Network Marketing - Is Your Business Legal?
Network Marketing has become a very popular form of starting a home based business but the choice of a Network Marketing company can be a challenging task. Most people do not know how to determine whether a potential Network Marketing business is legal. By following some basic guidelines you can confirm that the business you are interested in is meets the requirements of the law.
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."
Over the years while contacting people about my network marketing business I have found people who had been recently approached about joining a network marketing business. I always suggest that they contact the Direct Selling Education Foundation for their publication "Pyramid Schemes: Not What They Seem!" to determine if the business they are considering is legitimate. Some of the suggestions are:
* Start up costs should be reasonable. Entry costs for legitimate network marketing business should be relatively small. The fees may include the cost of a sales kit sold at or below company cost.
* Companies that require inventory should have a "buy back" policy for distributors that wish to quit the business. Many states and the Direct Selling Association require buybacks of at least a 90% of the original cost.
* Are profits made primarily on the sale of product to the end user. Pyramid schemes make their profits on volume sales to new recruits.
* Take your time. Never be pressured to sign up right away. Ask to meet successful distributors.Find out about the company.
* Find out where they are located. Who are the officers of company? What is their history?
* Are they members of the Direct Selling Association and have subscribed to the Code of Ethics of the DSA.
Network Marketing is one of the most effective ways of starting and running your own business. With effort and the willingness to work hard you can develop a strong secondary or primary income. Just make sure that the opportunity you are investigating is a legal business.
For free live coaching session on starting your own on-line home based network marketing business go to:
NewmanMarketing.com
Find out if you have what it takes to be successful in your own home based business.
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."
Over the years while contacting people about my network marketing business I have found people who had been recently approached about joining a network marketing business. I always suggest that they contact the Direct Selling Education Foundation for their publication "Pyramid Schemes: Not What They Seem!" to determine if the business they are considering is legitimate. Some of the suggestions are:
* Start up costs should be reasonable. Entry costs for legitimate network marketing business should be relatively small. The fees may include the cost of a sales kit sold at or below company cost.
* Companies that require inventory should have a "buy back" policy for distributors that wish to quit the business. Many states and the Direct Selling Association require buybacks of at least a 90% of the original cost.
* Are profits made primarily on the sale of product to the end user. Pyramid schemes make their profits on volume sales to new recruits.
* Take your time. Never be pressured to sign up right away. Ask to meet successful distributors.Find out about the company.
* Find out where they are located. Who are the officers of company? What is their history?
* Are they members of the Direct Selling Association and have subscribed to the Code of Ethics of the DSA.
Network Marketing is one of the most effective ways of starting and running your own business. With effort and the willingness to work hard you can develop a strong secondary or primary income. Just make sure that the opportunity you are investigating is a legal business.
For free live coaching session on starting your own on-line home based network marketing business go to:
NewmanMarketing.com
Find out if you have what it takes to be successful in your own home based business.
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