Our Business Model

Is Southwestern Advantage an MLM? Is Southwestern Advantage a pyramid scheme?

No. Misinformation has caused many people to assume that direct selling is the same thing as multi-level marketing (MLM). Even worse – some confuse direct selling with illegal pyramid schemes. The fact is, they’re extraordinarily different. Pyramid schemes are extremely rare, as they are quickly dismantled by law enforcement. In the past, pyramid schemes have tried masquerading as MLM or direct sales, which has caused confusion with many people. There are clear differences that we felt are important to share, because the spreading of misinformation helps no one. 
 
Southwestern Advantage is the oldest direct selling program in the U.S. The focus of participants is on selling educational products directly to consumers without the expense of traditional advertising or a retail storefront. There are no recruiting requirements or start-up purchases. The profit participants make is the difference between wholesale and retail – the same as any small business owner.


“There are no sales quotas set by Southwestern Advantage, as the representative is an independent contractor running a single-level direct sales business.” –Better Business Bureau


We’re incredibly proud of our program’s 150+ year history, but we’re even more proud to be associated with the young people who have the character it takes to participate. Misinformation is often shared online and in conversation – sometimes intentionally, just to create confusion. Below is additional information to clarify the differences.

southwestern advantage

DIRECT SALES 


Direct selling is a traditional way of marketing goods/services directly to consumers outside of a physical retail establishment. 

Direct selling demonstrations are typically done person-to-person. Orders are taken, payment is collected, and products are delivered. The difference between wholesale and retail is the direct seller’s profit. 

MULTI-LEVEL MARKETING

 

This model is recognized by the U.S. Federal Trade Commission as a legal business model. Typically MLM recruiters are also the product consumers, and joining often requires the purchase of a start-up kit. 

 

MLM companies typically charge their participants membership or sign-up fees, and many have minimum product purchase requirements. 

 

 

As a single-level direct sales program, Southwestern Advantage does not fit this model.

PYRAMID SCHEMES


A pyramid scheme is an illegal business model that compensates participants primarily for recruiting new participants, rather than for selling products or providing a service. 


Southwestern Advantage has worked with the Direct Selling Association to help lawmakers in 26 states draft additional legislation that further-exposes illegal pyramid schemes and protects consumers. 

Southwestern Advantage has testified in support of legislation against pyramid schemes. We will continue our efforts to educate consumers, and we stand with other member companies of the DSA who uphold their Code of Ethics.
 
Learn more:
 

Federal Trade Commission: http://FTC.gov 

 

Direct Selling Association: http://DSA.org

Direct Selling News: http://directsellingnews.com
Better Business Bureau: http://BBB.org

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