What is direct sales?


It doesn’t matter if it is Tupperware, essential oils, teas, or leggings that multi-level marketing schemes try and get you to sell; you, the individual distributor, won’t make any money. Multi-level marketing (sometimes known as a pyramid scheme or direct sales) is defined by Oxford as “the practice of selling goods or services on behalf of a company in a system whereby participants receive commission on their sales as well as the sales of any participants they recruit.” To become a sales representative for one of these companies, individual distributors pay a certain amount of money to receive a package of items to start selling. Yes, that means the distributor must pay to start working. It seems counterintuitive, but that’s how these companies make the majority of their sales, not through actually selling their products to customers.
Lularoe a fashion company that mainly sells leggings is an alleged major pyramid scheme. On their website, they state “LuLaRoe Independent Fashion Retailers create shopping communities where they connect with their customers on a personal level, in person or online. This modern, relevant way of shopping creates meaningful, long-lasting relationships. Join today to become an Independent Fashion Retailer!”
To become a sales rep for them you have to purchase a starting package that costs a whopping five thousand dollars, it has now been lowered though because of the loss in sales in the recent years.(https://www.mompreneuradvice.com/) Even if you do manage to make a profit, it is very low. According to an article on Inc.com, the average MLM rep makes about $2,400 per year selling products.