Multilevel Marketing: | David O. Klein | Verdict | Legal Analysis and Commentary from Justia

The most popular multilevel marketing (“MLM“) companies and brands have attained near-cultural icon status: AmwayHerbalife,Mary Kay, and Shaklee.  Many Americans are familiar with these brands, as well as some of the lesser-known variations that might have been introduced by an overzealous acquaintance, through an infomercial, or via the Internet.  The popularity of the multilevel marketing method is no fluke; direct sales can be a profitable business model.  However, caution is warranted for prospective market entrants, for there is a network of state and federal laws and regulations that must be navigated in order to ensure that a given multilevel-marketing operation is not deemed to be an illegal pyramid scheme.
If you’ve ever wondered just what is the legal difference between a MLM operation and a pyramid scheme, read the entire analysis here.

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