Is Southwestern Advantage an MLM? Is Southwestern Advantage a pyramid scheme?
“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.
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.
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.
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. The information above, along with our other expectations, are thoroughly covered with program participants before they begin.
Federal Trade Commission: http://FTC.gov
Direct Selling Association: http://DSA.org