Mandated kits are typically in the $50-$100 range.

Frontloading generally refers to a process in which a MLM company, or a sponsoring consultant, encourages a new consultant to purchase far more than is commercially reasonable under the circumstances. Often the “push” is explained to the recruit as necessary to qualify in the compensation plan. This is an unacceptable practice is often one indicia of a pyramid scheme.

On the other hand, virtually all regulatory agencies recognize that purchase of an “at cost” sales kit is an acceptable practice in the mainstream of leading direct selling companies. Such mandated kits are typically in the $50-$100 range. They generally entail “hard copy” or online supply of sales and marketing materials as well as ongoing, updated sales and marketing materials for one year. Typically the mandated sales kit does not include product and generally a company offers an optional deluxe kit that may include product. Such an optional kit, which is often referred to as a “fast start” kit, may contain several hundred dollars of product. This is not unusual. Although the same regulatory standards on upfront, mandated purchases are applicable to party plan companies as they are to other companies; it is not unusual to see party plan companies mandate a beginning starter kit that contains a wide array of products, with a price tag several hundred dollars. Regulatory agencies are very liberal in their view of such mandated purchases in party plan companies because party plan companies are so overwhelmingly retail-oriented and the movement of product to retail customers is the norm, and not the exception.

MLMLegal.com has launched the Innovation Campaign for its February 2014 MLM Startup Conference. Read how to get your two free tickets by clicking HERE!

Continue reading »

As a consultant, where did you first begin selling your products/services?

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 friends, family, social acquaintances, co-workers, members of your church, religious group, fraternal organizations, etc. In other words, sell where you are the most comfortable. Generally, this includes territory close to home. Generally speaking if you sell products/services at a distance then it is because you have connections. As you mature, you may venture into other territories, but it likely will be through social networking or by having an online presence.

As a consultant, where did you first begin selling your products/services? How would you rate your success during your first year as a consultant?

Continue reading »

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

In celebration of our 66th annual conference, we are offering two complimentary tickets* – worth $345.00! – to attend the esteemed event in Las Vegas, Nevada.

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 conference for executives of startup and existing direct selling companies. In celebration of our 66th conference, we are offering two complimentary tickets* – worth $345.00! – to attend the esteemed event in Las Vegas, Nevada.

In our ongoing effort to offer the absolute best network marketing conference available, we invite you to participate in our February 2014 Innovation Campaign. To receive your two free tickets, fill out our Innovation Campaign form below.

Continue reading »

don't forget to tell us your tips on how you organize and prepare for tax season!

Don't forget to tell us your tips on how you organize and prepare for tax season!

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 office space, and business and travel expenses on your taxes (within reason)?

Network marketing executives, do you know why MLM companies are not excluded from paying sales taxes? What is your approach to collecting sales tax?

The IRS offers a significant amount of advice for direct sellers when it comes to taxes. The IRS defines “direct sellers,” outlines their potential income sources and common expenses, as well as provides many tax tips for those who may need to refresh their memories for the 2013 tax season.

MLM expert attorney, Jeff Babener, discusses the issues of taxes in network marketing in his video: What are the Central Tax Issues for MLM?

Lastly, visit the mlmattorney.com tax page for links to the necessary publications/forms, the IRS withholding calculator, and many other small business resources. And, don’t forget to tell us your tips on how you organize and prepare for tax season!

Continue reading »

Tell us how your network marketing company is streamlining its technology. Has it eased the sales process or made it more complicated?

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 company, as well as new devices, such as tablets, as sales and recruiting tools. Industry experts say that enhancements in tablet communication software enable consultants in the field to achieve greater success. Tablets enable salespeople to give more striking presentations, lower attrition rates, increase sales, as well as make ordering and enrolling new consultants easier. And, industry experts agree that the network marketing companies that embrace the newest technology will attract a new crowd of independent business owners and also the highly-desirable top sellers. Companies that fail to adapt to the latest technology may end up losing its most valuable salespeople to more industry-leading direct selling models.

Tell us how your network marketing company is streamlining its technology. Has it eased the sales process or made it more complicated?

Continue reading »

Trademark of Herbalife

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, Test-Aankoop, that the international nutrition company was operating as a pyramid scheme.

Herbalife was established in 1980 and operates in over 75 countries. The company is the world’s fifth top direct selling company, with 2.7 million salespeople in roughly 79 markets, reports mlmlegal.com.

For additional information, read the following articles:

Herbalife:  Belgian Appeal Court: Herbalife is No Pyramid:  Validates Legitimacy: The Next Chapter in Recognition of Personal Use

**See a translated copy of the actual Belgian Court of Appeal Herbalife ruling.

Herbalife Statement Regarding Belgian Appeal Court Ruling

Herbalife: Belgian Court Overturns Pyramid Ruling

Herbalife says Belgian appeals court reversed pyramid scheme finding

Continue reading »