The term “pay to play” is actually a negative term in the direct selling and MLM field. It is used to reference a program which encourages independent distributors to make purchases to qualify for commissions and rank advancement. Obviously, personal use is not unusual in the direct selling industry. However, programs in which distributors are driven to purchase product or service, more by the desire to qualify than by a genuine desire to use the product for personal use, are sometimes referred to as dominated by “pay to play” and this may suggest that the product or service does not stand on its own in the marketplace.

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At the time of ordering by a distributor, don't order more inventory unless you have sold or personally used at least 70% of what you have previously ordered.

At the time of ordering by a distributor, don’t order more inventory unless you have sold or personally used at least 70% of what you have previously ordered.

The 70% rule derives from the 1979 FTC Amway decision in which an administrative law judge recognized that Amway’s 70% rule helped prevent inventory loading (it is not a retailing rule). Basically, the Amway rule provided: at the time of ordering by a distributor, don’t order more inventory unless you have sold or personally used at least 70% of what you have previously ordered. This is one of the Amway “safe harbor” rules that you will see in the policies of leading direct selling companies.

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