Wednesday, July 23, 2008

Free Network Marketing Training -- Understanding Your Contract

When I became serious about building a network marketing business, I started searching online for help. In so doing, I found some great mentors including Bob & Anna Bassett. Bob & Anna had been in the industry for many years thus they had many ups & downs. Bob & Anna found out that one company they were in was actually a pyramid scheme and they didn't even know it. In another company with over 60 distributors in their organization, they only earned $115.00/mo. WOW! That is a lot of people for such little money. In fact, that is less than $2.00 per person. If they wanted to earn a $10,000/month income they would have needed over 5,000 people. Thus, they became educated about mlm and boy, am I glad they did. I have learned a lot from them. They are truly mentors with a servant's heart, truly go-givers.

Here's one thing I learned from them. Perhaps this info can help you, too.

One of the many things I learned is how to really inspect a network marketing company's contract before joining a company. The contract should protect both sides and it should be fair in its compensation to the distributor. There really can be a happy medium. In most cases, the company has all the rights, the distributor usually has none.

The contract consists of three parts: the terms & conditions, the policies & procedures and the compensation plan. All three should be clearly visible & available on the company's home page. Some companies put the terms & conditions only and you have to join before you can read the policies and procedures. This should not be the case because when you check the box, I agree to the terms and conditions, you are also agreeing to the entire contract. The part you don't see(but agree to), the policies and procedures, is where the gotcha clauses are hidden. written. This is like reading the fine print in a contract.

Here are some of the things to consider when reviewing the contract.

The first thing is the length of the contract. According to Rod Cook, the mlm watchdog, contracts should be less than 14 pages. But really, you can get everything in 6. If it is too long, there are too many places to hide the gotcha clauses. It is too easy for them to use legalese and separate the policies and spread them throughout the contract. There are actually contracts 50+ pages long.

Remember, the contracts were written by lawyers to protect the companies and every thing in them can be used against you in a court of law. So, if you don't understand something, don't sign. In fact, if they use too much legal jargon, let an attorney review it for you.

Another thing to do is research the company and its owners. Do a google search. Put the owner and/or company name followed by the word spam in quotations. This will help you find out if they have any lawsuits, legal problems or legitimate complaints against them.

These are a couple of things to do before you join a company. If you're already in one, check them out now before you invest any more time, energy and resources into building your business. It's better to find out now than later.

This should get you started. I'll share some of the gotcha clauses in my next post.

Be empowered to prosper!

Irma White
A Mentor With a Servant's Heart

If this information was helpful, click here for more free network marketing training.

1 comment:

Bob and Anna Bassett said...

Hello Irma,

Great blog!! Very informative!!

Thank you for your kind words!! It has been an absolute pleasure working with you and we look forward to a long and prosperous friendship. We are learning so much from you. It's wonderful to be able to share our experiences together and learn from each other.


Bob and Anna Bassett