I bet you haven’t been asked this question before. At the Direct Selling Association Annual Meeting in Orlando this month, President Joe Mariano talked quite a bit about bad actors. A bad actor is a direct selling company that is operating illegally or unethically, or both. How do you know if your business is a… [Read More]
At our Direct Selling Edge Conference this month, I was asked if simple compensation plans were safer. Before giving my answer, I took a big breath and then gave myself a few moments for an additional pause. This was an important question with an even more important two-part answer. A Legal Perspective Given the regulatory action… [Read More]
If your direct selling company has a multilevel compensation plan, it is in your best interest to be aware of the recent FTC actions against Vemma (August 2015) and Herbalife (July 2016) because your company and your compensation plan may have some of the same problems. Watch this video now to learn why these FTC actions matter… [Read More]
By Kevin Grimes, J.D. The short answer is a very precise, lawyer-like “Yes and No”. The long answer depends upon the context of the question. If the question is about compensation plan issues, ranks, and the rights and privileges associated with each rank, the answer is “No”. In a direct selling model, the compensation for… [Read More]
In 2014, I wrote a prophetic post about the need for network marketing companies to have retail customers. Retail customers are people who buy who are not distributors or consultants of a direct selling company. I called this post The Elephant In The Room. If you can, read it first because in 2016, the elephant is… [Read More]
The Direct Selling Edge Conference has become the best and most informative two-day school for new and young network marketing and party plan companies. MLM lawyer Kevin Thompson of ThompsonBurton and MLM compensation plan consultant Jay Leisner of Sylvina Consulting invite owners and employees of network marketing and party plan companies to attend their two-day direct… [Read More]
Party plan companies don’t ask this question, because almost all of their sales are to customers. If yours is a network marketing company, however, this is an important question to which you need to know both the short and the long answer.
As a direct selling company, you need to know about the Federal Trade Commission’s Cooling-Off Rule. There are very specific steps you must follow to be in compliance with this federal law. It’s All About Changing Your Mind If a customer buys something at a store and later changes his or her mind, the merchandise… [Read More]
In the USA, most states don’t require that multilevel distribution companies register with them. However, five states require them to file and/or register. If yours is a party plan company, you are still required to file or register if you have a multilevel compensation plan.
One of the elements of a pyramid scheme is the lack of retail customers and pyramid schemes are illegal. A good number of network marketing companies have few retail customers who aren’t also independent representatives. This is the elephant in the room. In the Omnitrition, Trek Alliance, Equinox, and Burn Lounge cases, courts found problems… [Read More]