Network Marketing // Direct Sales

Hello, and WELCOME to this page. My name is Peter Arnold, and I'm hopeful that you'll find the information below useful...

As good as the MLM industry is (and it is ), it's not 'perfect' => some REALITIES:

SCAMS & SCHEMES - There’s also a minefield of “get-rich-quick” JUNK out there. For those who love the idea of working from the privacy of home => take EXTREME CAUTION.

EXAMPLES - There is far too much 'hype' in this industry - too many false promises - too much unrealistic expectation - too many illegal pyramids - too many lawsuits (including unjust terminations, etc) – far too many MLM and Direct Sales Companies 'hitting the wall' - or making 'negative' changes (in comp plans / mindset / direction) - or being run by dictator owners, driven by greed and ego - too many Heavy Hitters with strong self-interest. As a result, there are far too many good people getting hurt, because of these dirty little secrets.
 
MLM  EVALUATION => ‘POLICIES & PROCEDURES' - When you're looking at (evaluating) an MLM company, the one area that is completely 'missed' is their P&Ps - as well as the T&Cs (the Terms & Conditions). For some unexplainable reason, NObody seems to want to touch this - yet, the P&Ps should be the most important single FIRST STEP in the whole evaluation process. Yes, other criteria is vital too (the corp track record and reputation - ownership - comp plan - products - training - support, etc) - but the P&Ps should absolutely be JOB ONE.

P&aPs => OVERSHADOW 'ALL OTHER' FACTORS - You can have the "best" products - the very "best" comp plan - the "best" research - the "best" systems / upline / websites / webinars / conference calls, etc, etc -- but if you have BAD Company P&Ps -- all the other factors won't really matter.

BINDING - These documents are (enforceable) Legal AGREEMENTS. They represent your legal CONTRACT to be "in business" with the MLM company. We cannot - cannot - stress enough, the critical importance of doing your CAREFUL DUE DILLIGENCE on this - before reaching a decision. Believe it or not, there are companies out there (and some long term, very well known ones) with Clauses in their P&Ps that could really DESTROY your dream for a solid, lifetime Passive Income. Please learn how to PROTECT yourself. Read this page in full - and click on the links below to discover WHY.

 Is There a LINK to the P&Ps? -  If it is your intention to be a "business builder", you should be able to clearly see a link to their P&Ps - ideally, right on the Home Page of the Corporate Website. You need to be able to STUDY the wording of your P&Ps before signing on the dotted line.  Some MLM companies will HIDE that link in a Back Office, or make you “join” it, before being able to fully examine the very document that sets out the legal language of their (unilateral) contract. This is a Huge RED FLAG.  Think about it...

-- top Executives about to join a corporation will want to study their contract, first
-- professional Sales People about to join a company will want to study their contract, first
-- talented Atheletes about to join a national team will want to study their contract, first
-- potential Franchise or Small Business purchasers will want to study their contract, first
-- potential Network Marketers will want to study their MLM company's P&P contract, first

On the other hand, in fairness, if your primary interest is to only generate a small cash flow, say - to "cover the cost of your monthly products (Autoship)" - then the P&Ps are not such an issue.  

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 Can You Ever RETIRE? - Please WATCH OUT for P&Ps that say you must provide 'documented evidence' of certain activities. These will include - ONGOING obligations - for Sales and for Training & Support - sales to new Customers - conducting person-to-person selling - to 'continue to provide' training to downlines - to 'continue to monitor' new Associates, etc. The bottom line here is that many of these companies could end up stealing that CHECK you struggled so hard to create (PASSIVE INCOME). It does happen - it IS happening. A newer version of this is when you see these two words - 'performance requirements'. Unlike Legal Agreements and Contracts that Insurance Agents / Investment Brokers sign with their companies - in NWM // MLM, there are NO such legal vested rights for Distributors. Here, in more detail (some quotes)…

-- 'ONGOING' Training: “Any Member who sponsors another Member into the company must perform a bona fide assistance and training function to ensure that his or her downline is properly operating his or her business. Members must have ongoing contact and communication with the Members in their Downline Organizations (examples usually given here). Upline Members are also responsible to motivate and train new Members in product knowledge, effective sales techniques, the Compensation Plan, and compliance with Company Policies and Procedures.

