Senior Member from CA
joined:Nov 12, 2003
I generally despise MLM (Multi-level marketing) source goods and the starting commission is so low, it leaves very little room for profit.
However we came across a MLM that pays a 50% commission on the second tier, so we were looking at getting our wives together, with the goal of creating our own internal sales network, which will provide us with the source of goods at the 50% commission level.
This network will feed our company with product so we can sell on the web. We can't do it directly, as it would be a violation of the MLM agreement.
We would them become an unauthorized seller of goods, but would be protected from Copyright and Trademark issues by the first sales doctrine.
Once we got above the radar, I am expecting the usual cease and desist orders, and other frivilous and vexatious litigation, as the Internet is evil for most MLM's. I would play the usual delay tactics, while protecting my ass(ets).
What bothers me, is why nobody has done this (other than a few ebay sellers that run at the first sign of trouble). I don't see any Adword competition or anything for the goods in question.
Are MLM goods, overpriced, due to the complexities of the dealer network, shoddy goods, or what?
What scares me, are not the lawyers, but the lack of competition.