Party plans vs. MLM

[AlisonMSmith]

Originally Posted by DeborahDeGrande

Most today are a combination of "both"...there is no versus although party plan focuses more on retail sales than recruiting.

Yes, that was my position. I have thought the segmentation was mostly inaccurate, since party plans are almost always a SUBset of MLM.

Originally Posted by LorettaA

Those in party plan can make money strictly from selling product to customers.

I think, legally, all MLMs must provide a profit mechanism outside of recruitment. Aren't they otherwise merely classified as a Ponzi scheme? Since all the payment only comes from more signups?

I'm not a legal expert, that is just my understanding.

Also, party plan has a hostess program. I don't think mlm classified companies have hostess programs, but I could be wrong.

I think most companies don't--although I have seen "regular" MLM associates do parties in order to present their business many times. I don't think Amway is considered a "party plan" but I've been invited to dozens of Amway parties, including those with a host who wasn't (yet) an Amway member.

Of course, you could have a classification system that said: MLM>with hostess MLM>without hostess. But they'd still both be under the MLM umbrella.

Thanks for the input,

Alison

[LorettaA]

Originally Posted by LorettaA

Those in party plan can make money strictly from selling product to customers.

I think, legally, all MLMs must provide a profit mechanism outside of recruitment. Aren't they otherwise merely classified as a Ponzi scheme? Since all the payment only comes from more signups?

I'm not a legal expert, that is just my understanding.

Also, party plan has a hostess program. I don't think mlm classified companies have hostess programs, but I could be wrong.

I think most companies don't--although I have seen "regular" MLM associates do parties in order to present their business many times. I don't think Amway is considered a "party plan" but I've been invited to dozens of Amway parties, including those with a host who wasn't (yet) an Amway member.

Of course, you could have a classification system that said: MLM>with hostess MLM>without hostess. But they'd still both be under the MLM umbrella.

Thanks for the input,

Alison[/QUOTE]


I was thinking along the lines of those that say "no selling" because "you just buy would you would normally use anyway." So they are saying that you don't need to sell to any customers.

[Yuliya Mironova]

Originally Posted by LorettaA

I was thinking along the lines of those that say "no selling" because "you just buy would you would normally use anyway." So they are saying that you don't need to sell to any customers.

There are a few that say that in their promotional materials, Loretta but if they actually trade that way, they don't stand up to legal scrutiny in the long run. There have to be retail sales and that means sales to people who are not distributors. I know that companies can get away without them, sometimes even for long periods of time, if there aren't enough complaints for regulators and courts to start taking action, and some do, but they're breaking the law. There are some legal references here if anyone wants them.

[AlisonMSmith]

Originally Posted by Yulia

There are a few that say that in their promotional materials, Loretta but if they actually trade that way, they don't stand up to legal scrutiny in the long run.

That's what I would have said. IMO if a company claims there is not selling, then there is no real business, it's a scam.

It's like taking tax credits to rearrange your furniture and shop for your own groceries. Yes, you can do it for a couple of years, but then the profit requirement won't be met. [img]smileys/smiley1.gif[/img]

Alison