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MLM Income Disclosure Statement - Is Your Network Marketing Company Compliant?

Every network marketing company is required by law to publish its mlm income disclosure statement.

The network marketing income disclosure statement is a document that states the number of participants in a particular mlm company's business opportunity program and the level of income earned by these participants.

It is not required for this document to carry the names of individuals. What is required is the level of income earned by groups of participants expressed as a percentage.

For example, every mlm company has a list of top earners. At the same time, every network marketing company has a list of bottom earners (or people who earn little to nothing from the business opportunity).

The third category are people who join the business opportunity and quit.

An honestly written network marketing company income disclosure statement should provide clear insight into what percentages of participants fall into each of the three categories mentioned above.

The Purpose of Income Disclosure Statements

At this point it is important to ask, "what is the purpose of the mlm income disclosure statement? Why do government trade commissions (e.g. the federal trade commission, FTC, in the USA) and other consumer protection agencies worldwide insist that network marketing companies publish the income levels of participants in their income opportunity programs?

The simple reason is to protect the interest of the general public.

The problem is this . . . mlm companies are not like traditional companies that sell their products and services through a few distributors who stock the products and then sell to wholesalers who, in turn, sell to retailers.

Network marketing companies openly invite the general public to come and register as independent distributors with them. And often they encourage existing participants in their business opportunity programs to invite friends, family and acquaintances (and everyone in the cycle of influence) to join the program by offering varying levels of commissions to distributors based on the quantity of products bought from the company by people recruited by them.

Since the general public is being invited by these multi level marketing companies and their distributors, it is important that the true income potential of the business opportunity be made clear to potential participants.

The government cannot legally dictate to individuals which companies they should partner with for business purposes. Each person must make that decision for himself.

Nevertheless, government regulatory agencies have a responsibility to ensure that business opportunity corporations (in this case, mlm companies) provide clear information to potential participants regarding the earnings level possible from their programs. That is the exact purpose of the mlm income disclosure statement.

In summary . . .

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When mlm companies publicly provide honest data about the performance level (or earnings level) of existing distributors, it enables potential distributors to make informed decisions whether to join or not to join a particular mlm company. And it eliminates the possibility of participants who fail with the program to group together later in the future to sue the company for misinformation or fraud.

In addition, a straightforward publicly available mlm income disclosure statement checkmates the tendency for existing distributors of any company to over-state or over-exaggerate the earnings potential of the company they are associated with to prospects they intend to recruit into their business opportunity, especially when prospects do due diligence and research before joining a company.

Bottom line.

It is in the best interest of mlm companies to publicly provide honestly written mlm income disclosure statement to potential distributors. It is also important that you request to see the income disclosure statement of the network marketing company you wish to partner with before joining.

The question is . . . is the mlm company you're promoting compliant?

Have you personally read the network marketing income disclosure state of the company you're associated with?

If your answer is "No", now is the right time to request that document or search for it online or via the official website of the company you're associated with.

Why is this absolutely important?

Simple. The federal trade commission can shut down your company for false income disclosure statement, which is considered fraudulent representation of the facts. And, yes, that is a criminal offense!

What happens if the company you're associated with gets shut down by the FTC (or the government regulatory agency in the country where you live)?

Sure, you will lose money!

Bottom line.

Do due diligence and research before joining any network marketing company!

The mlm income disclosure statement provides vital information that enable prospects (and new recruits) have the right perspective and avoid unrealistic income expectations from their new mlm business opportunity.

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