The one rule that matters
Regulators in almost every market ask one question first: does money come from selling a product or service to real customers, or from recruiting? A plan where most income flows from enrollment fees, mandatory starter kits or internal purchases by distributors is a pyramid in substance, whatever it is called on paper.
Design the plan so that every bonus is funded by commissionable volume from product sales. Enrollment fees should cover a kit or software access at cost, and should never be commissionable.
Retail customers
Many jurisdictions (the US FTC, India's Direct Selling Rules, the UK Trading Schemes Regulations) expect a meaningful share of sales to reach customers who are not distributors. Build customer-only accounts into the plan, count retail volume toward qualification, and report the retail percentage on the dashboard.
DIRSL tracks customer vs distributor volume separately and exposes the ratio in analytics so you can prove it.
Avoid inventory loading
Rank qualification based on large personal purchases pushes distributors to buy stock they cannot sell. Set personal-volume requirements at realistic monthly consumption, offer a buy-back policy (90 percent for 12 months is a common standard), and cap how much personal volume counts toward rank.
Income disclosures
Publish an income disclosure statement showing the distribution of actual earnings, including the median, and the percentage of participants who earned nothing. Show it before enrollment and link it from every earnings claim. DIRSL generates this statement from real payout data and versions it.
Gated structures
Investment or ROI plans (fixed returns on packages), gifting plans and plans with no product are illegal in most markets and are gated on DIRSL. If your model is a licensed financial product, our compliance team reviews the licence and configures the plan with the required controls.
Checklist
Before launch, confirm each item below. Your counsel owns legality in each market; this list is where they usually start.
- All bonuses funded by product/service volume
- Enrollment fee non-commissionable and at cost
- Customer accounts and retail volume tracked
- Realistic personal-volume thresholds
- Buy-back and refund policy published
- Income disclosure generated from real data
- Cooling-off period honoured in the enrollment flow
- Region restrictions configured
- Earnings-claim guidelines in the member portal