“Legal Hotspots for Direct Selling Companies.”

“Legal Hotspots for Direct Selling Companies.”

Nikki Keohohou with the Direct Selling Women’s Alliance (DSWA) hosts the Executive Interview Forum titled “Legal Hotspots for Direct Selling Companies.” The interviewee for this hour is Network Marketing Attorney, Jeff Babener, Editor of www.mlmlegal.com.

View the video on our website: mlmattorney.com or mlmlegal.com; or view it on Youtube.

In this hour-long video, Jeff Babener addresses network marketing industry topics such as:

-          Distributor raiding

-          Pyramid scheme

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In everyday life, roughly nine out of ten successful people had a mentor.

In everyday life, roughly nine out of ten successful people had a mentor.

Multilevel marketing companies are built on the mentorship model where top-tier salespeople recruit salespeople below them to sell products and services. The top-tiered salesperson makes a commission on the products and services that they sell, as well as on the sales of those in their downline. This model encourages recruiting of new salespeople, while also allowing new recruits to have a mentor who will answer questions and provide examples of success.

In everyday life, roughly nine out of ten successful people had a mentor. Whereas, those who don’t have strong mentors in network marketing are those whom are more likely to fail or quit. Therefore, when it comes to choosing a sponsor/mentor, the best thing to do is to look for one that is seasoned, successful and willing to provide the critical network marketing mentorship that you need to be successful. And when it comes time for you to sponsor and mentor, be sure to train your recruits in the successful ways that you’ve been taught. Their success equates to your success.

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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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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?

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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?

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Can you start a network marketing company on a low budget?

No one starts at the top and it is the rare company that starts with millions of dollars. It is not unusual to see network marketing startup companies spend hundreds of thousands of dollars; this just may not be possible for many with a dream. The fact is that many of today’s successful companies started at kitchen tables, in basements and garages, or even mixing their products in bathtubs. A look at Pampered Chef, Silpada, Longaberger, and even Amway will reveal very humble beginnings. It may take longer and perhaps the chances of success without proper capitalization are much lower, but it can be done. Small startups may emulate from company profiles found at www.mlmlegal.com; they may do their initial books and commissions with Quicken and they may do their printing at local fast print shops. Just hang in there. Financing is “good,” but passion and hard work can also compensate. As Neil Diamond said, “Money talks, but it can’t dance and it can’t walk.”

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Recruit Top Distributors

Your ability to recruit directly equates to your success.

When you are starting your MLM, direct selling, network marketing, or party plan business, you’ll find that recruiting experienced distributors is often essential to your company’s success. And if you don’t have the background yourself as a successful recruiter then you need to budget for a “sales manager” position for an individual who does have that capability to recruit.

Your ability to recruit directly equates to your success. If you have a background in recruiting and a background in direct selling, then your need for capital will be substantially lower. Recruiting top distributors will enable your company to have the capital to stay afloat and even grow. If recruiting is slow then you will need to raise one to three years of buffer capital in order to support your company in the event of stagnation or loss. And remember, the remuneration that is offered to top distributors will be effective in their decision to stay and help grow the business.

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Recruiting in Rocky SoilIt is not just about you…

Too often, network marketers are tone deaf as they recruit and sell. It is easy to fall into the easy path in which talking points, which extol the virtues of the product and opportunity, are presented to potential customers or recruits without first understanding the mindset of their audience.

Standing in the shoes of your customer and recruit is essential. There is a reason that Fortune 500-brand companies engage in significant market research and focus group activity before launching products. They understand that “having a good product” is not enough to close the “bonding” loop. Unless, you are the rare genius of Steve Jobs, who was able to create a new product, for which there was no market, and to anticipate that “if we build it, they will come,” then there is no escaping the hard work of finding and preparing the “soil” for planting.

And it’s not about the coffee…

And, as good as the product or opportunity may be, one must realize that the relationship may be the driving factor in success. In a recent book by Starbucks’ President, Howard Behar, It’s Not About The Coffee, Mr. Behar explains that the success of Starbucks was stumbled upon; ie., that Starbucks is not a coffee seller that seeks relationships with its customers, but rather it is a company that fosters store experiential environments that bond relationships with customers first, and a company that sells coffee, second.

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Jeff Babener’s Youtube video channel has reached over 67,000 views! Visit our Youtube channel to view some of MLMLegal.com’s most popular videos!

MLM Attorney Jeff Babener discusses compensation plans, pyramid schemes, the MLM Startup Conference in Las Vegas, the network marketing industry, and many other aspects of the direct selling business. Here are some of our videos (and don’t forget to check back for more educational videos in the future!):

Attorney Jeff Babener, Discusses Various Topics in a MLM Compliance Training Session

Earnings Claims and Consumer Protection Laws

Interviews with Expert MLM Attorney, Jeffrey Babener

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Consultants often hit a dead end once they’ve exhausted family and friends as their first customers. Yet, some consultants make tremendous amounts of money without having rich (and supportive) relatives. How do they do it? Here are a few tips on how you can grow your MLM business:

1)      Never stop selling. Connect with people at the park, at your kid’s school, at your church, at parties, and at any other event where networking happens naturally. Ask for email addresses and phone numbers and make sure to keep a stockpile of catalogs, newsletters and business cards handy.

2)      Create goals for yourself. If you want to make “X” amount of money per month then do the math. How many parties will you need to have and what are the average sales you’ll need for each party? If you need two successful parties per month, then you set a goal and stick to it.

3)      Reach out to your customers. Keep track of your customers, what they bought, and when you think they might run out of product. Be sure to touch base with them to make sure that your customers become and stay repeat customers.

4)      Get organized. Use a business journal or computer program to keep track of your customers, including their names, what they’ve purchased, when they’ve purchased it, their contact information, and your general thoughts on their interest in the product and being repeat customers. At the very least they will appreciate that you’ve kept them in mind.

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