The following best practices are required by Operation Promised Land (“OPL”) before OPL will recommend a potential marketing opportunity to its members:
- High Quality Products or Services Offered at a Fair Price – OPL requires that the manufacturer or servicer provider offers a high quality product or service demanded by consumers that is competitively priced. In many cases the product or service will be proprietary to the manufacturer or provider and is only available through its sales force and not available at retail outlets.
- Inventory Requirements – OPL requires that the manufacturer or service provider does not require you to purchase an excessive amount of initial inventory.
- Auto-Ship Can not be a Requirement – OPL requires that the manufacturer or service provider not require “auto-ship” whereby products or services are shipped to you automatically on a regularly basis without regard to your sales of existing inventory to prevent the accumulation of an excessive amount of unsold inventory. You should be able to order products or services on an as-need basis only. If “Auto-Ship” is an option, the manufacturer or service provider must have an appropriate opt out procedure tied to a Buy-Back requirement in accordance with 4 below.
- Buy-Back Policy – OPL requires that the manufacturer or service provider agree to buyback any unsold inventory provided the product or service has not been opened or used and any usable sales kits or demonstration materials.
- Sales Kits and Demonstration Materials – OPL insists that the manufacturer sell only a reasonable amount of initial sales kits or demonstration materials at the manufacturer’s cost and not be a profit center for the manufacturer. The company must also agree to repurchase these items on reasonable commercial terms.
- Commissions on Product Sales Only – OPL requires that sales commissions be paid only on product sales to the end-user and no commissions paid on initial distributor fees for acquiring other members, sales kits or demonstration materials.
- Active Participation by Distributors – OPL requires that the manufacturer or service provider requires that distributors perform bona fide supervisory, distribution, selling or marketing functions in selling the product to the ultimate consumer.
- Training – OPL requires that the manufacturer or service provider provide reasonable training to assist the distributor in product or service sales and support of the distributor’s sales organization.
- Multi-Level and Binary Sales Organization – OPL requires that a distributor’s sales organization Compensation Plan be in compliance with all federal and state laws and regulations.
- Retail Sales – OPL must be satisfied that a substantial amount of product sales are to ultimate consumers who are not otherwise distributors of the manufacturer or service provider and by internal consumption.
- Earnings Claims – OPL requires that all earnings claims made by a manufacturer must be based on the actual earnings of distributors and not based on hypotheticals.
- Terms of Sale – OPL requires that a company comply fully and timely with the terms of the purchase agreement including fees and charges as well as warranties and guarantees. There should be no termination without cause and automatic renewal absent a material default. You should have a right to sell your business to a qualified purchaser.
- DSA Code of Ethics – OPL requires that a manufacturer or service provider be a member of, and/or comply with the Direct Selling Association’s Code of Ethics.
