The World Direct Selling Association defines the concept of direct selling as follows: Direct selling refers to the direct introduction of products and services to consumers and the marketing of consumer goods by independent marketers in places other than fixed retail stores (such as personal residences, workplaces or other places) in a face-to-face manner.
According to the regulations, direct selling companies have a set of rules and regulations, but as distributors, they may not necessarily abide by these regulations. There are often some problems in propaganda, such as exaggerating the effect and false propaganda. , and even turned direct selling into pyramid selling, which became deceptive direct selling in China.
Extended data:
MLM refers to the illegal behavior that organizers and developers calculate and pay remuneration to the developed personnel on the basis of the number or performance of the directly or indirectly developed personnel, or require the developed personnel to obtain the qualification to join on the condition of paying a certain fee. The essence of pyramid selling is "Ponzi scheme", that is, the money of the latecomers is distributed to the income of the pioneers. To identify pyramid schemes, we need to look at three characteristics:
1. Entry fee: whether it is necessary to subscribe for goods or pay fees to obtain the qualification to join or develop the qualification of others to join, so as to seek illegal benefits; 2. Pulling people's heads: Do you need to develop others to become your own downline, and pay the developed personnel according to the number of people rolling directly or indirectly to seek illegal interests?
3. Payment method: whether to calculate the payment according to the sales performance of the direct or indirect development personnel to seek illegal benefits. If it meets the above characteristics, it may be suspected of pyramid schemes.
References:
Baidu encyclopedia -MLM