MLM / Direct Sales Updates

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Ninth Circuit Agrees with FTC that Online Marketing Program Was an Unlawful "Pyramid Scheme"

The legal status of many membership programs promoted via social media and spam has been called into question by a recent decision of the U.S. Court of Appeals for the Ninth Circuit, which affirmed a judgment that one such...more

Nu Skin Fined in China for Improper Direct Sales Activities

The investigation was launched as a direct result of a series of news reports by the People’s Daily, China’s official newspaper released in January 2014, alleging that Nu Skin China had organized “brainwashing” gatherings,...more

Herbalife Hit with Civil Investigative Demand – Is the FTC Finally Turning up the Heat on Multi-Level Marketers?

For many, the announcement two weeks ago that the Federal Trade Commission has commenced a formal investigation into Herbalife was not terribly interesting. After all, nutritional supplement company Herbalife has been the...more

Introducing the New Multi-Level Marketing Governing Act

Taiwan had approximately 369 multi-level marketing (MLM) companies and a total of 3.09 million MLM participants as of December 31, 2012. Adjusting for people who participate in more than one MLM company, almost 12% of...more

Why Do Distributors Join, Stay or Leave a MLM Company?

If you are a network marketing company or a distributor, you know that recruiting and retention are the lifeblood of the business. What factors make companies successful and the distributors successful? Of course, a...more

Four Questions to Ask Yourself When Looking to Join a Direct Selling Company

1) Are You Outgoing? Network marketing is a great industry for outgoing people. Those who are uncomfortable asking friends and family to purchase products, or are generally shy, may want to consider other ways to earn...more

Eight Ways to Identify an Illegal Pyramid Scheme

The last thing you want to do is join an illegal pyramid scheme. Here are eight red flags to look for when considering joining a direct selling, MLM, network marketing opportunity: 1. Promotions where the business...more

What’s a downline? What is an upline?

The definitions of “upline” and “downline” can be rather simple to explain even though compensation plan structures are rather complex. Here we have provided a brief and simple explanation of uplines and...more

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

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...more

Why do MLM Companies have to Pay Sales Tax?

This is a long complicated story and not without ongoing legal dispute. Unlike mail order firms which are immune from sales and use tax, direct selling companies are viewed by state officials as having “nexus” (sufficient...more

What is “Front Loading” or “Inventory-Loading?”

Front loading is when a MLM company requires a consultant to purchase an unreasonable amount of inventory that cannot realistically be resold and/or used within a reasonable amount of time. Apart from general pyramiding...more

Distributor Q&A: What do I do with distributors who go passive in my downline?

MLM attrition is high. This is a fact of life. All of those distributors, who you have signed up, have competing demands on their time. So, if they go passive, it is not your fault. If that happens, you should give it a good...more

Distributors, consultants, representatives: What is the most common word for independent business owners?

Is there a correct term for 1099 independent direct selling distributor? Not really. As a general rule, distributors, consultants, representatives, independent business owners, etc. all describe a salesperson who sells...more

What Is the Benefit of Recruiting Experienced Consultants?

When you are starting your MLM, direct selling, network marketing, or party plan business, you’ll find that recruiting experienced distributors is often essential to your company’s success. And if you don’t have the...more

How much does it cost to start an MLM company?

The costs of startup vary widely, depending on the type of product/service being offered and the need for infrastructure. It is obvious that a company which is engaged in its own manufacturing, ownership of warehousing and...more

MLM Startup Conference for Executives of Network Marketing Companies – Feb. 27 & 28, 2014

The next Starting and Running the Successful MLM Company Conference is already scheduled for next year! On February 27th & 28th, 2014 we are hosting the MLM Conference for the 26th year! This is now our 66th annual conference...more

An Inside Look into a MLM Trial - Travelmax Trial Mini-Series Videos

Have you ever wondered what happens in an MLM trial? In this presentation, MLMLegal.com gives you a rare, front row seat into the complexities of an MLM trial. In more than six hours of video, partitioned in more than...more

What’s the difference between MLM, network marketing, party plan, and direct sales?

Actually, they all fall under the general umbrella of “direct sales.” Historically, direct selling only involved direct person-to-person sales, often door-to-door. In the 1950’s companies such as Amway, Shaklee and Mary Kay...more

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...more

As a consultant, what can I say about a MLM company’s nutritional/dietary supplement products?

As a general matter, MLM companies will be very specific about what distributors can and cannot say about the company’s products. Usually, this information will appear in the company’s literature. MLM companies can find...more

I joined a MLM company as a MLM distributor. What can I say about the company in my online marketing/advertising?

Each direct selling company has its own rules about what distributors can say and do on the internet. It is common for MLM companies to closely guard their trademark(s) and the company has the right to regulate the usage of...more

MLMLegal.com has released a seminal article by noted direct selling industry expert and legal authority, Jeffrey Babener

Herbalife: What Short Sellers Missed on the Way to the Press Conference… The Personal Use Issue in Pyramid Analysis; Who is an Ultimate User? An excerpt from the article and link to the full article at www.mlmlegal.com. ...more

8 Topics to Include in Your Business Plan to Help You Attract Key MLM Investors

Surprisingly, many of the giant direct selling companies in the industry today had humble beginnings, often with one individual’s dream. That individual usually had little or no money and became a MLM mogul after years of...more

FDA Notification for Permissible Structure/Function Claims for Dietary Supplements

MLM Distributors and MLM companies often ask about the notification requirements for permissible structure/function claims for dietary supplements, under FDA rules of DSHEA (Dietary Supplement Health Education Act). Here is...more

MLM Distributor Success – Knowing the Basics

There is no question that, over time, the MLM companies that have been the most successful in the MLM industry have involved distributors who have had a passion for the product, service and for what they are selling. A...more

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