Articles

MLM Startup Series

Intellectual Property – What is It?

Our common perception of property is something that we can physically possess. The law, however, has an entirely different concept. To the law, property is considered a bundle of rights, that include the right to use something, the right to possess that thing, the right to dispose of that thing, and the right to prevent other people from interfering with your rights respecting that thing.

The Sequel – Dietary Supplement Marketing – Rethinking the Use of Third Party Material

More on the use of the use and misuse of the Third Party Labeling Excemption in dietary supplements marketing, including coverage of the impact of the FDA’s Xango Warning Letter.

Dietary Supplement Marketing – Rethinking the Use of Third Party Material

A dangerous trend has taken root in the world of dietary supplement advertising. More and more companies are using third parties ostensibly unconnected with the company to author and publish materials extolling the benefits of the generic ingredients in their products. The problem is that these materials may not pass regulatory muster, and sooner or later will come under FTC scrutiny. Here’s what you need to know now to avoid problems in the future.

The FTC’s Proposed Business Opportunity Rule and How It Affects MLM Marketers

The proposed rule represents a serious challenge for direct sellers because it contains onerous obligations that will restrict their flexibility in recruiting new distributors and dramatically compromise the confidentiality distributors. This article describes the challenge and how industry can respond.

Seeing the Forest for the Trees

There is an overwhelming misperception among network marketing executives that they have nothing to worry about from the Federal Trade Commission or State Attorneys General so long as their compensation plans are not pyramids. In the case of network marketing programs, regulators focus first and foremost on the conduct of the company and its sales force to determine if they are engaging in unfair or deceptive consumer practices in their sales and marketing techniques. Since this is what regulators look at first, network marketing companies are well advised to follow the regulators’ lead.

The Preminence of Value

One hundred and thirty six years of direct selling history in the United States absolutely establish that the most important factor is the value of the products, making value not only a business issue, but one of the most important factors affecting the legality of any network marketing program.

Customer Programs

A customer program is the single best thing that a company can do to bullet-proof itself legally. Moreover, it is also one of the best things the company can do for its and its distributors bottom lines.

Bigsmart Not So Smart!

FDA Promulgates New Standard for Dietary Supplement Health Claims

Securities Law and MLM – What’s the Deal?

Door-to-Door Sales

This article discusses the Federal Trade Commission’s definition of “door-to-door” sales (it’s more expansive that you think!) the requirements, and how they apply to direct sellers.

Double Trouble!!

An overview of the opportunities and problems inherent in Binary Compensation Plans, based on a common format utilized by companies selling prepaid long distance telephone cards.

Income and Earnings Representations

This article examines the legal issues surrounding written earnings claims and income representations made by direct selling, multilevel marketing or network marketing companies and their distributors, and analyzes federal and state law relative to such representations.

Legal Principles of Multilevel Marketing

A primer covering how to start an MLM company. In addition to MLM startup issues and multilevel marketing in general, it also covers, buying clubs, business opportunity statutes, referral sales, securities, lotteries, and recent litigation.

Training Camp

Discusses the timely topic of what legal problems are associated with override bonuses on training programs.

Get Your Hands Off My Downline!!!

If God had been running an MLM rather than delivering the Jews from Egypt, the first of the Ten Commandments given to Moses would have been “thou shalt not steal thy neighbors downline.” Following closely on the heels of this commandment would be “thou shalt not covet thy neighbor’s downline,” and “thou shalt not commingle downlines.”

Environmental Marketing Claims, Are You “EnviroLegally Correct”? SalesWatch, April, 1996)