The the March issue of The World of Direct Selling‘s newletter, the editors asked, “‘Do you think the direct selling industry has an image problem that needs to be worked on? What makes you think that way?’ was the question we asked some of the experts.” MLM industry expert, Jeff Babener, provided his two cents, as shown below:

Jeffrey Babener, Legal Counsel at Babener and Associates

“Short term answer: Absolutely. However, as noted by famed Univ. of Chicago economist, Milton Friedman, the future is longer than the present. In the current financial markets furor of hedge fund titans bashing direct selling, with the financial press piling on, a slightly dejected industry should take note that in the ‘big picture,’ it actually isn’t doing so bad at winning the ‘hearts and minds’ of consumers and potential recruits. With some blips, long term image trends are good. In the past two decades, just witness direct selling’s extraordinary international expansion, its emergence on the NYSE and as acquisition target by NYSE companies.”

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We are often asked a question about the past and the future of direct selling, network marketing and the FDA. It’s a good question because so many major players in our industry, ranging from Herbalife to Nikken, to Melaleuca to Amway, are driven by health products and dietary supplements. The direction of the industry has generally been a very good one. Until the mid-1990s, companies were very concerned about what health claims they could make about products. It came to a head in 1994 when the FDA’s strictness regarding claims became so difficult that Congress almost unanimously passed a bill called “The Dietary Supplement Health Education Act (DSHEA)” of 1994, which recognized the importance of providing health information to the consumer so

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An Emerging Giant – What is the Difference Between Direct Selling and Network Marketing?

Network marketing – also called multilevel marketing (MLM), person-to-person marketing, and one-on-one marketing – is a form of direct selling. You may already know about direct selling.  Avon, Tupperware, Mary Kay, Fuller Brush… these are just some of the direct selling companies that have been household names for decades. Since the 1980’s, new network marketing giants have emerged, including Nikken, Herbalife, NuSkin, Maleleuca, and Prime America.

Direct selling companies market goods and services through networks of thousands of independent distributors. These distributors either buy products from their companies and then resell them to consumers, or they sell products on behalf of their companies for a commission on retail sales.

Network marketing gives direct selling a new spin. In both types of companies, distributors make money by selling products directly to consumers. But in network marketing companies, distributors can also make money by building their own sales organizations and receiving commissions or bonuses on the sales generated by the distributors in the organizations. The term “multilevel marketing” springs from the fact that distributors receive commissions on multiple levels of their organizations. Most direct selling companies today are structured this way.

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