Front loading
Front loading or inventory loading is the practice of buying a lot of stock so that customers can buy from you right away. Basically, sure, it's a good idea to have stuff in stock, and customers do love being able to get what they want immediately.
However. Front loading sails very close to the “Pyramid Scheme” wind in Direct Marketing (DM) and Multi-Level Marketing (MLM) businesses, especially as distributor orders are usually linked to bonuses, rewards, progression to higher levels, and earning commissions. Distributors often place orders for stock just to qualify for something, not because there's a demand for their products, or that they've sold a lot.
This is what we're told to do, in the private Crown Princess and other royal groups for distributors ...
And this is what the official SeneGence Distributor Policies and Procedures Guide (2017) states (covering their legal butts by stating that progression within SeneGence doesn't depend on stockpiling, even though it does):
Front loading is, of course, of great benefit to the company, and uplines. It means THEY earn big commissions and get big sales. Not so great for the downlines, though. So it's a win-win-lose sort of deal, where the distributors lose out, purchasing too much stock, getting into debt, and often ending up selling stock at a heavy discount just to get it out of their house.
The Federal Trade Commission (USA) rules that front loading is inappropriate activity:
Front-loading or inventorying of product in which excessive product purchases are viewed as prohibited consideration for the requirement that individuals make an initial investment of product purchased to engage in the opportunity.
Kevin Thomson, an MLM attorney, writes:
The courts add another layer to this definition that muck it up a little: inventory loading can occur when distributors are purchasing a minimum amount of product in an effort to qualify for bonuses. FTC vs. Omnitrition
Here are just a few articles you can read about front loading in MLM:
• MLM Basics: What is Inventory Loading?
I particularly love this quote from the above article (my emphasis added):
Modern MLM sales people don't really stock products in their garage or storage, but instead, just take orders and the items are drop-shipped straight from the company's fulfillment center.
SeneGence, still stuck in the dark ages ...
• MLM Basics: Inventory Loading and Front Loading
• Where Have All the Products Gone?
• What is Front Loading or Inventory loading?
SeneGence founder, Joni Rogers, used to work for Mary Kay, and seems to have copied a great deal of the Mary Kay business model (their annual conventions are also called Seminar, just for starters!)
• The Mary Kay New Year, New Recruit Frontloading Wipeout
• Front loading: How Mary Kay Predators Rope their Prey into Large Inventories and Bigger Debt
#frontloading #inventory #SeneGence #LipSense #MLM #debunked