Legitimate Direct Selling Companies
1. The start-up fee for all ethical multi-level selling companies is generally low, primarily to cover training materials, sales aids or demonstration kits.
2. Such companies sell a wide range of quality products to the general public. The bulk of the sales are on repeat sales form satisfied customers. This is only possible because these companies spend millions on research and development to develop quality products.
3. Many companies have a 100 percent money-back guarantee. Dissatisfied users (and there are relatively few) could exchange the products back for money or for an equivalent amount in other products.
4. These companies are interested in long-term business. In every country that they operate, this criterion is important because the companies have an obligation to their distributors who are small businessmen in their own rights.
5. Recognition of achievement is based on efforts. This means that a distributor’s income is commensurate with the efforts he/she puts into the business.
6. Established companies depend on selling to customers quality products which offer value for money in order to establish a market.
7. These companies build up networks of independent distributors to sell products.
8. They have strict Rules of Conduct which, among other things, forbids its distributors to load up on inventory.
9. Distributors sell products and or services
10. Direct selling is a popular method of retailing which is recognised as a lawful and legitimate business in many countries including the US.
1. Pyramid schemes often disguise high entry fees as part of the price charged for required purchases of training, product inventory etc.
2. Pyramid schemes make virtually all their profits from recruiting.Pyramid schemes are frequently disguised to appear as legitimate direct selling companies. Such schemes are not interested in marketing these products which are of dubious value. Instead, money is made in typical pyramid fashion, from recruiting, with new distributors being pushed to purchase high cost/large inventory when they sign up.
3. Pyramid schemes will not buy back unsold inventory. Such schemes will collapse very quickly if there is this condition for re-purchase of goods.
4. Pyramid schemes are get-rich quick schemes. The nature of the pyramids, in which large numbers of people at the bottom of the pyramid pay money to a few people at the top, clearly explains why the scheme cannot sustain itself for long. Position could be purchased.
5. Position could be purchased.
6. Pyramid schemes are not concerned with repeat sales to users of the products. Profits are made on volume sales to new recruits who buy the products not because they are useful or attractively priced, but because they must buy them to participate in the scheme. As a result, new participants are stuck with products that are way below the market value in relation to the high entry fees paid by them. Should the pyramid scheme collapse, there is no way for the participants to recover their "investments".
7. Promoters of a pyramid scheme are engaging in fraud, knowingly deceiving participants in the schemes.
8. Participants in a pyramid scheme have no choice but indulge in inventory loading/high fees to participate.
9. Participation is essentially based on recruiting, not necessarily on the sale of products or services.
10. Pyramid schemes have been outlawed throughout the United States and many countries many countries around the world.
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