Have You Read Your MLM Policies and Procedures?

If you think that an MLM company would never have P&Ps that would disqualify you for the commissions or bonuses that you have earned, think again.

I have recently decided against joining a company that had clauses in their MLM Policies and Procedures that would prevent me from being associated with any other company.

As I am already involved with companies that I’m not actively building anymore, and this alone could be used by the company I was considering to stop paying me after I build a huge organization.

And to beat that, the document stated that if I left that company, there would be a period of 12 months where I would not be permitted to be associated with any other company!

It even stated that any member of my family was not permitted to represent any other company!

There are other MLM Policies and Procedures  when you are not actively recruiting new members, or actively involved in leadership events, live trainings, etc., you will be disqualified from the largest percentage of your paycheck.

Why Consider Your MLM Policies and Procedures?

Why would you ever think to ask this question when the point of MLM is to build a passive residual income, in other words, a royalty income? Most people don’t.

But, this is a growing trend in MLM Policies and Procedures, to add clauses that state you are only qualified to receive commission and bonuses when you are actively sponsoring a certain number of people per month, or at least showing on paper how you have helped motivate your downline to do so, including giving training sessions, holding conference calls, etc.

Some may require that you maintain a certain number of retail customers, and even new customers per month. I just saw this with my own eyes in a P&P I was looking at last night!

This means you can’t retire! Or if you do, your income stops.

What if you were to fall ill, or have extended times where you cannot be doing business? Would your MLM Policies and Procedures protect you, or the company?

So wouldn’t you think that having built a huge downline that you should be able to take some extended time off? Isn’t that the lifestyle you were after in the first place?

Ignore Your MLM Policies and Procedures With Care!

Remember that you MLM Policies and Procedures are a legal agreement between you, the representative or distributor, and the company you are representing.

In some ways of course it makes sense they would have to protect themselves, but to the extent that they block you from your royalty or residual income after you’ve worked hard to build a huge team and bring in volume for that company, that is where I have to stand firm in my own decisions.

I have already worked over 20 years for a company that cares nothing for me and has proven that I am only a number, dispensable and replaceable!

I heard recently about a woman who had built a huge business but fell ill. She was in the hospital for weeks. When she got her check after having been over a month in the hospital, she found that it had dwindled from a 5 figure check to just a few hundred dollars.

She had failed to meet her leadership qualifications for the month, as stated in her MLM Policies and procedures document.

Another story involved a woman who built it so big she passed her upline, which caused them to be extremely jealous, and they were also vindictive.

Before this lady built the program, she did tell the company that her fiance was promoting another MLM company.

But guess what?

Her MLM Policies & Procedures state that you cannot make any money from another network marketing company – not even an affiliate program! If you violate this provision, you can be terminated. And these restrictions apply to everyone living in YOUR household!

She was about to receive a $7,000 bonus check and all of a sudden her website was turned off. Everything is shut down. Her check didn’t arrive. The company didn’t even send her a letter.

Her upline called and told her she was terminated because her fiance was in another program. But she had already told the company they weren’t married and that he was in another program.

So it had nothing to do with her or her network marketing strategy, but because they lived in the same household, the company used that lever to get her out of the line of compensation.

The company views 2 people living in the same household as if the two people are the same. And they can do that because it’s in the Policies & Procedures.

What are the chances the company would ever find out about this if not for the viperous upline? Because this lady just got terminated, her sponsor inherits her entire organization. It all rolls up.

Read Your MLM Policies and Procedures!

Well, you might say, they aren’t going to know, or why would they care? They won’t be checking on little ol’ me….

But let’s say you do really well, that you end up with a very sizable check every month. What happens when the company’s compensation plan, or the company itself is having trouble holding up?

They will take the time to utilize those clauses. That’s why they put them there.

I heard another story just last night (these are far more frequent than you’d ever think) about someone whose house had burnt down, when just after that, the MLM company they had been working for happened to call up and ask for the retail receipts that he was obligated to keep per their P&Ps (interesting timing wouldn’t you say?).  Of course he had kept them, but they had burned in the fire and were gone. And so then was his paycheck.

What to Look For

There are many phrases that you should be on the lookout for in your P&Ps as well. Including any line with the word ‘terminate‘ or ‘termination‘.  Or ‘without cause‘, or ‘jury‘ or ‘court‘. Read carefully any statements containing these words. You may be signing away your rights.

Any time you have a yearly renewal, this should make you think as well. The company could have stated that they may opt not to renew you, and will not have to give any reason for this.

This would not lose the company any business as they perceive it. Your downline simply rolls up to the next distributor. Of course then you may say that you would just recruit those that you sponsored into your next company.

Think again. There are other phrases that would allow the company to take you to court for doing just that. And if you think you can take them to court, you’d better check your ‘Arbitration’ section very closely.

MLM company Policies and Procedures are truly worth your time in reading. And the longer the P&P document, the more legaleze you see in them, the more red flags should be going up.

Any MLM Policies and Procedures more than 10 or 12 pages long should really get your attention. They are counting on you not having the patience to read them!

This also goes for the ‘Distributor Agreement’ and / or ‘Distributor Code of Conduct’ that you will be agreeing to.

This is just to give you a heads up that those P&Ps are a lot more than just paperwork for you, something you check off when you sign up. If you are thinking of taking this business seriously then do take it seriously.

In addition to your MLM Policies and Procedures, you should be aware of what your compensation plan pays out in volume commission, how much breakage exists (what percentage of dollars spent qualifies for bonus points and how often a distributor can be disqualified from being paid on those points).

If you are looking for a company with an MLM Policies and Procedures that have no ‘gotcha’ clauses, take a look at SISEL International which has integrity in addition to fantastic products and a huge commission payout that beats any that I have seen in my experience!