Direct Sales MLM License in Malaysia: Types of Direct Sales Marketing Plan – Part 2/3

Under a direct selling, there are three types marketing plans as follows:

MULTILEVEL MARKETING PLAN

1. The company recruits/appoint as individual as a member/distributor to distribute the company’ goods;
2. The individual then appoints other individuals to form his network (downline) to sell the company’s goods. The process of recruitment of new members/distributors may continue to a reasonable level;
3. Each member/distributor shall receive a commission / bonus / incentive from his individual sales and from the sales made by his downline members / distributors (overriding bonus).

SINGLE MARKETING PLAN

1. The company appoints sales representative / agents and pays them
   salaries/commissions/a combination of salary and commissions on their sales;
2. The sales representative / agents are not allowed to appoint / sponsor other sales representative / agents.

MAIL ORDER SALES

1. Sale, by mail, of goods or services which a person conducts, either by himself or through any person authorized by him.

MARKETING PLAN

The marketing plans shall have the following characteristics:

The business does not carry on or involve a pyramid scheme as specified under Section 7, Direct Sales and Anti-Pyramid Scheme Act 1993.
Comply with the Direct Sales (Scheme and conduct) Regulations 2001, which come into operation on 15 August 2001, that is:

(a) Presentation of scheme not to be misleading

(i) In the presentation of the direct sales scheme, a person who carries on any direct sales business shall not mislead participants by overemphasizing on disproportionately high bonus or bonus payout.
(ii) Each participants shall be provided with sales kit that includes the marketing plan and code of conduct of the company.

(b) Payment of incentives

Any person who carries on a direct sales business shall provided an incentive based on the volume or quantity of goods or services sold or distributed by each participant and not based on recruitment of persons into the scheme

(c) Participants not to purchase goods or services in an unreasonable amount Each participants is required to purchase goods or service in an amount that can be expected to be resold or consumed within a reasonable period of time.

Part 3 – Direct Sales and Anti-Pyramid Scheme