Questions to ask..

when you are thinking about signing up, be sure to ask questions about the following:

• Start up costs. The start up costs in direct selling companies are generally modest – usually the cost of a sales kit – and are often less than $100. Legitimate companies want to make it easy and inexpensive for you to start. On the contrary, pyramid schemes make their money through fees paid by new recruits or by loading inventory and/or training aids on them. High entry fees should be a warning sign.
• Unsold inventory. Be sure to ask how much inventory (if any) you will be required to purchase and what the terms of return are if you decide to leave the business. DSA member companies, for example, are required to buy back unsold marketable inventory and sales aids purchased within the prior 12 months if you decide to quit the business, for at least 90 percent of the price you paid for them. Beware of opportunities that encourage “front end loading,” or buying large inventories of unreturnable products to reach achievement levels or receive a “special” or larger “discounted” price.
• Compensation. Is the money you’ll earn based on the sale of products or services? The answer should be “absolutely.” This is a key element of a legitimate business. Direct selling, like other methods of retailing, depends on selling to customers who use and/or consume the product. This requires quality products and services sold at competitive prices in quantities that can reasonably be used and/or resold. Beware of any business that claims you can get rich by solely using their products or by recruiting new people into the business.