Be aware .... beware ---
Direct selling company vs Pyramiding company
ATTENTION Consumers : Are you planning to join in a direct selling company but in doubt if it is a pyramiding scheme ?
Then use the 8-Point Test of the Department of Trade and Industry (DTI) to differentiate a legitimate direct selling company from a pyramiding company.
8-Point Test to check a legitimate direct selling company vs a pyramiding company.
- Is there a product ?
- Are commissions paid on sale of products and not on registration/entry fees ?
- Is the intent to sell a product not a position ?
- Is there no direct correlation between the number of recruits and compensation ?
- If recruitment were to be stopped today, will the participants still make money ?
- Is there a reasonable product return policy ?
- Do products have fair market value ?
- Is there a compelling reason to buy ?
If the answer to all the questions is YES, then the company being evaluated is a legitimate company. But if there is a NO answer, then there is a high probability that it is a pyramid.
Under DTI Administration Order (DAO) nO. 21-09 Series of 2021, Section 3 it states that
DIRECT SELLING "Distributions of products through independent salesperson who sells to consumers person-to-person on a commission basis, typically demonstrating the effectiveness of the products in the homes or places of business of the costumers."
PYRAMIDING "Sales devices whereby a person, upon the condition that he/she makes an investment, is granted by the manufacturer or his/her representatives a right to recruit for profit one or more additional persons who will also be granted such right to recruit upon the condition of making similar investments."
No comments:
Post a Comment