A number of states have multilevel distribution statutes that require registration.

In addition, 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 have a physical presence such as manufacturing facilities, warehouses, offices, or employees. The corporate laws of most states provide that a company is not “doing business in the state” merely because it sells through independent distributors in that state.

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Potential Distributors are quite literally all around you. Friends, relatives, neighbors, etc. Consider using this list to develop a prospect list and remember, these folks may know others who are also potential customers:

Workplace Prospects:

- People who don’t like their job

- People who are intrigued by new opportunities

- People who are in a similar line of work, like sales

Neighborhood Prospects:

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Are you asking yourself what is more important, the compensation plan or the product?

It is common for distributors to be recruited based on an attractive compensation plan. Instant monetary benefits, promises of instant wealth, and enormous payouts are often advertised by companies. However, no company has ever been successful based on its compensation plan alone. An out-of-this-world compensation plan often gives the company an initial jump start, but time will prove that a great compensation plan alone isn’t enough to sustain a company.

Of course, a competitive compensation plan with great incentives are important, but “ground breaking” plans are more often a mirage for poor products, that you may have a hard time selling, or poor company management.

In the short term, “unprecedented” compensation plans may work, but they are not sustainable in the long term. Great products, which attract quality distributors and customers, and an organized management team, are what carry a company long-term.

As a distributor, you must decide what your objectives are when beginning your network marketing, direct selling, MLM business. Here are ten questions to help you meet your sales goals and reach your full sales potential:

1) In your first year, what is your objective as a distributor? It is important to establish long-term goals and remind yourself of them frequently. If your objective is to sponsor 25 distributors in the first year, then you must recruit an average of two people each month. Once you develop long-term goals it is easier to see, and therefore reach, the short term goals.

2) How many people are you going to need in your organization? If your answer to the first question is monetary, then you will need to determine how many people you will need to recruit in order to meet your sales goals. Be sure to study the company’s compensation plan to understand what you need to do in order to succeed.

3) How much time do you feel it will require each week? Depending on your objectives, you may decide to spend ten hours a week or 30 hours a week recruiting, advertising, and selling. Keep in mind that most companies state that home parties average around 1.5 hours. 

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Prospective distributors often ask how they can find out if a MLM, network marketing, or direct selling company is legal or if it’s a pyramid scheme. There are a number of ways to research the company yourself; to be sure of its legality before joining. Here are some ways which you can investigate an MLM company:

1) Check to see if it is a member of any industry associations, like the DSA or DSWA.

2) Call your state’s attorney general’s office or consumer protection division. Most states regulate direct selling companies through these agencies.

3) Check with the Better Business Bureau.

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With the rise of comparative advertising in the United States, litigation has followed further defining the rules. Industry leaders state that according to the rules, a comparative advertiser may generally use a competitor’s trademark when advertising the seller’s product, as long as the trademark is used in a truthful way; it is not likely to create confusion in the consumer’s minds as to the source of the product being sold.

Visit www.mlmlegal.com for more information on the legal environment.

Here is a list of some very popular and highly-regarded books about multi-level marketing, direct selling, and network marketing, written by leading MLM attorney Jeffrey Babener:

Network Marketing: What you should know

Network Marketing: What you should know

A brief overview of the table of contents include:

An Overview of an Exciting Industry

An Introduction to Network Marketing

Why Millions of People are Getting Involved

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The MLM Startup Conference in Las Vegas!

October 27th and 28th, 2011 – 9:00AM-4PM and

One-on-one time with the speakers from 4PM-7PM, both days

The MLM Startup Conference is an educational conference for executives of startup and existing MLM, Network Marketing, Party Plan, and Direct Selling Companies.

The industry’s top experts will help you:

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MLMAttorney.com is a great place to find accessible information about the direct selling, network marketing, multi-level marketing, and party plan industry. Here you can watch videos that address distributor questions, MLM startup queries, and direct selling history.  Download the MLMLegal iTunes application that brings MLM company profiles, MLM laws in all fifty states, and much more to your fingertips. Read informative articles that answer common questions, explain the details of compensation plans, and offer information on how to start your direct selling company. Be sure to check out leading industry expert, Attorney Jeffrey Babener, on Facebook, Twitter, Myspace and more, and also check out our next MLM conference that brings top industry experts to one convenient location (only for executives who are starting or running a direct selling company). We have many more exciting features available at MLMAttorney.com and are adding more all the time. Visit us often and definitely don’t miss the Best MLM Resource on the Web: MLMLegal.com.

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