(ARE NETWORK MARKETING DISTRIBUTORS BUSINESS
PEOPLE? : MLM Network marketing secrets - is another
great article about mlm, multi level marketing and a
little about multilevel marketing on ARE NETWORK
MARKETING DISTRIBUTORS BUSINESS PEOPLE? Perspectives from
a network marketing attorney whose practice emphasizes
distributors rights by David G. Eisenstein, Esq. In the
network marketing...)
ARE NETWORK MARKETING DISTRIBUTORS BUSINESS
PEOPLE?
Perspectives from a network
marketing attorney whose practice emphasizes distributors
rights
by David G. Eisenstein, Esq.
In the network marketing industry, there are many successful
distributors who have found a nice niche as a home based
business owner.
Many more are diligently working to be successful. But, do
they really own their own businesses, or are they more like
employees of the companies for whom they are often called
"independent distributors?"
The answer is more difficult than the corporate marketing
departments of most network marketing companies would have you
believe.
While the corporate types hype the "financial freedom" and
purport to cater to the "be your own boss" mentality of home
based business people, the answer to the question of whether
the distributor really owns his or her own business, or is
actually treated more like an employee by the network marketing
company whose products and services the distributor sells, must
be arrived at on the basis of answers to some very specific
questions about the opportunity in which the distributor has
become immersed.
How much control does the "company" exercise over the
distributor?
This is a familiar distinction in the context of the IRS
definition of employee versus independent contractor and in the
legal context in general.
If the company sets requirements as to the precise means and
methods by which the distributor accomplishes his or her
objectives, down to such details as required uniform, work
hours, and micromanaging the efforts of the distributor through
a thousand pages of company policies and procedures--in
substance providing a "supervisor on paper" to "look over the
shoulder" of the distributor, the distributor, arguably, is
then under the "control" of the company as much as if that
distributor reported for an 8 to 5 shift at the company's home
office Monday through Friday.
There is not a thing which is independent about such a
distributor "employed" by the company.
Does the "company" allow the distributor to freely sell his
or her distributorship or will it to heirs?
A true test of whether a company allows its distributors to
actually be in business for themselves and not just have a JOB
with the company is whether the company's policies allow for an
easy exit by the distributor through sale of the business, with
few if any strings attached.
Remember the concept of working to build your business so
that you can earn "residual" or "walk away" income that would
continue to be paid regardless of whether you continued to be
active?"something an employee never has the right to do and a
key reason why network marketers have been drawn to the
valuable business asset which residual income represents and
which their successful hard work at business building could
bring to them, that no JOB could.
This unfettered right to sell one's own distributor business
should not be lost or taken away by the company, when the
company decides to terminate a distributor who has built a
business. A reasonable opportunity to sell their
distributor business, say one year , should be given to those
distributors who have parted ways, voluntarily or involuntarily
with a company.
Are the company's policies and procedures regarding
cross-recruitment overreaching and extreme or are they fair and
drafted to allow for the least amount of interference required
to protect the businesses of the company's distributors?
We all know the drill by now. The companies which
draft their anti cross-recruitment policies narrowly and
without unnecessary restrictions are allowing their
distributors to truly be independent distributor business
owners. Reasonable approaches to cross-recruiting allow a
distributor to correctly believe that he or she is truly an
independent, intelligent business person, not an indentured
servant who is stuck, hogtied or handcuffed to any particular
company forever.
However, the policies, and even the distributor advisory
board contracts which read like a sentence to a term of years
in the company's confinement are anti-competitive and illegal
in restraint of trade in many states, because they go well
beyond what is reasonably necessary to protect the company's
distributors' business expectancies.
Unduly harsh restrictions on distributors freedom of
association, while not always adopted with bad motives, have
resulted in some unnecessarily egregious results in the lives
of distributors, many of whom have behaved honorably, when
those undue restrictions are enforced or enforcement is
threatened by the company, the entity which writes the
checks and therefore carries near absolute leverage in
the relationship.
As a distributor owner of your home based business are
you spending and investing your earned income responsibly so
that the money sticks to you or do you spend it faster than you
make it?
It never ceases to amaze me how so many successful
distributors do not do the things necessary, such as spend less
than they make, and save and invest the difference in their own
portfolio of diversified assets, so that the money they make
sticks to them. Even in network marketing, as the owner
of your own distributor business it's not how much you make,
but how much sticks to you.
This means if and when you have a medical, legal or other
emergency in your life or business, just like any other owner
of a substantial business"which is exactly what you own when
you generate significant commission income on a monthly basis
--- you must have the money readily available to rectify the
urgent necessity just like any other true business owner must
do.
If you are a distributor and can answer the above question
in the affirmative, then the main question posed by this
article---are distributors really business people?---can be
answered, as to you, with a resounding, "Yes I am."
Source: Law Offices of David Eisenstein, Esquire. - As a
Supplier Member of the Direct Selling Association - DSA - Mr.
Eisenstein is available to consult with or represent MLM,
network marketing companies with legal needs such as lawsuits
in the courts and problems with the FTC (Federal Trade
Commission), state AG - Attorney General. Click here for
more information
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