Sale multiniveau

The sale multiniveau carries many names according to the organization which deploys it ( marketing by multiple stages , sale in network by co-optation , marketing of network , etc (in English Multi Level Marketing ). It indicates a structure of the network of sale not to confuse with the pyramidal Vente illegal in almost all the countries.

Principle

The sale multiniveau itself was invented in the Années 1960. It can be described as a hierarchical structure of the network of sale in which the retailers can recruit new salesmen, and be then partly remunerated on a commission basis on the sales of the recruits. When there are no sold products or services, put on the market, one deals with swindle (pyramidal Vente).

Examples

The “legal” term of sale multiniveau is frequently employed in the prospections made via Internet.

In the United States, Amway is emblematic of this mode of trade. Certain distributers draw a big part from their profits of the sale of documentation on motivation and sales engineering. That sullied the reputation with Amway. Today, Amway dictated rules making it possible to limit this kind of practice. In Europe M.S.O an association of Amway distributers proposes formations with cost price.

In France, the European Grouping of the professionals of marketing (GEPM), is included in the dangerous lists of the sects of the French parliamentary report of 1995, and was the subject of charge on behalf of associations anti-sects, denouncing the enrollment of the associates.

In Canada, Vision Financial Freedom proposes a method to get top-of-the-range products by spending hundred US dollars per month to get them for the fair prices while making it possible to gain incomes by recruiting members who have the same objective.

Herbalife is a product range thus marketing also passes by the sale multiniveau, in particular via Internet.

LR is a distribitor of products of care and body beauty who uses the legal system of sale multiniveau. Many Stars international joined this company.

This system of sale makes it possible to reach has an auxiliary and of the same income to become financially independent.

Many systems of classifieds on line refuse the advertisements related to this type of trade, by precaution, taking into account the proximity with the pyramidal Vente.

The Canadian law on competition

File of the Office of competition on multiple stage marketing
Law on competition (articles 55 and 55.1)

The French law

The law authorizes the “networks of sale consisted recruitment in chain of members or associates”, under conditions, with in the spirit of the law, prohibition of the pyramidal Vente.

Thus, a legal network will take care to respect the following constraints:

the commissions of the “godsons” are taken only by one restricted and fixed number of hierarchical levels, so that it is not necessary “to hope for financial profits resulting from a geometric progression of the number of the recruited or registered people”.
no benefit must be carried out during recruitment, even in a diverted way (formation, opening inventory not reprenable). The commissions are subordinated to the sale of a certain quantity of products or services.

References

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