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.

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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, www.mlmlegal.com, 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.

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A post on Facebook is really no different than a mass email, by www.mlmattorney.com.

A post on Facebook is really no different than a mass email.

Clearly, while consultants are with a company they are asked not to get involved in raiding activity. Network marketing companies have mixed opinions on post-termination behavior. Most companies ask that consultants not raid the downline for a certain period of time after they stop consulting for the company. Companies that ask this of their consultants argue that the consultant’s Facebook profile is basically an email list; a post on Facebook is really no different than a mass email. Not many companies specifically outline post-termination rules in their policies and procedures; however, most companys’ position on the issue is effectively the same as if you started sending emails to everyone in your downline once you left the company.

Several approaches have been noted, including the drafting of agreements where companies and distributors have bifurcating social media pages. Basically, consultants would have a personal and professional Facebook page. This causes a bit of a dilemma because many consultants will make close friends with those in their downline. Perhaps not everyone fits into a personal or professional-only account. Companies look at it as more black and white. Companies see it as a consultant holding a lengthy email list, whether it be on Facebook or Twitter, etc., and once they’ve sent our an announcement saying “come join me at my new company…” then it is just as if they are sending a mass email to their downline. Both perspectives are understandable, and so far, there is no industry-wide solution to the problem.

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Every business should be concerned about market saturation. The direct selling industry is no different.

The direct selling industry thrives on marketplace competition in order to continue to deliver high-quality goods and services, especially as the population grows and consumer demands change.

In one significant legal case, regulators argued that a direct selling company was bound for failure by the prospect of saturation in the marketplace, both for product, as well as for distributor recruitment. In that landmark case, the court took notice of the concept of “saturation,” but it rejected the concept as an obstacle to success of the particular direct selling company involved. The court took note of a large market for particular products and explained that the direct selling company was merely taking its place in the competitive marketplace.

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Sign up for the MLM News Global newsletter for top headlines, news stories, scam alerts, videos, articles, and more information on the network marketing industry, by www.mlmattorney.com.

Sign up for the MLM News Global newsletter for top headlines, news stories, scam alerts, videos, articles, and more information on the network marketing industry.

There are a lot of outspoken bloggers and critics online, as well as negative opinions floating around the social networks, but the positives drown out the negatives. It’s not hard to find a loud voice criticizing the direct selling industry through a quick Google search. And it is true… there are many pyramid/Ponzi schemes, primarily internationally based, that parade themselves as MLM/direct delling… and they are not. They are merely pyramid headhunting recruitment schemes that often use bogus products and services as an excuse to move money. The entire emphasis of such organizations is to cause investors to pay money and cause others to do the same, with a thin veneer of an actual product or service. In fact, the revenue to pay commissions instead comes from distributor payments and not sales to the ultimate user.

Despite this, the facts remains MLM and direct selling are a major part of the fabric of commerce. Statistics on 2014 sales, compiled by the World Federation of Direct Selling Associations, indicate global sales of $183 billion and 100 million distributors. In the U.S., there are 18 million distributors posting $35 billion in sales. Numerous direct selling companies are traded on the NYSE.

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MLM News Global - A Journal of Contemporary News, Business and Legal from a Trusted Source, by www.mlmattorney.com.

Sign up today at http://www.mlmnewsglobal.com/.

This newsletter offers recent news, videos, company profiles, and weekly articles delivered to your inbox on a timely basis. Each newsletter contains top news stories in the network marketing industry, the most recent MLM scam alerts, timely articles on the direct selling industry, and so much more.

Make sure you’re not the last to know about top MLM news stories, or to hear about the latest scam reports. Our timely headline reporting will keep you up-to-date on stories that affect everyone in the network marketing industry.

We will also make sure you receive a “Video of the Week” on industry educational topics, such as distributor education, industry Q&A, executive interviews, MLM startup, and pyramid schemes.

Each newsletter features the profile of a direct selling company, like Avon, Mary Kay, and Amway, or perhaps a startup multilevel marketing company that you haven’t heard about yet! MLM News Global also highlights two featured articles on industry-related topics, such as pyramid schemes, compensation plans, recruiting, lead generation, legal analysis, software, and more.

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Your cost of goods is calculated as your acquisition or manufacturing cost. The more frequent question we come across relates to pricing. Most MLM experts agree that you must have adequate margins to pay commissions and to make a profit. Different products and services carry different profit margins. In addition, smaller margins may be satisfactory with high-priced products because there is still room for profit. Most MLM companies are likely to pay total commissions equal to between 30 and 45 percent of the price sold to distributors for resale, or prices for which consumers buy directly from the company. A typical company will try to achieve a minimum 5-7 times markup to allow for commissions, overhead and profit. Typical markup for resale by distributors is 25% of their purchase price. A good place to visit this issue is at the MLM Startup Conference, offered by www.mlmlegal.com, where experts discuss margins, pricing, profit, proformas, and a whole lot more.

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We have hosted more than 70 national conferences on starting and running a direct selling, network marketing, MLM or party plan company. We have started and advised many of the leading companies in the industry and we have a “big picture” that may be difficult to find elsewhere. We are big believers in education and our website, www.mlmlegal.com, is hopefully evidence of this, with hundreds of articles, cases, statutes, and scores of videos. We take a particular satisfaction in helping entrepreneurs pursue their dreams and the consequence is often the creation of thousands of jobs and opportunities. And at our conferences, we have started many companies that are today, household names. It has been a pleasure and honor to assemble professionals in these conferences to assist individuals to create “something from nothing.”

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Are you interested in expanding your network marketing business? Are you curious as to know what the best MLM companies are doing to achieve success? Do you want to make sure that you have the right product and marketing practices?

The fastest growing network marketing companies all share the same characteristics. The following are four key factors that determine growth of network marketing companies, by www.mlmattorney.com.

The fastest growing network marketing companies all share the same characteristics. The following are four key factors that determine growth of network marketing companies

The fastest growing network marketing companies all share the same characteristics. The following are four key factors that determine growth of network marketing companies:

1. Find the Right Niche Market

Finding a niche market is the first prerequisite for significant MLM corporate growth. A product that is similar to dozens of others will be very difficult to position properly in the network marketing industry.

The fastest growing network marketing companies are innovators. Successful MLM companies find an empty niche market or they create the need for a new market. This way, MLM companies are capable of guaranteeing their market positioning. Having to compete against well-established and well known direct selling companies is going to make your startup endeavor more difficult.

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