No pyramid or Ponzi schemes in multilevel marketing

15 Sep 2016

The Direct Selling Association of South Africa (DSASA) has reassured South Africans that direct selling and multilevel marketing are neither pyramid nor Ponzi scheme, but to still be on guard against falling for "get rich quick" schemes.

The best way to do so is to arm yourself with knowledge and the facts about direct selling and multilevel marketing, and how they differ from the pyramid and Ponzi schemes that frequently make headlines.

Simply put, pyramids and Ponzis have no code of conduct or auditable financial results and are “too good to be true as they convince ordinary South Africans that they can achieve extraordinary riches, based on no work and very few facts,” warns Ernest du Toit, chairman of the DSASA.

No pyramid or Ponzi schemes in multilevel marketing

Instead, these simply enrich their founders and tend to leave the little guy out of pocket and scrambling to recoup his or her investment when the scheme collapses.

Direct selling, on the other hand, is a way to contribute to the economy with South African direct sales figures rising 13.1% from R9.66bn in 2014 to R10.93bn for the 2015 financial year. It provides income-generating opportunities through sales of products not commercially available through retail and sellers earn revenue on every sale they make, as well as sales of other people in their network.

Single-Level Direct Selling, Multi-Level Marketing (MLM), Network Marketing and Referral Marketing are forms of direct selling, each supporting different compensation plans and marketing initiatives supported by DSASA member companies.

Find out more from DSASA’s website.