How to Build a Successful Direct Selling Company Continued - Page Three
By Jeffrey Babener, © 2013
For better or worse, the practices of the MLM industry have induced scores of pieces of legislation and regulatory
control, such as pyramid statutes, MLM statutes, business opportunity, securities, FTC and postal regulation.
Notwithstanding the success of the industry, there is always tension between the regulatory community and the
MLM industry. Overzealous regulators and rogue operators guarantee that this state of affairs will always exist.
Layer these issues with distributor relations and discipline, FDA, trademark, tax and international issues, and it is
easy to see why this individual is probably the first person with whom you should establish a relationship and with
whom you should grow, with that person as a trusted business advisor and member of your business team.
At a minimum, you would be totally premature to jump into the marketplace without a legal review by MLM legal
counsel of the most basic of sales kit contents, whether they be in hard copy, CD-ROM or on the internet. Those
basics include: representative agreement; policies and procedures; product brochures; marketing plan
presentation; and various forms ranging from retail receipts to autoship to multiple owner applications, etc.
Responding after the fact to regulatory agencies over deficient materials or answering distributor complaints for
slipshod documentation is too little, too late…and too bad for the startup MLM business.
Your Trademark-Your Life!
Picture living your life without a name. To some extent, you define yourself and your existence by your name.
Obviously, you had no choice in choosing your name, but nevertheless, in the trademark sense, it is your branding
for life. When others think of you, they think of your name, and vice-versa. Your choice of name for your MLM is
equally important. Not only will you brand your business and product forever, but what may be worthless today will
be your most valuable asset in years to come. Just ask Coca-Cola, Marlboro, Microsoft, Avon or Mary Kay. And
so, this choice deserves special emphasis in the beginning. A trademark search by your MLM Lawyer is a must.
To be told three years down the way that you must give up your name because you did not bother to conduct a
trademark search would be a devastating blow to your business. Also, it is essential that the name that you choose
will suit the expanding product or service offerings that will be coming down the pike. So, what’s in a name?
MLM Business Experience—Possess it or Buy it!
As mentioned, MLM is not just any business. It is not retailing, franchising, e-commerce internet or dot com selling,
telemarketing, catalog, direct marketing or infomercial. MLM, under all its names, Direct Selling, Network Marketing,
Direct Sales, Party Plan and Multilevel Marketing, is a unique beast. To launch this business, you must have a
substantial background and be well grounded in its written and unwritten principles. If you know your product and
you have a passion to bring it to the public, but you lack industry experience, then you must buy that experience.
You may hire key employees in such positions as CEO, COO, Sales and Marketing, Customer Service and
Distributor Relations, Information Technologies, etc. The payroll will add up fast, and unless your capitalization can
sustain this ongoing cost, you should seriously consider outsourcing the solutions for these types of expertise. A
first suggestion is to consult with your MLM Attorney, who is likely familiar with the best resources in the business.
Although limited, your search will disclose extraordinary resources in the area of MLM Management Consulting.
Such industry established experts in areas of MLM startup implementation, compensation plan design and software
selection are often tremendous team players and invaluable assets to your team. Above all, don’t launch without in-
house or outsourced MLM business experience.
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