Amy Robinson
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6 months ago
in Is Multi Level Marketing a Pyramid Scheme? on The Savvy Entrepreneur
This is great information - and as Cristina mentioned, she has only scratched the surface. Another excellent resource that she did not mention in her list is the Direct Selling Association - www.directselling411.com. You can find a list of more than 200 companies that are required to abide by the Association's Code of Ethics. This Code provides safeguards for both sellers and consumers of the product - if you do business with one of these companies you know you have the protection of the Code working for you. The Code is administered by an Independent Code Administrator. It works proactively and reactively - companies know they must comply with these standards, but if there's ever a problem, you have recourse.
It is critical to carefully research any company before you join - DSA member or not. Make sure you fully understand the company, how the compensation plan works and what you'll have to do to achieve your goals.
It is critical to carefully research any company before you join - DSA member or not. Make sure you fully understand the company, how the compensation plan works and what you'll have to do to achieve your goals.
6 months ago
in Marketing Lingo Defined: Multi Level Marketing on The Savvy Entrepreneur
Cristina,
I’m so glad you will be doing a series on multilevel marketing! This is a great topic because there’s a lot of misinformation floating around out there. In fact, the Direct Selling Association recently launched a new Web site, www.directselling411.com, designed to provide balanced information about direct selling and address frequently asked questions on the topic.
I’m looking forward to your future posts, but wanted to expand on a couple things you said.
First, many people assume (for obvious reasons!) that multilevel marketing is a marketing plan or strategy. In fact, MLM refers only to the compensation plan. As you described, a multi-level plan provides compensation on one’s own sales as well as the sales of those they have recruited. The sales strategy used by companies that have a multi-level compensation plan is usually either party plan (group of people at the home of a hostess) or person-to-person (usually one seller and 1-2 potential customers.)
You also noted that most direct sellers must become clients themselves through minimum purchases. While it is true that most direct sellers also use the products and services they sell (and most were customers before signing up as a rep!), minimum purchase and inventory requirements are becoming increasingly rare. In those cases where there are such requirements, it’s good to work with a DSA member company because of the buy-back policy that’s part of the DSA Code of Ethics. It helps ensure one doesn't risk financial loss by trying direct selling.
The questions you propose to address are all of great interest to those researching direct selling, and each is addressed in some detail on www.directselling411.com – which I like to summarize by saying it looks at the good, the bad and the misunderstood of direct selling. I hope this will be a helpful resource for you and your readers.
Amy Robinson
Direct Selling Association
I’m so glad you will be doing a series on multilevel marketing! This is a great topic because there’s a lot of misinformation floating around out there. In fact, the Direct Selling Association recently launched a new Web site, www.directselling411.com, designed to provide balanced information about direct selling and address frequently asked questions on the topic.
I’m looking forward to your future posts, but wanted to expand on a couple things you said.
First, many people assume (for obvious reasons!) that multilevel marketing is a marketing plan or strategy. In fact, MLM refers only to the compensation plan. As you described, a multi-level plan provides compensation on one’s own sales as well as the sales of those they have recruited. The sales strategy used by companies that have a multi-level compensation plan is usually either party plan (group of people at the home of a hostess) or person-to-person (usually one seller and 1-2 potential customers.)
You also noted that most direct sellers must become clients themselves through minimum purchases. While it is true that most direct sellers also use the products and services they sell (and most were customers before signing up as a rep!), minimum purchase and inventory requirements are becoming increasingly rare. In those cases where there are such requirements, it’s good to work with a DSA member company because of the buy-back policy that’s part of the DSA Code of Ethics. It helps ensure one doesn't risk financial loss by trying direct selling.
The questions you propose to address are all of great interest to those researching direct selling, and each is addressed in some detail on www.directselling411.com – which I like to summarize by saying it looks at the good, the bad and the misunderstood of direct selling. I hope this will be a helpful resource for you and your readers.
Amy Robinson
Direct Selling Association