MLM Industry

News & Analysis as of

The Origin and Operation of the Famous 70% Rule Explained

The 70% rule derives from the 1979 FTC Amway decision in which an administrative law judge recognized that Amway’s 70% rule helped prevent inventory loading (it is not a retailing rule). Basically, the Amway rule provided: at...more

What Is the Difference between “Sponsoring” and “Recruiting”?

Although the terms sponsoring and recruiting are often used interchangeably, they actually have two different meanings. Recruiting is the act of searching and soliciting new distributors for the downline sales organization of...more

What do Startup Companies Think about Long Term Professional Relationships?

MLMLegal.com and Babener & Associates have been with many network marketing companies from the very beginning, from startup to stable. We were involved in early stages of a number of leading MLM companies, including some...more

How Important Are Celebrity Endorsements? Do They Help Marketing or Is It a Double-Edged Sword?

In the conventional advertising world, celebrity endorsement is very effective. Among the factors for effectiveness includes the fame of the celebrity, the connection with the product or service, whether or not the celebrity...more

What Should I Look for in a Company When Choosing Back Office Software?

Virtually all new startup direct selling companies utilized an outsourced technology solution for managing genealogies and commission payouts. In addition, such technology serves distributors by providing back office access...more

How Often Should Companies Renew Their Policies and Procedures to Make Them Relevant in Today’s Marketplace?

There are two issues that have surfaced in recent years: 1) social networking and 2) frequent migration of distributors between companies. With social networking concerns, companies have had to decide on positive protocol for...more

Challenges and Opportunities Facing Network Marketing Companies

We have a long-term perspective as a law office that has had three decades of experience in the MLM industry. In the last three years or so, developing trends have posed both opportunities and challenges for network marketing...more

SEC Brings Another Pyramid Scheme Action

Following the disclosure of the massive Madoff fraud, Ponzi scheme cases became a staple of SEC enforcement. More recently the agency seems to be focusing on another type of investment fraud scheme — pyramid schemes. At the...more

Raise Capital to Start Your Network Marketing Company

Raising capital to fund your network marketing startup can be tricky. In fact, there is no clear cut answer to finding funding. However, there are options available to MLM company owners. There are many giant direct sales...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

Photos of the MLM Startup Conference for Executives of Startup and Existing MLM Companies

And yet another successful network marketing Conference! In our February 2014 MLM Startup Conference we have covered such topics as recruiting, software, legal, technology, capitalization, compensation plans, lead generation,...more

Fill out the short survey to receive two free tickets (worth $345.00!) to the next MLM Startup Conference in Las Vegas!

MLMLegal.com Launches the Innovation Campaign for the February 27th & 28th, 2014 MLM Startup Conference! Fill out the short survey here to receive two free tickets (worth $345.00!) to the next MLM Startup Conference in Las...more

How Do I Find Top Distributors?

This is the million dollar question. The need for capital is in inverse proportion to your ability to recruit. Your network marketing company will either have hired that talent or you will bring on a vice president of...more

How to Develop a Compensation Plan

Understanding how to write a complete compensation plan is important for your network marketing company. Step-by-step guides found online are often incomplete and don’t provide you with the detailed information that you need....more

Concerns about Merchant Account Processing: Should I Have Only One Merchant Account?

This is a question for a MLM startup or existing company as opposed to a MLM consultant. For distributors who drive customers to their replicated websites, the company has in place credit card processing capability. For a...more

Press Release: Belgian Court Ruling Declares Herbalife Legitimate Operating Business

A Belgian appellate court declared December 3, 2013 that Herbalife is in fact operating in compliance with Belgian law, reports Yahoo! news. This ruling is in response to previous claims by the consumer organization,...more

If I’m a new consultant then should I focus on selling in areas where other distributors are successful or should I focus on...

It is often said that direct selling/MLM/network marketing is about first sharing your product and services within your spheres of influence, that is to say, first harvest the low lying fruit. This means calling upon your...more

New Video Segments from MLMLegal.com – Cross-examination of Dr. William Keep by Travelmax Trial Counsel, Jeffrey Babener

New Video Featuring the Cross-examination of Dr. William Keep by Lead Travelmax Trial Counsel, Jeffrey Babener Although Dr. Keep was called by the State of Kentucky as an expert witness to support the State’s case on...more

Gifting Club?… Run the Other Way…

A gifting club usually begins unintentionally between friends, family and neighbors. Unlike the traditional pyramid scheme, gifting clubs are not promoted as an investment by fraudulent financial advisers. Gifting clubs are...more

Common Questions from MLM Executives: What do I do with distributors who go passive?

It has long been recognized that there is high attrition rate among MLM distributors, perhaps as high as 80-90%. The vast majority of MLM consultants are part time and they join and leave for many reasons. The fault is not...more

Technology Changes How Consultants Sell in the Network Marketing Industry

Door-to-door sales are becoming the sales method of ancient times. As technology advances so does the network marketing industry. More commonly, consultants are using personalized websites, often provided by their MLM...more

Direct Sellers, Be Prepared for Tax Season! Understand Network Marketing and Taxes for 2013!

Tax season is right around the corner for direct sellers. Are you prepared? Consultants, have you kept track of your IRS tax deductions? Did you know that you can deduct such expenditures as meals, entertainment, home...more

MLMLegal.com Launches the Innovation Campaign for the February 2014 MLM Startup Conference!

Fill out the short survey here to receive two free tickets (worth $345.00!) to the next MLM Startup Conference in Las Vegas!** For over 26 years MLMLegal.com and Babener & Associates has hosted the most prestigious MLM...more

Introducing the New Multi-Level Marketing Governing Act

Taiwan has 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

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