-- Example -”Members must monitor the Members in their Downline Organizations to ensure that downline Members do not make improper product or business claims, or engage in any illegal or inappropriate conduct. Upon request, every Member should be able to provide immediate, documented evidence to the company of his or her ongoing fulfillment of the different responsibilities of a Sponsor".

-- 'ONGOING' Sales: This is pretty basic. Some companies have quotas you have to meet to be eligible for commission. If you don't meet them, you don't get paid.

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 SIZE of The P&Ps (pages)? - The longer they are, the more ‘gotchas’ they probably contain. Some are 30-50-80+ pages long! And most lay people are simply not (on their own) able to decipher the "meaning" of the legal language in them.

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 Placement / Movement of Downline? “Should an individual personally enroll someone and place that individual under another person in their downline, company reserves the right of the personally enrolling individual to later regain that placed individual for other placement options should the situation deem necessary.  Also, whether or not an enrolled member can change their placement at will.

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 Actions of ‘Household Members’ or Affiliated Individuals? - “If any member of a Member’s immediate household engages in any activity which, if performed by the Member, would violate any provision of the Agreement, such activity will be deemed a violation by the Member and the company may take disciplinary action pursuant to the Statement of Policies against the Member. Similarly, if any individual associated in any way with a corporation, partnership, trust or other entity (collectively “affiliated individual”) violates the Agreement, such action(s) will be deemed a violation by the entity, and the company may take disciplinary action against the entity".  What??  How crazy is that!

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 Can You Be TERMINATED - 'Without Cause'? - Please BEWARE of P&Ps that have 'Jury Trial Waivers' written in, meaning that a Rep cannot take them to court, should they be terminated without cause (company acts as judge / jury / executioner)! Some companies even have language that says if you (or 'anyone' in your group) should sponsor someone who has ever had a FELONY in their past, that you can be terminated. You cannot police or control something like that.

-- Required Attendance at Conventions? - Watch for P&Ps that will 'require' you to attend their annual conventions, in order to qualify for all commissions.  

-- Your 'ONLY' Source of Income? - Watch for P&Ps that dictate NO other company involvements, in order to qualify for all commissions.

-- Termination due to 'Disparaging Comments' Made - Watch for whether these can be against the company and/or another Distributor!  Hmmm...

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 Can They CHANGE the P&Ps Unilaterally? - Many (most) P&Ps state that, with 30-days written notice (or NO notice), the company can 'terminate this Agreement - including the Compensation Plan' - with or without cause. In other words, they could decide to go into Direct Sales, and abandon the Network Marketing business model altogether.  In fairness, some companies will have a Field Advisory Group that they will consult with first, for input.

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 Can They STEAL Your DOWNLINE? - Watch out for Policies & Procedures that have the word ASSIGN in their clauses. In law, that word means the "transfer of property rights and interests". Downlines that you built can be placed under Big Hitters - it's being done.

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 Are There Good 'Product GUARANTEES'? - Believe it or not, there are some companies offering absolutely NO Product GUARANTEES - None. And yet, repeat purchases, plus Customer Satisfaction and Loyalty are the 'backbone' of business success.

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 Is This a J-O-B / Are You an EMPLOYEE? - All of this begins to sound like you're in - a J-O-B - as an Employee - without Freedom - without Rights – but with a dictatorial Management Team at the helm - one that has little actual field EXPERIENCE - one that may well lack INTEGRITY.

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 Independent BUSINESS OWNER (IBO)? - One of the many promises made by uplines and companies - to new prospects - is that they will “own their OWN” business” when they join the opportunity.  It's the sweet message in all the flashy brochures - it's on their websites.  This is totally false. Yes, you are classified as an Independent Contractor (IC). which is for income TAX purposes only - you DO own a Distributorship => however, you do not OWN your own business - you are NOT an IBO (Independent Business OWNER). The Company owns all the assets (including YOUR downline) - the Company has the power - makes the decisions - writes the rules - calls the shots - has the legal ownership - not the Distributor.  The Distributor is => a SALES REP for the Company's produces & services. That’s it.

Note: Not that this is bad at all. In fact, many ‘like’ the fact that that it’s the Company that bears the whole responsibility of ‘ownership’. Others will prefer the freedom of true Entrepreneurship - being a full-fledged IBO (and with the right ‘positioning’ in the Home Business industry - through Internet Attraction Marketing plus SELF Branding plus the appropriate diversification (Multiple, passive [Affiliate] Income Streams) - this can be accomplished).  It becomes a profitable, solid business “structure” – one with many different parts to it (‘including’ your MLM). 

