Development of the Direct Selling Industry

Introduction

“Direct Selling” refers to door-to-door sales, mail order sales, and sales through electronic transactions according to the definition of the Direct Sales and Anti-Pyramid Scheme Act 1993 [Act 500], or services conducted in the following manner:

• Selling goods OR services by:
  • Going from one place to another, other than a fixed business location; or
  • Making telephone calls.
• Seeking individuals willing to enter into a contract as buyers of goods or services; and
• Subsequently negotiating with potential buyers with the aim of establishing a purchase contract.

Types of Direct Selling Business Marketing Plans

There are three types of marketing plans under direct selling businesses:

1. Multi-Level Marketing Plan (MLM)

   • Companies will recruit individuals as members/distributors to distribute the company's goods.
   • The relevant members/distributors will appoint other individuals (downline) to form their network for selling the company's goods. The recruitment process can continue to a reasonable level.
   • Each member/distributor will earn commissions/bonuses/incentives from personal sales and sales made by members/distributors within their network (over-riding bonuses).

2. Single-Level Marketing Plan

   • Companies will appoint sales representatives/sales agents and pay salaries/commissions/a combination of salaries and commissions based on the total sales made.
   • Sales representatives/sales agents are not allowed to recruit/sponsor other sales representatives/sales agents.

3. Mail Order Sales

   • Sales of goods or services conducted by an individual, either personally or through any authorized person, via mail or any other delivery method, including electronically.