This Video Explains Which Statement is True: Celebrity Endorsements Improve Marketing or Celebrity Endorsements are 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 is a user and whether or not the statements of the celebrity appear as truly authentic or merely a “pay for endorsement.”

The use of celebrity endorsement is far less successful in the direct selling industry. In fact, the advertising model for MLM is quite different than conventional advertising. In conventional distribution, such as retail stores, internet or broadcast media, companies pay advertising dollars and endorsement fees to promote the brand. However, in direct selling, the commissions and rewards paid to distributors are effectively the advertising

Continue reading »

The MLM industry has, during the last 20 years, developed positive working relationships with regulatory agencies such as attorneys general and the FTC (Federal Trade Commission). There was a time, however, back in the 1970s, when the FTC challenged the legitimacy of the direct selling industry as being a pyramid scheme. They accused Amway of operating illegally and Amway prevailed in a very famous 1979 case [below] where it was held that the network marketing industry is a legitimate business model and the business opportunity is not a pyramid scheme.

No legal ruling has been more impactful on the direct sales industry than The Landmark Amway Case.

Afterwards, regulatory agencies and the industry went quiet until the 1990s when it was questioned whether or not product-using consultants were a legitimate end-destination for products or whether consultants were simply retail customers. There has been an ongoing tug of war between the MLM industry and the FTC in terms of determining whether or not personal use should have an impact on a company’s legitimate operations. The industry, with the cooperation of attorneys generals in more than a dozen states, were able to amend legislation in those states to recognize that personal use of product by distributors is a legitimate end-destination, just as if it were a retail sale.

Continue reading »

Have you finally decided to launch the network marketing business of your dreams? Or, have you decided that it’s time to take another look at your current MLM company to see how you can improve, grow and expand your business? Have you finally decided to launch the network marketing business of your dreams? Or, have you decided that it’s time to take another look at your current MLM company to see how you can improve, grow and expand your business?

Babener & Associates/, with over 30 years in the legal business, offers an excellent and affordable resource for those who are starting or running a direct selling company: The Starting and Running the Successful MLM Company Conference. This seminar offers MLM startup entrepreneurs a place to meet a plethora of network marketing industry experts — all in one place — who will help educate you in the corporate areas that are important to you, such as software, legal, technology, recruiting, raising capital, or designing your compensation plan. Visit our speaker page to learn more about the speakers and the topics that they will be covering.

Attendees will also be in the same room with around 100s of other established and entrepreneurial MLM companies who help to provide encouragement, advice and support.

All attendees are educated about the network marketing industry, how to grow their companies, to are able to meet experts in the industry who will help to coach them on the MLM industry.

Continue reading »

Will the stock market rise tomorrow? Who will win the Kentucky Derby? If one knew the answers these questions, he or she would be rich beyond imagination. How much one might earn in a compensation plan is subject to too many moving parts to make any sort of accurate prediction: the compensation plan itself, percentages paid on product, profit margins of product, personal sales, down line sales, the factors are endless. Two important resources are available that will give you a good place to start on this arithmetic: (1) leading companies post average earnings disclosure charts which indicate the average earnings for consultants at various levels and stages of their direct selling program; (2) many companies provide online earnings calculators which allow consultants to plug in their own assumptions on their personal and group sales and activity, which are then used to calculate the payout based on their expected sales performance. These aren’t fool-proof tools but they will give you realistic expectations on potential earned income.

It’s important to be honest with yourself as well. Very few consultants make it ‘big time’ in direct selling, and that is because sales is hard work, difficult work and many give up shortly after running through their warm market (friends and family). But if you’re the type that loves to sell to every person that you come across in your daily life then you may be a great candidate for a consultant who earns really high auxiliary income.

Continue reading »

Many network marketing companies are rightfully concerned about consultants making unauthorized medical and earnings claims on their own websites, as well as creating keyword confusion in the search engines. Therefore, many leading MLM companies provide authorized replicated websites for their consultants and actually prohibit individually-created websites. Therefore, if you’re a consultant, chances are high that you will not be allowed to purchase, design or build your own website. Instead, you’ll be given access to your own replicated website, provided by the company, which is a website that looks much like the company’s main website, but has a unique URL that you can send your customers to so that they can order products through you.

