The need for capital is in inverse proportion to your ability to recruit.

The need for capital is in inverse proportion to your ability to recruit.

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 marketing to help search for key first leaders, typically under some type of Presidential Founder Program, which will include protocols for products and rewards to key first leaders.

Distributors should first search their “warm market,” that is to say, family, friends, work, church, clubs, etc. Surprisingly, if one looks at the top distributors of many companies, it will be noted that they did not have experience in MLM, but rather their success was driven by their passionate bonding with product, management, sales leaders, and vision of

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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. Understanding the various compensation plans can be confusing and information online can be misleading or completely incorrect from a legal standpoint. Developing a compensation plan, or rewards plan or pay plan, which is right for your situation isn’t as easy as doing a Google search. The structure of your compensation plan is unique to your company and your business plan. Creating a compensation plan that fits your MLM company is complex and generally requires reviewing by a compensation plan consultant and a credible network marketing attorney.

This article will provide you some details of how you can get free and trusted information on how to develop your legal compensation plan. It will provide you with the information you need to easily research active compensation plans being used in the industry right now to compare with your rough draft. It will also provide you with links to online information written by experienced MLM industry experts.

1)      The first step to writing your compensation plan is to understand the various plans that are common in the network marketing industry. The webpage, How to Analyze Compensation Plans (MLM Compensation Plans – What you should know), provides visitors with an easy to understand explanation of typical compensation plans. Learn about

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A Vice President of Marketing should have a demonstrated record of building, managing, and sustaining network marketing sales organizations.

The two leading causes of MLM company failure are lack of capital and the inability to recruit. In fact, your need for capital is in inverse proportion to your ability to recruit. Many of the leading direct selling companies have been founded by individuals with long track records of building downline sales organizations. If you possess that talent, along with good product or service, you are well on your way. However, if you don’t possess such capabilities, it may be necessary to hire such talent, often in the form of a Vice President of Marketing.

A Vice President of Marketing should have a demonstrated record of building, managing, and sustaining network marketing sales organizations. You don’t just want a hand holder. You want an individual who has the capability of locating founding distributors and working with them to build a broad-based sales

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It is very illegal to pay headhunting fees, i.e., paying commissions merely for distributors to recruit other distributors.

We are often asked by executives starting a network marketing company if they can have consultants earn income by referring others and if it’s legal.

Effectively, multilevel marketing is the sale of products through person-to-person, “referral” marketing. It is very illegal to pay headhunting fees, i.e., paying commissions merely for distributors to recruit other distributors. However, if a distributor builds a sales organization and receives override commissions on the sales activity of those in his or her downline, this is the essence of multilevel marketing, and is quite acceptable, assuming all other elements of legitimate direct selling (vs. pyramiding) are in place.

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!

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Federal Trade Commission Logo

The combined total the companies are ordered to pay is approximately $34 million, which the FTC will use to refund consumers.

Early January 2014, Sensa and three other national marketers of fad weight-loss products settled charges raised by the FTC in an effort to stop “misleading claims for products promoting easy weight loss and slimmer bodies.” The weight-loss company, Sensa, will pay $26.5 million to settle charges that accused the company of exhorting consumers in their “sprinkle, eat, and lose weight” campaign. Charges were also announced against the companies L’Occitane and HCG Diet Direct for making unfounded promises to consumers. The combined total the companies are ordered to pay is approximately $34 million, which the FTC will use to refund consumers.

To read the FTC’s full press release, click HERE.

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!

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