Know more about Direct Selling
WHAT IS DIRECT SELLING?
For years, many people in Hong Kong have come to appreciate direct selling as a convenient way to shop. Unlike other modes of direct marketing such as telemarketing and direct mail, direct sales representatives take their products directly to consumers' homes or workplaces where they give demonstrations and answer questions for individual consumers or groups of prospective customers. The hallmark of direct selling is customer satisfaction with personal attention and service.
To tens of thousands of people in Hong Kong, direct selling is also a business opportunity offering them income opportunities, flexible hours and independence. If you are asked to become a sales representative, what information do you need to know before you sign up?
Whether you are a consumer who wants to buy direct, or an entrepreneur who wants to have your own direct sales business, this website will help you protect your interest.
REMEMBER:
IF IT’S WORTH YOUR MONEY, IT’S WORTH YOUR TIME … TO INVESTIGATE.
AS A CONSUMER, DIRECT SELLING PROVIDES YOU WITH:
Personal attention and service
Convenient purchase
Informative demonstrations
Quality products
Useful information about products
Customer protection and satisfaction
Reliable buying sources
HOW TO BUY DIRECT SMARTLY
You should always use common sense and sound judgement before making any purchase and when purchasing from a direct sales person. The Hong Kong Direct Selling Association (HKDSA) suggests you follow these tips:
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Salespeople should tell you frankly their name, the company name, address, telephone number and the products and services that they are offering. Ask for proper identification.
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If you purchase from a direct sales person representing a HKDSA member company, you have the added benefit of consumer protection under the Association's Code of Conduct. Ask about the company's moneyback guarantees and warranties, refunds and exchanges, what they cover and how long they last. These terms must be consistent with those of the supplier of the product sold.
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Ask about the right of cancellation. All member companies of the HKDSA offer a minimum of 7-day cooling off period from the date of purchase. During this period, customers have absolute right of cancellation of purchase.
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Ask questions about the product, how it works, what it does, what it doesn't, how to get repair and after-sales service. See whether the product claims are realistic or overly exaggerated.
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If there is a contract, it must clearly specify a description of the goods and quantity purchased, the price and terms of payment, any additional charges, the name and address of the salesperson and the company he represents. Carefully review the contract and fill in every blank before you sign. Get a copy of any contract you sign.
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If you are not satisfied, the first contact is the salesperson. If the salesperson cannot resolve your problem, contact the company directly. If the company with which you are experiencing difficulties is a member of the Hong Kong Direct Selling Association, you can contact the Chairman of the Association's Ethics Committee by writing to:
The Direct Selling Association of Hong Kong Ltd.
P.O. Box 20701, Hennessy Road Post Office, Hong Kong.
HOW TO INVESTIGATE A BUSINESS OPPORTUNITY
If you are asked to sign up with a direct selling company to become its sales representative, you should find out whether it is a legitimate business operation. Think of the followings:
When you started your business, were you asked to make a huge investment?
Most reliable direct selling companies require participants to invest a small amount of start-up investment (mainly to offset the cost of start-up materials or a small number of products), and will not force participants to subscribe to a large number of stocks. Many pyramid scheme companies will falsely claim that the participation fee includes various training fees, computer service fees, purchases of large quantities of inventory, etc. You must be vigilant and careful not to be deceived.
Is the sales plan based on the retail business?
A solid and reliable sales plan must be based on retail activities that promote various popular and high-quality products to customers; and this also requires direct selling companies to provide high-quality products to support. You can't get paid immediately just for referring new people, your compensation should be composed of a percentage of the entire organization's turnover and personal retail profits.
Will the company buy back unsold inventory?
A reliable direct selling company will usually buy back unsold inventory from direct sellers that are still available for sale in the market, and will refund at least 90% of the purchase price after deducting the bonuses paid to direct sellers.
WARNING SIGNS OF FRAUD
These are only warning signs of the most obvious frauds. An independent analysis is necessary in any case. Verify claims in the company's official documents. Get written copies of all available company literature.
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Pressure to sign a contract quickly;
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Promises of extraordinarily high or guaranteed profits;
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Claims that profits can be achieved easily;
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A required initial fee which greatly exceeds the fair market value of any products, kits or training;
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Evasive answers by the salesperson or unwillingness to disclose company history.
ASK QUESTIONS
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About the company, where it is incorporated, its owners and officers, their background and prior business experience.
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About the products - their features, usages, source of supply, any performance claims and guarantees, the company's repair and replacement policies and procedures for handling complaints from you or your customers.
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About the start up fee (including required purchases).
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About the company's guaranteed buy-back of any required purchases.
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About the average earnings of active distributors.