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27 commonly Used Terms in Direct Selling

Commonly used terms in Direct Selling – Ideated and Developed by Strategy India

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27 commonly Used Terms in Direct Selling

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  1. 1.Guidelines "Guidelines" is the compilation of instructions issued to assist the companies to observe self-control for maintaining ethical business practices and to avoid being booked under "The Prize Chit and Money Circulation Banning Act 1978", "The Banning Act 2017" or various acts in states including MPIDA, TNPIDA, OPIDA etc

  2. 2.Consumer "Consumer" refers to any person/s whether as an individual or as an organization (a group of individuals).

  3. 3. Direct Selling "Direct selling" is the marketing and retailing of products to people in places other than fixed retail locations. It’s primarily a B2C (Business to consumer) model with some exceptions (where the agreement is entered into between the Direct selling entity and an Entity / Organization- Proprietary, Partnership, Limited liability Partnership, One person company / Private limited, Trust, Public limited, etc.)

  4. 4. Company "Company" is a business organization that manufactures or buys and sells products or provides services in exchange for money, i.e., the organization may be a manufacturer or a trader of the product/s.

  5. 5. Direct Selling Company "Direct selling company" is a company which utilizes the services of self-employed individuals known as direct sellers as per the definition of direct seller to recommend and retail product/s.

  6. 6.Direct Seller "Direct Sellers are also known as Distributors, Associates, Independent business owners, Consultants, Networkers, Members, Advisors, Independent business associates, Affiliates, Independent representatives, etc.

  7. 7.Active Direct Seller "Active Direct seller" is a direct seller whose monthly purchase from the company exceeds INR 50.

  8. 8. Prospect "Prospect" is a person to whom an offer or a proposal is made by the Direct Seller to join a Direct Selling opportunity or to purchase goods or services.

  9. 9. Product "Product" refers to anything, goods or services, tangible or intangible that constitutes the subject of an intended direct selling transaction.

  10. 10. Saleable "Saleable" with respect to goods and / or services, means unused and marketable, unexpired and undamaged

  11. 11. Price "Price" is the money consideration for a sale of goods.

  12. 12. Quality "Quality" is the ability to perform satisfactorily in service and is suitable for its intended purpose. As indicated in the literature including brochures, labels, and presentations developed / distributed / retailed by the company. Quality of goods includes their state or condition.

  13. 13. Satisfaction Guarantee "Satisfaction guarantee" is the promise to the consumer to empower him / her to return the product if he / she does not get the results as per the expectations or as promised/claimed by the company. This policy is to address the concerns of issues regarding the quality of the product/s.

  14. 14. Money Back Guarantee "Money back guarantee" is the promise to the direct seller to empower him / her to return the goods if he / she is unable to sell the purchased product/s to the consumer/s or use them for self-consumption.

  15. 15. Negative Product List "Negative product list" is the list of products / services which are not to be promoted by the company deploying a Direct / Single level / Multilevel marketing compensation plan.

  16. 16. Special Product List "Special product list" is the list of products / services which may be promoted along with the conditions mentioned along with them.

  17. 17. Delivery "Delivery" is a voluntary transfer of possession from one party to another.

  18. 18. Office "Office" a room, set of rooms, or building used as a place of exclusively conducting business activities.

  19. 19. Enrol "Enrol" is to introduce / register / signup formally through a legally enforceable written contract to undertake direct selling business on principal to principal basis as a participant or an individual or any entity including any names mentioned under the definition of a direct seller.

  20. 20. Marketing Organization "Marketing organization" is the way of representing the tiered nature of the direct sellers in a graphical form to help them recognize their relative positions to the company or direct sellers above or below them.

  21. 21. Compensation Plan "Compensation plan" is a method to calculate the commissions/incentives and/or the rewards to be given to / among direct seller/s from the turnover achieved by them and/or their marketing organization.

  22. 22. Virtual Currency "Virtual currency" (also known and circulated in the form of Crypto-currency, e-currency, e-money, electronic cash, electronic currency, e-vouchers, digital money, digital cash, virtual cash, digital currency, cyber currency or any other name) is the money that is only distributed / exchanged / redeemed

  23. 23. Cryptocurrency "Cryptocurrency" is a digital currency that is generated by using computers to solve cryptographic puzzles while the transactions are done using cryptography. This currency may or may not be created and / or backed by any collateral or any government.

  24. 24. Pyramid Scheme "Pyramid Scheme" means a multi layered network of subscribers to a scheme formed by subscribers enrolling one or more subscribers in order to receive any benefit directly, as a result of enrolment of additional subscribers to the scheme. The subscribers enrolling further subscriber(s) occupy higher position and the enrolled subscriber(s) occupies a lower position, thus, with successive enrolments, they form multi -layered network of subscribers.

  25. 25. Money Circulation Scheme "Money Circulation Scheme" means any scheme, by whatever name called,for the promise of quick or easy money, or for the receipt of any money or valuable thing as the consideration on any event applicable to the enrolment of individuals into the scheme or on investments by the individuals as a consideration for a promise of returns for their investments. It also includes a promise of quick or easy money, which is not arithmetically viable or may not be related to sale of products by the participants or their marketing organization.

  26. 26. Direct Marketing "Direct marketing" is a method in which companies communicate directly with the consumers through formats like online advertisements, direct mailing (postal mail and email), text messaging and telemarketing.

  27. 27. Ecommerce "Ecommerce" is the  sale and / or purchase of goods or services conducted using the world wide web. This method of distribution may or may not be a part of the direct selling model.

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