MLM News: Inc 500 Numbers are in for Network Marketing, SBA100 Includes MLM Company, and What Gerry Nehra Speaks On Paying Commissions On Sales Aids
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What follow are my personal observations on the subject of commissions on sales aids. This article should not be construed as the rendering of legal advice. Companies and distributors needing specific counsel in this area should retain an attorney skilled in direct selling law.
The conventional wisdom followed by the vast majority of companies is to pay no commissions on sales aids. What follows is the reason “why”: Although no specific state or federal law prohibits paying commissions on sales aids, if the company gives independent contractor representatives an incentive to recruit more representatives, and that incentive is greater than the incentive to sell products and services to consumers, that is exactly what those representatives will do.
The few companies paying some form of commissions on sales aids, and who in my view are not at risk, have that portion of their business a VERY SMALL portion of their total business. I believe 15 percent or less is very small and defensible, as long as there are
no other regulatory issues. Also, the commissionable sales aids are always optional, and never a requirement of participation in the income opportunity. Read On…
Inc. Magazine announced its list of the top 500 and 5,000 fastest-growing companies. Direct selling member companies included on the top 500 list were Scentsy (no. 85) and Ambit Energy (no. 390). Direct selling member companies included on the top 5,000 list were LifeWave (no. 721), YOR Health (no. 1611), Team Beachbody (no. 2314), 5Linx (no. 2419) and Isagenix (no. 4150).
In 1995, Jill Blashack Strahan founded Tastefully Simple on what she calls “a dream and a shoestring.” She bootstrapped the business with $6,000 in personal savings, a $10,000 investment from partner Joani Nielson and a $20,000 Small Business Administration loan.
The company started in a shed with no running water or air conditioning, using a pool table as the packing station. Jill was the company’s first employee and sales consultant, and during the first three years, she didn’t take a salary.
Today, Tastefully Simple is a direct sales company featuring over 60 easy-to-prepare food and gifts.
Tastefully Simple has become a $100 million company in the Inc. 500 Hall of Fame with over 22,000 consultants nationwide and over 340 team members at its headquarters.
About the company
Headquarters: 231 Commerce Blvd., Johnstown, Ohio
Employees: 1,500 employees and an independent sales force of nearly 40,000
Sales: Not available; company is private (Read On)
The Direct Selling Association Provide Member Companies With Health Care Program For Independent Distributors.
While many distributors are drawn to direct selling because of the flexibility and versatility the industry offers, a key factor in enabling distributors to take on full-time endeavors is access to health insurance. As many households continue to endure layoffs and long-term unemployment, thousands of part-time distributors are seeking coverage for their families.
By partnering with DSA, your company can not only provide families with this crucial service, but you can also increase the loyalty of your distributors as they gain access to an invaluable resource while maintaining their independent contractor status. Read More…