MORE: There are a lot of "grey areas" in P&Ps - many which lead to ugly litigation between MLM companies and their Reps / Affiliates / Distributors. For example -- can a Rep for Company X participate in other MLM companies or businesses in general? -- If Rep X quits or is terminated by Company X, should there be a “non-compete” clause -- and if so, for how long - and what 'activitie's would be covered by the “non-compete” clause? -- Can a Rep of Company X “recruit” or sell the products of Company Y to any other distributors in Company X - and if so, which Reps...

-- only the ones they knew before they joined Company X?
-- only Reps who were personally sponsored into Company X by Rep X?
-- none at all?

Do Not Panic - this is not uncommon.  Almost all MLM Policies & Procedures have at least 'some' of  these.  It is, however, a critical part of the RISK factors to include when you’re assessing any MLM Biz Opp (life is 'full' of risks every day, right)?  Sometimes it's possible for prospective Distributors to negotiate 'changes' in their P&Ps, but it's not common. The overriding element will always, always be - the INTEGRITY of the company owners ("would they ever invoke those gotcha clauses"?).  But here are some 'specific' recommendations for your consideration...

SELF Branding - My own suggestion is to NEVER make your "MLM" be your BUSINESS, because you are leaving yourself open to possible abuse + you're far too vulnerable if that becomes your "primary" source of income.  Instead, your MLM should be (an important) "part of" your overall BUSINESS ENTERPRISE ((diversification + multiple [Affiliate] income streams = both for personal protection and for higher profitability)).

YOU, Inc. - This is what I'm talking about - setting up your "personal" identity - promoting YOURSELF, through offering high "value" to others first -vs- promoting your "company" or its "products" (as your MLM would prefer).  I say this for many, many reasons.  As you gain the skills (or you 'outsource' this), the process will simply mean setting up your OWN attractive MARKETING FUNNEL - which might include a Funded Proposal on the front end, for immediste "cash flow" -- but it should certainly also include a solid MLM at the back end (for critical, long term "residual" income).

RISK - Any MLM company can evoke harsh change - whether it's written in the P&Ps or not.  It's no different than a local business owner who sells you a car - or a restaurant owner where you work part time to supplement your income. The business owner makes the decisions. If they choose to shut their doors, quit paying their people, stop offering their services - there is nothing anyone can do about it. They are the owners. Period. End of story. These are the "risks" of both businesses and jobs.  There are NO guarantees (especially in the current 'jobless recovery').

You could be a real estate agent, with a ton of clients, and get terminated from the firm.  You could be a car salesman and be terminated, whether you bring in your whole family and their friends and their families. You could be a distributor for any MLM company and be 'terminated'. THEY own the business - not you.

Nevertheless - you should at least 'know the rules' you are playing with - you need to have an "awareness".  And with MLM, keep in mind that - just because something isn't "written specifically" in the P&Ps - doesn't mean that bad things - as well as good things - can't [and hasn't] happened.  It's reality in the business world - none of us can change this - we just have to be aware and know that WE are the only one who will look after OURSELVES. So, be wise - be realistic - be business focused - and have some FUN while you're building your OWN business (via Self Branding) - not someone elses.

The 'Attraction Marketing' Model - Using this (newer way) to build your OWN Business Enterprise is far more comfortable, professional and profitable than using "only" OLD School marketing strategies. A "balance" between OLD and NEW is healthiest. There is much information available on how best to do this.

Multiple Income Streams - Here, I'm simply referring to DIVERSIFICATION, over time - to further 'protect' yourself.  I'm not recommending more than ONE primary MLM in your own Biz Enterprise - NO.  I'm simply suggesting a series of good AFFILIATE programs (tools and resources that ALL Network Marketers need and want). 

Product - The only product you should ever lead with is => YOU (to build relationships first). 

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INTEGRITY // INTEGRITY // INTEGRITY - that one element MUST reign supreme - always - always.  A company's P&Ps will 'disclose' their level of integrity - they will tell you the very 'mindset and heart' of the owners.

