In direct selling there are two prominent organizations, the DSA and the MLMIA.
Why Join A Trade Organization?
By Jeffrey A. Babener © 2009
The DSA, MLMIA and DRA are there for Companies and Distributors
It is the industry trade associations, DSA, MLMIA and DRA that unify the direct selling, mlm and network marketing industry to fight for key issues like independent contractor status for distributors, favorable tax treatment for distributors, important ethics laws to weed out pyramids while at the same time supporting legitimate direct selling, protection of distributor rights and imposition of onerous federal or state regulations that might cripple the opportunities of the millions of independent distributors who support their families with involvement in home based direct selling businesses. In the network marketing industry, companies are fond of telling their distributors, "You're in business for yourself but not by yourself." Network marketing companies provide their distributors with broad support systems to enhance their businesses. But there's another important support source for distributors and their parent companies: industry trade associations.
The network marketing industry's three major trade associations are the Multi-Level Marketing International Association (MLMIA), the Direct Selling Association (DSA) and the Distributor Rights Association (DRA). Whether you are selling toys, vitamins, cosmetics or encyclopedias, these organizations bring together legislative and educational support for the entire networking industry into a common resource.
The MLMIA is located on the sundrenched coast of California in Newport Beach - no coincidence since network marketing is especially popular in the sunbelt states of California, Arizona, Texas and Florida, and Southern California is probably the center of the industry. The MLMIA has affiliates worldwide, from the South Pacific to London.
Founded in 1985, the MLMIA leans toward members from the younger generation of network marketing companies, although older companies are involved as well. Doris Wood, founder and president of the MLMIA, explains the principal reasons the association was formed.
"We felt the direct selling industry needed an organization that focused solely on the problems and issues of multilevel marketing (MLM) companies," she says. "In addition, we felt distributors needed to have a participatory role in industry issues. We are the only trade association to accept network marketing companies and individual distributors as members. Our goal is to support multilevel marketing throughout the world." MLMIA members have done just that by testifying before legislatures on industry issues and by playing important roles in cases affecting network marketing. In addition, the MLMIA helps weed out disreputable operators and pyramid schemes and has adopted ethics screening standards for its members.
Speaking on the early days of trade association and regulatory cooperation, one of the members of the MLMIA's Government-Industry Liaison Group, noted the objective of an open line of communication between the network marketing and mlm industry and government, "we speak at their meetings, and they speak at ours…it's a beneficial relationship for the industry and for consumers as well."
The MLMIA provides a wide variety of educational materials and hosts conferences on the industry, with specific segments devoted to issues of interest to individual and corporate members. "Since the organization is there to support both distributors and corporate members, we feel it's important to provide a balance of programs and activities," explains Wood.
In addition, members can obtain health insurance and benefits through the MLMIA. Visit the MLMIA at www.mlmia.org to learn about its offerings and objectives.
Founded in 1910, the DSA is the granddaddy of the MLM industry. (One of its founding members is Avon, still probably the world's most famous direct selling company.) There are independent DSAs in scores of countries, but they take their cue from the DSA in Washington, DC.
The DSA has approximately 200 member companies in the United States, and chances are that if you are affiliated with a major MLM organization, such as Amway, Mary Kay, Shaklee or Tupperware, you have access to the information and support systems of the DSA through your parent company.
DSA representatives travel tens of thousands of miles every year to meet and testify before state legislatures on network marketing issues. The crowning achievement of the organization came in 1982, when it successfully persuaded Congress to amend the Internal Revenue Code to recognize independent contractor status for direct sellers. The DSA also led the industry fight in 2008 to prevent adoption of potential onerous new FTC rules on Business Opportunity regulation.
The association is also called on to give input on pending legislation in the areas of consumer protection and ethical trade practices, including anti-pyramid laws, rules on in-home solicitations, and business opportunity registration laws. One by one, the DSA has assisted states in modernizing pyramid and mlm distribution statute laws, in particular to recognize the legitimacy of personal use of products and services by distributors for mlm and direct selling companies in the same way that sales of products and services to non- participant retail customers is recognized as “retail sales”.
What does the future hold for the DSA? Said Neil Offen, President of the DSA in one DSA annual report, "while I see us continuing to win independent contractor tax fights and affirm how crucial those and our other government relations efforts are, I also see the need for us to do more to further raise the level of integrity, openness and ethical behavior of companies, salespeople and distributors."
Individual network marketers can attend the DSA's ongoing educational conferences, held nationwide throughout the year, although the meetings are aimed at corporate executives of network marketing organizations. The DSA's sister organization, the Direct Selling Education Foundation, supports academic research and conferences on issues related to direct sales.
DSA members must agree to follow a comprehensive ethics code that commits them to fair business practices in dealing with consumers and distributors. The rules are far-reaching, covering such issues as buyback policies, inventory loading, earnings representations and deceptive recruiting practices.
In addition, the DSA tracks industry information and prints a wide variety of materials that can help companies and individual distributors. Visit the DSA for more information at www.dsa.org.
The DRA (Distributor Rights Association) is the youngest of the industry trade associations. Although the DSA is oriented to corporate participation and the MLMIA crosses both corporate and distributor lines, the DRA is dedicated to the interests of distributor rights and education. It speaks out on behalf of distributors, participates in the federal and state regulatory process, creates forums for both education of distributors as well as dialogue between distributors and company representatives. In fact, the DRA offers both distributor and corporate memberships.
Despite its distributor orientation, the DRA should not be overlooked for its contribution to promote the integrity and success of the direct selling, network marketing and mlm channels of distribution. For instance, in the 2008 run up to possible challenging changes in the FTC Business Opportunity Rule, the DRA assisted in funding empirical studies of the direct selling, network marketing and mlm industry. In addition, the DRA played a prominent role in organizing letter writing campaigns by direct selling, mlm and network marketing distributors to the “comments” process of the FTC. The result of a massive write in campaign was seen in the FTC staff’s conclusion that the proposed revised FTC business opportunity rules should exclude application to mlm businesses.
To learn more about the DRA, please visit www.mlm-dra.org.
Join the Industry in Supporting The DSA, MLMIA and DRA
The DSA and the MLMIA and the DRA are there to support the direct selling, network marketing and mlm industry, and they have demonstrated their effectiveness. Joining and participating at any level will be most productive experience.
About the author. Jeffrey Babener is widely recognized as a leading legal counsel in the MLM and direct selling industry. His law firm, Babener and Associates, has, for two decades, represented leading direct selling companies headquartered throughout the U.S. and abroad. He lectures extensively at such universities as the University of Illinois, University of Texas and University of Houston, publishes extensively in books and articles and has served on many committees of the Direct Selling Association as well as general counsel for the Multilevel Marketing International Association. He can be reached at his Portland, Oregon office at 503-226-6600 or visit his website at www.mlmlegal.com for an expansive selection of information on direct selling, MLM and network marketing.
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