Can You Compete? / “MLM Mondays”

So, you’re a bona fide MLMer in the marketplace. You are competing with all the other MLMers selling their line of wares. And all of ya’ll are out to carve out a small piece of the pie, to find your niche and make your fortune.

Good for you. Competition is healthy.

But can you compete with yourself?

I decided to log on to my AOL account last night and visit my favorite MLM hang-out; the “Entrepreneur” chat room.

As luck would have it, there was a rather new Quixtar IBO in the room.

As bad luck would have it; he was also a rather new Pre-Paid Legal consultant; as well.

His new Quixtar sponsor neglected to inform the newbie IBO of a “non-compete” clause in the Quixtar Rules of Conduct.

Here is RULE 6.5 in part: (Emphasis Mine)

6.5. Non-Competition and Anti-Raiding: The Corporation and all registered IBOs share a competitive business interest in maintaining the integrity of the Line of Sponsorship, which was developed exclusively for the purpose of distributing products and services offered or marketed by the Corporation and compensating IBOs for marketing and merchandising such products and services. In order to protect these interests as well as those detailed in Rule 4.27.1., current and former IBOs must not use the Line of Sponsorship to sell, distribute, or promote competing products, services, or other business ventures, or otherwise interfere in the Quixtar business of other IBOs.

6.5.1. For purposes of this Rule 6.5., “Compete” means to own, manage, operate, consult for, be employed by, or participate as an independent distributor in (a) any other direct sales program using a multilevel or “network” marketing structure, or (b) any other enterprise that markets, through independent distributors, products or services functionally interchangeable with those offered or marketed by the Corporation.

Now, before you get all hot under the collar about having your rights usurped by the “Big Brother”; just know that Quixtar is not the only MLM company out there with a similar clause.

In fact, Market America and Shaklee has had court battles over similar clauses and the stipulations were proven pretty much valid.

What I would like to highlight about these clauses is this:

If your company has such a clause, it is your ethical duty to inform your prospects of such a stipulation before you sign them up AND it makes no sense NOT to ask them ahead of time if they are already involved in an MLM company.

Most of my readers already know that my opinion is that one MLM business is hard enough to build, TWO is a disservice to yourself and your downline.

Currently the MLM industry is undergoing close scrutiny by the FTC and the Commission is proposing new rules regarding disclosures.

Avoid the rush, start disclosing issues such as this now.

I admit I have problems with the scope of Quixtar’s rule. And I think the rule could be debated when it comes to the typical MLMer/customer.

MLMers like the concept of multi-level marketing and multi-level marketing products. It is not uncommon for an MLMer who is building a strong dedicated business with the company of their choice to purchase other MLM products from MLMer friends.

And if the #1 reason to join an MLM company is to first receive the discount on products yourself; it makes perfect sense to sign up as a distributor for the discount, but to remain merely a customer in intent. These “customers” do not violate the “non-compete” rule in MY OPINION.

But, if you are affiliated with an MLM company with a “non-compete” rule, and you plan to operate two MLM businesses with all the requirements thereof, DON’T.

Abide by the rule or resign.

I encourage everyone to read the “Market America” and “Shaklee” links above for a complete look at Non-Compete clauses and don’t send your new recruits into chatrooms promoting two different companies, UNLESS in your MLM company, you can compete with yourself.

“MLM Mondays” is featured every week on (what else?) Monday; and offers information, advice and tips on operating an MLM-affiliated business. On The Road With Dave does not guarantee any results from the information, but offers it as opinion.

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About Dave Robison

Now Appearing in an Extended Engagement! Join Dave Robison as he takes you into his world and his daily life of reviving a stand-up comedy career. Prepare for side trips exploring Public Relations, marketing and business ethics. Enjoy some frequent detours describing his observations on life. Read the exploits of this self-proclaimed Renaissance-man and blooming blogger as you go On The Road With Dave. From Mobile, Alabama comes Dave Robison, a confessed Internet-aholic, middle-aged-married-man, who's generally a nice guy--he just has one or two issues. Stand-Up Comedy by Dave Robison is available for corporate events, college campuses, and nightclubs.
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