Koscot test

Since it a strict demarcation between illegal pyramid schemes and legitimate forms of distribution of multi-level marketing, or network marketing needs, they prefer to approach their distinctions like the so-called Koscot test. This test was first used by the U.S. Federal Trade Commission’s and was intended for use for which the participants will receive a financial payment in return. This includes the Koscot test two conditions, and only if both conditions are met, is it a legitimate form of distribution and not an unlawful pyramid scheme.

These conditions are defined as follows: The participants in the system receive as consideration of his payment to the company the right to sell their products. He receives in return for its payment, the law on the recruitment of new participants in the system. These services are not related to the direct sale of products to consumers.

The exclusive meeting the second condition of Koscot test is regarded as evidence of a pyramid scheme, because it points to the fraudulent attempt to recruit people who have to make the payments to be able to fully expect without consideration, although beginners might be the beginning of the pyramid scheme in enjoy coming to get one, or other payment. "How obvious is the presence of this second part, recruitment for rewards with no connection to product sales, nothing more than an elaborate chain letter system in which for individuals who pay an expensive consideration in the expectation that they will recover the investment made in recruiting , the disappointment is predetermined.

We turn here to the Koscot test and note that the operation of a pyramid scheme is fraudulent and collided with several laws. "(United States v. Armantrout, 411 F.2d 60, 61-62), so is the statement of the United States, a legal process which has been waged against an illegal system. The term dealer kit comes from the multi-level marketing in which a company recruits independent sales partners for itself, selling its products to the consumer.

Another object of this distributor and an important part of the distribution policy is that these self-employed partners attract both new distribution partners, which in turn have the same tasks -- first, build the distribution system so it can grow, and , of course, sell products to consumers. Because, of course, it will be the appearance of the business that professionally and consistently, takes care of the company for advertising materials, product samples, lists, contracts and so on, which will support the successful work of the partners.
These materials are then taken in a kit, that is packaged together and then offered to the newly entered distributors to allow them a promising start in their sales activities. For buying this also Business Kit, Success Kit, Welcome Kit, Starter Kit, or similar to the above material, are usually charged fees of between 35 - and 100 - €. These fees can also be understood as an entry payments, purchase by the new distribution partners' right to establish, with the name of their company's professional existence.

Normally, these kits contain, depending on the industry and products, product literature, manuals, promotional gifts, sales aids, such as photos, product samples, videos and audio tapes, of course, price lists, order forms, candidate statements for newly hired sales people and so on.

Visit www.instantprofits.co.uk for additional tips on marketing.Today, as it is more common to build a successful sales organization with an Internet presence, there may therefore be digital advertising tools such as banners and pop-ups, link lists and so on included in the kit.

With the acquisition of the dealership kits the new sales people thus have the possibility of selling from his home and their marketing will increase strongly. The multilevel marketing industry is currently operating in an atmosphere of extreme regulatory scrutiny. The Omnitrition decision makes doing business even more challenging. However, by paying attention to the lessons contained in the decision, companies can chart a course that will allow them to operate legitimately and profitably.