MLM and disguised pyramid selling not only seriously disrupt the normal economic order of society, but also seriously endanger social stability. However, after the promulgation of the Regulations on Prohibition of MLM and the Regulations on Direct Selling Management, various pyramid schemes and disguised pyramid schemes took the opportunity to rise again, and their deception continued to "innovate", resulting in many people being deceived. However, no matter how MLM is transformed, as long as we pay attention to observation and distinguish the difference between direct selling and illegal pyramid selling, we can always see the essence of these scams.

What is direct selling? The World Direct Selling Association puts it this way: Direct selling refers to the direct introduction of products and services to consumers by independent marketers in places other than fixed retail stores (such as personal residences, workplaces or other places), and the marketing of consumer goods through explanations and demonstrations. The definition of direct selling in the Regulations on Direct Selling Management, which came into effect on February 1 2005, is: Direct selling refers to the distribution mode in which direct selling enterprises recruit direct sellers, and direct sellers directly sell products to final consumers outside the fixed business premises. Legal direct selling is to deliver high-quality products directly to consumers, and at the same time, it also has perfect after-sales service guarantee and return mechanism, which can avoid the economic losses of consumers and salesmen. Comparatively speaking, the definition of direct selling in the Regulations on the Administration of Direct Selling is clearer.

So what exactly is illegal pyramid selling? According to the "Regulations", pyramid selling refers to the behavior of organizers or operators to develop personnel, calculate and pay the remuneration of the developed personnel based on the number of directly or indirectly developed personnel or sales performance, or require the developed personnel to obtain the qualification to join on the condition of paying a certain fee, seek illegal interests, disrupt economic order and affect social stability.

According to MLM Regulations on Prohibiting MLM and Regulations on Direct Selling Management, there are five main differences between direct selling and illegal pyramid selling:

1. Is there an admission fee? The entrance fee for illegal pyramid selling is relatively high, but it is not in a regular direct selling company.

2. Whether to rely on high-quality products. Illegal pyramid selling companies often rely on worthless but high-priced products, while direct selling products are value for money, even value for money.

3. Whether the product is in circulation. The illegal pyramid selling enterprise is to let all the entry-level sales representatives subscribe for products, but these products are not in circulation in the market. The products of direct selling enterprises are delivered to customers by manufacturers through marketing representatives.

4. Is there a return guarantee system? Once the illegal pyramid selling products are sold, they can't be returned, or try their best to set obstacles for customers to return. Regular direct selling enterprises will provide customers with perfect return guarantee.

5. Has the sales staff structure surpassed? Illegal MLM companies often present a "pyramid" structure among salespeople, and the consequence is that those who join first are always ahead of those who come later. In direct selling enterprises, regardless of the order of participants' joining, the performance in income is "more work, more gain".

Another important basis for discrimination is that legitimate direct selling companies have their own factories and scientific research institutions, and the products they produce and sell are approved by the state. The company and the direct seller are cooperative, and the benefits are based on the sale of goods. On this basis, illegal pyramid selling companies do not have their own factories, but sell inferior products from other manufacturers to offline members layer by layer, and each layer has an intermediate profit bonus. This kind of "indirect sales", which earns intermediate profits through commodity conversion, makes the goods far from reality. The more pyramid schemes, the higher the price of goods, so that the products of the bottom people can't be sold at all, and the products are not allowed to be returned, which makes great economic losses.

In order to further rectify the domestic direct selling market, the State Administration for Industry and Commerce designated 2006 as the "year of cracking down on pyramid schemes with high pressure" at the national industrial and commercial administration work conference held on June 5438+February 5, 2005. It is the key work in 2006 to crack down on pyramid schemes and disguised pyramid schemes with a high attitude, and at the same time, it will resolutely investigate and deal with all kinds of illegal acts in direct selling.

Wang Zhongfu, director of the State Administration for Industry and Commerce, stressed that in 2006, the industrial and commercial authorities will strengthen the inspection of key areas such as areas prone to pyramid schemes, especially the monitoring of rental houses, focusing on cracking down on "pulling people's heads", "team remuneration" and pyramid schemes using the Internet. At the same time, do a good job in the supervision and standardization of the access of direct selling enterprises, do a good job in the recruitment, training and remuneration of direct sellers, and resolutely investigate and deal with violations.

However, it is far from enough to put an end to the harm of illegal pyramid selling only by the state's severe crackdown. It is also necessary to seek the cooperation and support of the whole society. As long as consumers have a good grasp of the difference between illegal pyramid selling and direct selling, they can polish their eyes, see clearly the faces of various pyramid selling and disguised pyramid selling activities, avoid the infringement of illegal pyramid selling, and completely eradicate the soil of illegal pyramid selling together with the competent state departments. QQ5757642 14