INTEGRITY should be at the very "foundation" of the company's Leadership.  It is moral soundness - it is honor - truth - character - freedom from corrupting influence, or motive. It is about practicing the Golden Rule. It is about treating people with respect - without judgement.  It is the most 'fundamental source' of one's personal worth.  INTEGRITY should cause the Management / Ownership of companies to provide the highest level of CARE and ACCOUNTABILITY to those they lead.  You need to look for it - in their Vision - in their Mission - in their Leadership - in their Purpose - in their Values - in their Promises -- so that you will always "know" you have the SECURITY of being able to pass your businesses on someday - to your children - and to 'their' children.
 
CAUTION Rules - Please READ your P&Ps and T&Cs - study them - ask good questions - demand answers. The company will say => "but we would never enforce that!"  Our swift response is => "well why would you even put it IN there then?"  Some will argue that these clauses are in there because - 'you must continue to do something' for the money you earn - otherwise it's not legal. Our immediate response is => "show us where that is in fact written into law!" Others will insist that these clauses are in there because of fear of the state Attorneys General (AGs) who 'don't understand' our Network Marketing industry - who confuse it with (illegal) Lotteries and Pyramids, where they say there must always be 'direct or indirect involvement' of the individual earning the income, and the source of that income, etc.
 
BUSINESS 'FACTS'  - Well, author / teacher / business tycoon, Robert Kiyosaki, says that Network Marketing is one of the finest "Income Producing Assets" ever (like a High-Rise Apartment Building, etc). That in itself, infers that one should be able to stop building, walk away from, and keep receiving the cash flow - from a solid biz enterprise [such as an MLM biz] at some point. Or how about a Laundromat - or Car-Wash?  Or, do you think famous (wealthy) golfer, Arnold Palmer is there 'working on' all his income-producing assets since his retirement?  NO - he has trained Managers to look after them - as we in MLM can have. Does Palmer open his mail, read the results, count his money? YES, absolutely!  And so can we, in MLM.  It's called - PASSIVE INCOME - from work we have 'already done' – but “within” your OWN diversified Business Platform - your OWN Business Enterprise (YOU, Inc).

BOTTOM LINE

Despite the many 'success' stories, there are many 'horror' stories of abuse from BAD MLM BUSINESS CONTRACTS out there, sadly.  Please do not become a part of those statistics. 

DSA ( 'DIRECT  SELLING'  ASS'N ) - Yes, many Network Marketing companies are members of the DSA, which has had an excellent reputation for years. Unfortunately, the DSA typically will have the company's best interest at heart first - NOT the Rep's. Their bank of attorneys pretty much has all the odds in favor of the MLM / Network Marketing ‘company’. In fact, those companies who are ‘members’ of the DSA are subscribing to the DSA Code Of Ethics – which in themselves, have a lot of heavy rules 'indirectly' affecting Distributors ‘associated’ with those companies.  Have a look and check out these "rules" - see if you are able to ‘understand’ them] => Click Here

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ASSOCIATION of NETWORK MARKETING PROFESSIONALS - Here is a place that YOU can turn to for EDUCATION and SUPPORT (and the full preservation of your RESIDUAL INCOME) regarding many of these difficult issues.

I had the privilege of serving on the Board Of Directors of the ANMP (formerly the DRA) for almost four years, representing Canada. 

Please be sure to check out the ANMP BILL OF RIGHTS on their Website) => Click Here

ANMP - It's critical for our protection - Why YOU should become a member => Click Here

NETWORK MARKETING?

The MLM / Network Marketing industry is still one of the few places on the planet that continues to offer the average person a pathway to total TIME and FINANCIAL FREEDOM.  BUT, there are some PITFALLS - and CAUTION is the answer.  Although MLM / Network Marketing is a very SIMPLE concept, with enormous attraction ("personal development" + "leverage" + "geometric progression" + "recognition" + "residual income" + "leadership growth" + the many "friendships") - and outstanding upside potential, the reality is - it is not EASY (as with anything else worthwhile in life).

In addition to finding a good COMPANY, it takes a Big DREAM - a POSITIVE MINDSET - PATIENCE - HARD WORK - a smart BUSINESS PLAN - good Marketing SKILLS - a realistic Marketing BUDGET - a COACH//MENTOR - a good MASTERMIND Group - a willingness to be COACHED - ACTION - PERSISTENCE - to name a few requirements and attributes.
 
However, with a good MLM Distributorship – held as (an important) PART of your OWN Business ENTERPRISE - plus the the proper safeguards in place - with the right training, support, and business-building Systems => the success - the lifestyle - the wonderful REWARDS that are possible (financial and otherwise) - can be almost beyond belief.