Explore this 8-point test from the World Federation of Direct Selling Associations (WFDSA) and the Direct Selling Association of the Philippines (DSAP) and determine if a direct selling company is credible — or just another pyramid scheme in disguise 🧱.
Is there a product? 📦
Every legitimate direct selling company should have a real, tangible product or service. If the focus is more on recruiting than selling, that’s a red flag.
Are commissions paid on the sale of products and not on registration or entry? 💰
Income should primarily come from actual product sales, not from signing up new members. When people get incentives to recruit instead of sell, the model starts to look more like a pyramid scheme.
Is the intent to sell a product and not merely to recruit? 🛍️
Recruitment should support product distribution, not replace it. If the company’s main activity is signing people up, not moving products, think twice.
Is there a clear correlation between sales and compensation? 📈
In a legitimate setup, your earnings should be directly linked to product sales, not to how many people you recruit or how fast your team grows.
If recruitment were to stop today, will participants still earn money? 🔎
A strong test: if the company can still function and pay commissions without any new sign-ups, then it’s built on real product value, not recruitment alone.
Is there a reasonable product return policy? 🔄
Trustworthy companies offer a fair return or refund policy. This not only protects customers but also shows the company stands by the quality of its product.
Do products have fair market value? 💡
The product should be something people would genuinely want to buy, even outside the business opportunity. If it’s overpriced or unnecessary, be cautious.
Is there a compelling reason to buy? ✅
This ties everything together. Products must fulfill a real need or desire. If not, why would anyone buy them, let alone sell them?
The Verdict: What Your Answers Mean ⚖️
If your answer to all eight questions is YES, then you’re likely dealing with a legitimate direct selling company.
But if one or more are a NO, there’s a strong chance it’s a pyramid scheme masquerading as a business opportunity.
Final Thoughts: Direct Selling the Right Way 💼
Direct selling can be a flexible and empowering way to earn income, especially for those looking for side gigs or entrepreneurial paths. But it’s not without risks.
The 8-Point Test gives you a simple but powerful tool to stay safe and informed. Before you sign up, invest, or invite others to join, take the test and make sure you’re building something real.
📍 For more information, visit www.wfdsa.org or www.dsap.ph.