Selling multi-tiered or multi level marketing, full description and an analysis of the market.

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meeting-business-MLM

Sale multilevel or mlm, that employs him, relationship marketing, marketing multi-level sales network by cooptation, co-opted network (V.R.C.) sales, network marketing, etc., in English multi level marketing or MLM, is a structure of the sales network in which resellers (or distributors) may sponsor new vendors, and be so partly paid by a commission assessed as a percentage on sales of recruits. Sale multilevel eliminates the costs of recruitment and training, but also advertising expenses by substituting the word-of-mouth.

The multilevel sale itself was invented in the United States in 1940 and popularized in the 1950s by the Tupperware company. The multi level marketing (MLM) is present in almost all countries.

Sommaire

In france, it is legal

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The law allows sales networks by recruiting in string of members or affiliates (not to be confused with the pyramid) 1, under certain conditions.

Thus, a legal network shall comply with the following constraints:

  • "godchildren" commissions are levied by a number restricted and fixed hierarchical levels, so that there be no hope financial gains resulting from an unlimited increase in the number of persons recruited or enrolled.
  • no benefit shall be conducted during recruitment, even in a roundabout way (training, non reprenable initial stock).
  • Commissions are subordinate to the sale of a quantity of products or services, either to the acquisition of new customers.
  • Stocks must be recoverable

https://www.legifrance.gouv.fr/

The federation of direct selling (FVD) organizes and federates the multi-level sales. Members are the companies at the first level, but it also assists sellers.

Vendors may obtain a status of vendor independent home or an independent status and since 2009 opt for auto-entrepreneur status.

Where the activity is occasional and within the limits of a certain income ceiling, they may have the status of employee social contributions are paid by the parent company. The seller then depends on the general social security scheme. Vendor activity can be considered as falling within the micro-enterprise when he has independent status and that the turnover is less than the tax ceiling.

The seller shall issue a purchase order with its coordinates and its supplier; It must meet the deadline of seven days of its customers. The status of independent home (VDI) seller is status of salaried clerks and society is responsible for his actions in trade when it represents; This status is not suitable for vendors having a product or service to high commission (as in real estate, for example) due to the lower turnover still limit for auto-entrepreneur status.

Direct selling is often presented as an alternative or a plan B financial that may remain at the stage of revenues supplementing the purposes of months, or can become a viable career plan.

What the law says

Code of consumption «art.» L.122 – 6 – shall be prohibited:
"The sales process said the snowball or all other similar methods of in particular to offer goods to the public in him doing hope obtaining such goods free of charge or against surrender of a sum less than their real value and in making sales to the placement of vouchers or tickets to third parties or to the collection of memberships or registrations."

It is forbidden in a MLM pay money for the recruitment of new members. It is important to understand that in a mlm pay must be given "only" for the sale of products and services. Any premium non-contractual, not specified in your plan of remuneration received for the entry of a new Member in the Organization, is potentially illegal. Any premium received for the purchase of product by the representative itself, can be considered a "hidden discount", and can bring the taxing authority as straighten you fiscally. Any premium charged to other title that the sale of products to final customers, it means to others that your downline or members in the system, group or individual can be considered to be hidden and non-contractual remuneration and therefore subject to social security contributions. And in the latter case, it is essential to understand that adjustments can be extremely devastating for your business, for your finances.

Generally, the act very strictly framed system "bonuses", which must remain "exceptional". If the uniqueness becomes routine, it is potentially illegal, because non-contractual. What's serious here, it's the MLM business that will make you directly or indirectly to do so not in is never liable for, as your independent status, it is your sole responsibility to comply with the law. It is up to you to know if what you're doing is legal or not, and not the company to interfere in your management to ensure. It is even more perverse that the company has a blatant interest, and that it has an obligation to provide information on the subject. But these information are often very diffuse, buried in lengthy contracts written in small print that most people don't read ever, and in legal language that you will have the greatest difficulty to understand.

regarding the purchase of stocks

Some MLM do you buy large quantities of products so you do the resale. But it is very likely that you will not succeed to sell all products. Therefore in this case the MLM subject reimburses you unsold products.

Act No. 95-96 of 1 February 1995, J.O. February 2:

"In addition, it is prohibited, in these same networks, to obtain a member or affiliated the acquisition of a stock of goods intended for resale without guarantees of recovery of the stock to the conditions of purchase, possibly of a net sum not exceeding 10. p 100 of the corresponding price. However, this guarantee of recovery may be limited to a period of one year after purchase. »

Within a period of 12 months from your product order, and if the product is in good condition for resale, you can return all or part of the purchased products through their refund up to 90% of sums paid. MLM cannot oppose under penalty of heavy sentences, or even an outright ban. The threat of a complaint is usually enough to get satisfaction. The premiums are generally not contract with these companies, they cannot be justified by actual sales to final customers, and therefore cannot be deducted from your refund. A premium is supposed to reward you for your performance, not because you buy you even a lot of products. In this case, it is more of a "premium", but a gracious discount. And in no case it should be submitted otherwise, would be for accounting, social and fiscal reasons.

starter kits or the products

If a MLM offers to buy a Starter Kit, it is important to check if the purchase of this kit reports profits to the other members of the network. The Act allows the MLM offer a Starter Kit to participate in the system. If this kit contains products for sale, it must be evendue at cost price. If this package contains no products for sale, this kit should be given without charge. Membership fees are not expected to cover the price of said Kit, but the administrative costs of your membership system. The company for legal obligation to provide all or part, and without any financial compensation, the means of sale in order to complete the sale of its products – and especially in the case of exclusivity, franchise or distribution under duress. In other words, the training and personal development aid must be free, cannot be sold in any way whatsoever. In no case it must make a profit or you force them to fund its own POS (point-of-sale advertising).

