Is direct selling a pyramid scheme?
This is another question that we often here and we’d like to clear things up for you.
There’s a big difference between legitimate direct selling companies and pyramid schemes. Pyramid schemes seek to make money from you (and quickly). A legitimate direct selling company like ours seeks to make money with you as you build your business (and ours) by selling real quality products.
As you are obviously interested in direct selling we encourage you to look and analyze what is out there. Investigate carefully. A good way to begin is to ask yourself these questions:
1. How much are you required to pay to become an independent consultant? If the startup cost is substantial, be careful! The start-up fee in direct selling companies should be low, basically to cover basic registration costs or to afford you to purchase sales samples.
At Wacoal the initial investment is only P4,500 inventory. If that amount is still too much for you, we allow you to purchase any amount less but only add a P750 service fee. We want to make it easy and inexpensive for our Partners like you to start selling. Pyramid schemes, on the other hand, make nearly all of their profit on signing up new recruits. Therefore, the cost to become a distributor is usually high.
Will the company buy back unsold inventory? If not, beware! We don’t ask you to carry any inventory. We prefer for you to have sales samples that you can use to generate sales transactions. However, some of our partners like to carry inventory for convenience. Those that do are protected with a buy back policy of up to 90% of the unsold product within a 60-day period from the date of purchase.
Are the company’s products sold to consumers?
If the answer is no, then stay away! This is the most important element. Direct selling (like other methods of retailing) depends on selling to consumers and establishing a market. This requires quality products that are competitively priced. Pyramid schemes, on the other hand, are not concerned with sales to end users of the product. 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.
So do you now see the difference? At Wacoal, we treat you as our partners. We want to help you grow your business because if you do, we grow ours as well