Lawful Direct Selling is Not a Pyramid Scheme

What a Pyramid Scheme actually looks likeThe New York Times recently ran an opinion piece by Joe Nocera. In it, Mr. Nocera implied that all multi-level marketing companies are just pyramid schemes in disguise. Joe Mariano, DSA President, wrote an excellent follow-up opinion piece called “Lawful Sales Methods.”

The thing that surprised me about the original article is that the New York Times would run it at all. Any amount of research will show that the courts have ruled decisively on the definition of pyramid schemes. What sets direct selling apart is the fact that money is made primarily through product sales, not the building of pyramids where only the people at the top make money. Legitimate direct sellers are not paid for the act of recruiting. They are only paid when products are sold, and the commissions they earn are rewards for the work that they do to sell those products personally, and help others sell them.

People are not cheated out of money when they join direct selling companies. They purchase a business kit (usually around $100-$200) with sample products to demonstrate and business supplies. Try setting up a business of your own for less than it costs to start a direct sales business! And then, if someone decides not to continue in a business, DSA member companies have a buy-back policy that allows distributors to return unused merchandise. Again, try doing that with your own business! There are more protections built into a direct selling business than most other entrepreneurial ventures! So all these attacks honestly make me scratch my head. What, exactly, is the problem here?

Sure, not everyone is going to be good at direct selling. Not everyone is good at being a barista either. But the direct selling industry has done a great job at self-regulation. Those companies that join the Direct Selling Association willingly submit to industry self-regulation and the DSA Code of Ethics which are put in place to protect distributors and consumers.

And there are millions of direct sellers around the world who have benefited from direct selling. You probably know some. Not everyone makes millions of dollars (few do, in fact.) But many people make a car payment, grocery money, vacation money, school tuition, etc. That extra monthly income is the difference between making it and not. And as far as I’m concerned, that’s the most powerful testimony in favor of the direct selling industry that I know.

It’s time for rich investors with an agenda and journalists who don’t bother to do research to find another whipping boy. The direct selling industry is just as legitimate as retailing and online sales. The courts have decided it time and again. Direct selling puts financial power in the hands of the everyman. Isn’t that what we all want? Enough with rich people trying to tear down the little guy.

Direct selling is a legitimate, powerful way for people to make a significant impact on their personal finances through the sale of goods and services to their neighbors, and gain some personal development along the way. It’s time for those with other agendas to butt out, and let us get on with it.

Your thoughts?

5 Responses to Lawful Direct Selling is Not a Pyramid Scheme
  1. Chuck Holmes
    January 2, 2016 | 5:52 pm

    Many media outlets hate our industry because we don’t pay them a penny in advertising. They can even see our industry as a threat. I’m glad that the article was rebutted, and I am very surprised, like you, that they ran the original article in the first place. Just my two cents. Great write up.

    Chuck
    Chuck Holmes recently posted..December 2015 Month in Review for My MLM Business and MLM Blog

  2. Karen H
    February 24, 2015 | 9:49 pm

    I’m glad you took on NYT. I’ve passed this article on to my team members. Thank you!
    Karen H recently posted..Shaklee’s Targeted Immune System Products

  3. Anne Petracca
    February 23, 2015 | 8:19 pm

    Thank you Jennifer for your article and helping to clarify the truths of our incredible industry.
    We are an industry that is very often misunderstood and often not considered as a “real” job – however many of the people I know would call it an “unreal” job! I am an advocate of our industry and proud of the difference it makes to the lives of others.

  4. Alice
    February 22, 2015 | 11:30 pm

    The income I earn from my Avon business has made a huge impact on my life .
    I enjoy my work and love the fact that I can choose and set my own hours as to when I work
    It does take motivation to make myself do my job
    But I do enjoy meeting new people and visiting with my customers
    It makes life interesting

  5. Nicki Keohohou
    January 31, 2015 | 12:20 am

    Thank you Jennifer for your ongoing support of the direct selling profession. There are so many good people and great companies that make this an amazing profession. We all just need to keep doing the right things and speaking up and eventually the negative people will give up on attacking us.

    I am proud to be in this profession and to have the opportunity to work with entrepreneurs with a desire to serve others.

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