Is Your MLM Legal?

Network Marketing - Is Your Business Legal

One of the biggest challenges facing the network marketer is the
poor reputation the industry has earned over the years. Most of this
reputation has been created by illegal and fly-by-night businesses that
have been created with the express purpose of fleecing their
distributors by running illegal pyramid schemes.

Most people,
when approached about joining a network marketing business, do not know
the questions to ask. They tend to apply what they know about
conventional business to network marketing. Unfortunately things that
make sense in conventional business are very often either unethical or
illegal in network marketing. Many states have enacted law specifically
designed control network marketing businesses. Typical examples are:

• High entry cost. - Business cost money to start so a fee of hundreds or thousands of dollars does not seem unreasonable.
• Large inventory purchase. - “You need something to sell don’t you.”
• Making commissions for signing up new distributors or making profits from volume sale to new distributors.

“We
will pay you $50 for each distributor you sign up in your front line”
or “All you need to do is buy $3000 in inventory and sell the same to
your new distributors.”