The primary reasons why companies don’t allow consultants to host their own websites are:

Continue reading »

One common question that we hear is in regards to event sales; such as fairs, kiosks, vending machines, and other alternative means of sales, am I authorized to sell my company’s products at such places and events?

Most companies would prohibit sales in flea markets, swap meets, vending machines, or garage sales. It is generally viewed that such locations dilute the value of the company’s products and opportunities. Companies typically prohibit sales in retail stores, but the purpose for this rule is to avoid the appearance of the company being in competition with the direct selling channel of its distributors, a model that is really based on person-to-person marketing.

Continue reading »

MLM Expert Attorney, Jeff Babener offers ten FTC vs. Vemma litigation bullet points.

MLM Expert Attorney, Jeff Babener offers ten FTC vs. Vemma litigation bullet points.

On August 17, 2015, the FTC filed a complaint in U.S. District Court in Arizona, seeking a permanent injunction against Tempe-based Vemma International Holdings, Inc., a long-time direct selling marketer of health-related products. The FTC was successful in obtaining a temporary restraining order, which shut the company and froze its assets. Further proceedings for a hearing on a preliminary and permanent injunction and other relief were set to the future.

Such a scenario has been a common approach for the FTC. The most recent actions resulted in permanent injunctions against BurnLounge and Fortune Hi-Tech Marketing. For a summary of the most significant federal actions during the past few decades, please see:

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

Jeffrey Babener (2013)

The primary accusation against Vemma is that its program focused on recruitment rather than sale of product to the ultimate user, thus rendering the program a pyramid scheme and a deceptive practice under FTC legislation. In addition, the FTC has charged that Vemma is deceptive in its earnings representations.

FTC vs. Vemma Litigation Bullet Points:

  1. (a) This case affirms the BurnLounge standard requiring emphasis on sales to ultimate users, which includes nonparticipant retail customers and personal use in reasonable amounts. Primary motivation for distributor purchases should be destination to ultimate users and not to qualify in the plan for compensation.

Continue reading »

MLM Startup Conference

The next MLM Startup Conference takes place October 22 and 23, 2015 in Las Vegas.

With the costs of the compensation plan, attorney’s fees, software, hiring staff, recruiting consultants, creating/designing products, the list goes on… starting a direct selling company can be expensive and difficult! We understand how complex it is to tackle a MLM startup. That’s why we offer the Starting and Running the Successful MLM Company Conference.

We offer MLM entrepreneurs a way to network with experts from all sectors of the direct selling industry: legal, recruiting, technology/software, compensation plans, funding, generate leads, website and back office, business model, and more – all in one place, for one affordable price ($195 for the first attendee, each additional is $150).

So, if you’re starting a MLM, network marketing, direct selling company, or just thinking about starting a MLM company, come join us at the MLM Startup Event/Seminar in Las Vegas! The Hosts are Business Consultant and MLM Legal Expert, Jeff Babener, and MLM Compensation Plan Consultant, Mike Sheffield.

Our next conference takes place October 22 & 23, 2015 in Las Vegas (who doesn’t want a good reason to go to Las Vegas?). We even offer the Innovation Campaign for those who are on an even tighter budget.

Visit our website,, or our conference page to learn more and to see the full line-up of speakers. Read testimonials and watch our invitation videos. Anyone who is starting or running a MLM, network marketing, direct selling, party plan company is welcome to attend.

Call us at 800-231-2162 to register.

Continue reading »

For this issue, it is best to look at two phases of MLM companies, start up and maturity.

Although many things can go wrong in a startup direct selling company, two factors are repeated with frequency for the failure to launch. The first factor is inability to recruit. This business is based on recruiting a successful sales force to market products. (Obviously, there are many important factors ranging from logistics to personnel to technology to quality control to distribution… and all these can go wrong as well.) It should be noted that the need for capital is in inverse proportion to the ability to recruit. A MLM company that can recruit is often positioned for fast growth and may even become a cash cow. If the company does not have that native ability, it needs sufficient capital to hire the talent to make it happen. And in the absence of the recruitment asset, a company should plan on a much longer trajectory to profitability.

And the recruitment challenge dovetails with the second major reason that companies fail at the onset: lack of adequate capital or funding. Many companies start the business without adequate capital to allow for a one or two year run to become profitable. In fact, many companies assume that they will be profitable within months or that they will not need capital for growth. The lack of buffer capital to survive the early unprofitable days of a company is a prescription for early failure.

Continue reading »