WHAT DOES IT COST TO JOIN?
There is some cost in starting a direct selling business but it is usually small and subsidised to attract people to the industry. Pyramid schemes typically profit from upfront payments for the right to distribute products and recruit others into the scheme. Beware of substantial startup costs and financial incentives for progressing in the scheme.
DO YOU UNDERSTAND THE MARKETING PLAN?
Direct selling uses innovative multilevel reward structures to encourage and compensate distributor productivity. Be certain you understand the rewards on offer and they only come from selling products. If the commission structure is complicated or difficult to understand there may be a reason for this, so be careful.
ARE PRODUCTS USED BY CONSUMERS?
Distributors and consumers use the direct selling channel to acquire products for consumption. Be wary of schemes if there is little or no supply of products to consumers. Also be very wary of schemes that encourage distributors to make large inventory purchases.
IS THERE AN EMPHASIS ON RECRUITING?
Recruiting and retaining distributors is important for a successful direct selling business. But success comes primarily from product quality, sales and service. Recruiting new distributors is secondary. Be careful of schemes that focus on recruiting, not selling products.
WHAT HAPPENS WITH UNSOLD INVENTORY?
Reputable direct selling companies will buy-back unsold and marketable inventory at either the purchase or a discounted price. This is a requirement of DSA membership. Be wary of schemes that encourage large inventory purchases without this guarantee.