What You Should Know Before Embarking on Multi Level Marketing Business

Multi Level Marketing business offers great opportunity for building a second income or a stable income and profession for everyone without the risks associated usually with businesses and without any substantial investment.

If you have chosen to join the MLM network and become a distributor, you will need to know all about MLM concept, how the trade works etc. You will undergo training in selling as well as regarding product and distribution etc as provided by your sponsor distributor and the Company that you are joining.

Multi Level Marketing is legitimate business and is growing phenomenally across the globe. Multi Level Marketing as a concept is of recent origin and owes its origin and history to the famous companies namely Amway, Nutralite and Shaklee which started this concept in the early 1950s. Today there are many more top brands like Avon, Oriflame, Tupperware and many more that have become global businesses thanks to Multi-Level Marketing concept.

If you study the history of Multi Level Marketing and its origins, you will find that in early times the concept was quite vague and surrounded by a lot of ambiguity. There was lack of clarity in the distributorship, in the income or profit scheme and more importantly this scheme was perceived to be the same as pyramid selling schemes. Pyramid selling schemes were and are nothing but frauds that fool the people with promises and are designed to make quick money by the promoters of the scheme. Some of the most famous pyramid selling schemes that brought out their fraudulent nature and led to passing of legislation were the ‘Endless chain scheme’ and ‘Pyramid Club’ schemes.

Once the Pyramid Schemes went bust, the Governments in most countries too steps to identify and differentiate between ‘Pyramid selling’ & ‘Multi Level Marketing’. While MLM has been brought under Fair Trade Practices Act of the Governments thus providing for consumer safeguards, Pyramid Selling too has been subject to regulations under Pyramid selling Act passed by the Federal Governments.

Multi Level Marketing today is covered under Fair Trading Act and in each country besides the Act and regulations passed by the Federal Government; the States have their own MLM Acts and regulations. The enforcement of the regulations are the focus of the State Governments in all states.

Before you sign up as a Distributor under any Multi Level Marketing Scheme offered by any Company, it is important that you go through the legislation and regulatory laws and practices as determined by the Government. Such knowledge helps you protect yourself and conduce your business ethically and legally without getting into any kind of troubles. Being legally compliant is a necessary and helps you build your business on rock solid foundation in the long run.

Before you sign up any distributor contract, it is important to study the same with respect to legal and regulatory aspects and obtain legal opinion on the same. Do not be led by any claims that promise high returns and prompt you to buy and stock inventories or demand such commitments from your end. Remember MLM is a legitimate business opportunity and to reap rewards you will need to invest your time, focus and energy and work hard.

All the Multi Level Marketing Companies are members of Direct Selling Association in their respective countries. Each of these DSAs have laid down the rules of conduct and ethical business practices for their members. All the member companies are bound to be compliant with the rules. Check if the Company that you are dealing with is a member of DSA and go through the rules and regulations of DSA.

Knowledge of the legal aspects of business, knowledge of the industry and trade practices enhances your knowledge and makes you a better and sound business executive. This knowledge not only helps you build your business on solid footing, but helps you build the right perspective and change the opinion of your prospects too.


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