Distribution and direct marketing differences and similarities

One of the differences: Whether to sell products as the basis of business operations. Direct selling is based on the sale of products as a source of revenue. The illegal pyramid scheme is to pull people to make profits or through the sale of shoddy or substandard products in disguise to pull people to make profits, or even no products at all.

Difference two: there is no high entry fee. The salesmen of direct selling companies do not need to pay any high entry fee, and will not be forced to subscribe to the goods. In illegal pyramid schemes, participants pay a high entry fee or are required to subscribe to a certain number of products in order to pay a high entry fee in disguise as a condition for participation, and are encouraged to pull people in by any means to earn profits. The company's profits are also based on the entrance fee, which is actually a disguised financing behavior.

The third difference: whether to set up store business. Direct selling companies set up open or counter stores, salespeople are directly with the company to sign a contract, and their practice behavior is directly subject to the company's regulation and management. The illegal pyramid scheme operators through the development of personnel, organizational networks engaged in no store or "underground" business activities.

Difference four: compensation is distributed according to labor. Direct selling companies provide pragmatic income-generating opportunities for people who are willing to work hard, rather than getting rich overnight. Each salesperson can only calculate the compensation according to his/her personal sales, which is allocated by the company from the operating funds, and directly issued to his/her designated account after the company deducts the tax uniformly, and there is no relationship between the upper and lower lines. In contrast, illegal pyramid schemes solicit people to engage in disguised pyramid schemes by using high returns as bait, and participants' uplines extract remuneration from the downline's initiation fee or the so-called performance.

Difference No. 5: whether there is a withdrawal, return guarantee. The salesperson of a direct selling company is free to choose to continue the business or quit according to his or her personal wishes, and the company provides customers with a perfect return guarantee. The illegal marketing usually forced to agree to non-returnable or very harsh conditions of return, consumers have purchased the product is difficult to return.