Law in 50 States

Is it Appropriate to Pay Commissions on Sales Tools and Training? [Video]

Selling Sales Tools

For more information, be sure to visit www.mlmlegal.com – the best MLM resource on the web – and www.mlmattorney.com.

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