Act No. 95-96 of 1 February 1995, J.O. February 2:

"In the case of sales networks consisting of recruitment in string of members or affiliates, it is forbidden for a member or affiliate network a sum corresponding to a right of entry or acquisition of materials or services to educational, training, demonstration or sale or any other material or similar service, when this payment led to a payment or the granting of an advantage benefiting one or more members or affiliates. of the network. »

In other words. Any tool for sale, PLV on products, training, websites, etc., must not be sold to the representatives, if this allows the company or representatives to make a profit. Number of promoters MLM do not hesitate to sell you individual training to help you supposedly to "perform" better. To avoid this condition, they do generally personally, with a different legal structure, although often, in violation of their own contract with the company. So check that their activity is well legal and authorized, and check that these courses are useful, you will actually bring an increase in your sales. Anything related to personal development has nothing to do with the sale of your products. And it should logically be the responsibility of the company to bring you free all these programs and information, because his goal is to sell products, and not to exploit your naivete. Force is found in the middle of the MLM, everything sells, even what should theoretically be free.

Law on competition «art.» 55. : Pyramid:

'Article 55 (1) (b) prohibits the CMPs in which a person must, to become a participant, provide compensation for a given quantity of a product. This provision also prohibits the CMPs in which participants must purchase products to receive a commission or higher profits. However, it allows the purchase of products at cost by a participant for promotional purposes. Therefore, a system could raise no problem under this provision if a new participant was required to purchase a "Starter Kit" (manual, instructions, product samples, promotional material) at cost plus handling and shipping expenses. the Commissioner will take into account the fact that a significant part of sales are made to individuals who do not participate in the system because the lack of such sales could indicate that there is indeed an obligation to buy and thus raise a problem with regard to the provision. The Commissioner is believes that an obligation to purchase may be contrary to the provision, which is not the case of an obligation to sell."

This provision provides that a multi-level marketing system is a 'pyramid scheme' illegal when participants receive remuneration for the recruitment of other participants, they must make some purchases to participate in the system, they must get unreasonable quantities of products or that they are not a guarantee of redemption on reasonable commercial terms. » .

Contrary to what is claimed by some proponents of the MLM, pyramid selling excluded nothing the issuance or non-products. In the case of the MADOFF case, it was clearly of 'products' financial investment. And in the case of the MLM recruitment or product, the sale of product exonerates nothing illegal pyramid shape. This deception is all too often used by these representatives of MLM to deceive your vigilance, a pure lie. It is also indicated that the "Starter Kit" may consist of equipment to aid in the sale, and therefore, may consist of demonstration products, they cannot be sold at cost price. At no time the acquisition of this Starter Kit is a "duty". In other words, you can totally adhere to the system without having to buy this kit, or demand repayment at any time. Similarly, any progress in the hierarchy of your compensation plan may be hampered by no other constraint than the sale of the products, and not vice versa. Far too often, and especially in the MLM recruitment, progression of your income can be done only by recruiting new people, not by significantly increasing the volume of your sales.

pyramid-scheme

Network marketing income

In different network marketing companies, there are generally two types of income.

  • commissions: the independent representative enjoys a margin;
  • residual income: is called residual income (or active or passive, yet income annuity income recurring or income non-operating) income that is paid on a recurring basis. It is calculated using personal turnover of the representative and that of his organization, according to the compensation plan of the MLM company with which the representative works.

The independent representative can also benefit, under certain conditions, premiums (to be encouraged).

 

The real problems of the MLM

Multi-level marketing suffers from a problem of image recognized due to the fact that it is often difficult to distinguish legitimate MLMs and illegal scams. MLM companies operate legally in the United States and in 50 States and more than 100 other countries, and new companies may use terms such as "affiliate marketing" or "home franchise business". However, many pyramids try to present themselves as legitimate MLM businesses.

The problem of scams

Marketing network, or MLM, knows success growing for a long time now, since one can speak of decades. Unfortunately, it also suffers from a bad image, related to the fact that many people confuse the system of network marketing with that of the Ponzi system, that is a scam. 'Real' network marketing has absolutely nothing to do with the Ponzi system, nor with a pyramid scheme. The problem is that some people have made Ponzi type scams in the past by disguising them as network marketing; There are still my see scams. To put an end to this mix, but also to ensure that you are well informed and can make things if you want to get started in network marketing activity, I will in this article explain you precisely what is a Ponzi scheme system, and how recognizing it compared to a multi-level marketing system, which is reliable and legal.

reminders on the ponzis:

This system is so named because its inventor, Charles Ponzi. This is a very old scam, since he used it for the first time in 1919.

The operation of this system is rather simple: it comes to convince people to invest, promising them generally an interesting ROI, then pay them, but with the money invested by the following clients! The big flaw of this system is that it can not hold in the long term. Assuming that person discovers the deceit before, system always ends up collapsing itself, since it happens always a moment where there is enough new customers to "Finance" the remuneration of the former.

What is the difference between the scam that is a Ponzi scheme and the MLM System?

In network marketing, there are two activities that are exercised in parallel: the sale of products and the recruitment of downline to build its network. There where some tend to make an amalgam with the Ponzi system, it is on the recruitment of new referrals. The Ponzi scheme is therefore nothing other than a real scam, an illegal scam.

In network marketing, commissions that you touch are calculated on the turnover of your downline, but payments are made directly by the company, and are in no way taken referrals earnings. It is this difference that makes the MLM an activity which is, on the one hand, fully legal, and on the other hand, totally reliable. Thus, each Member of a network will have to equal activity, exactly the same income.

For example:

  1. If the commissions you'll touch 'on' the turnover of your downline, correspond to amounts deducted directly on the earnings of these referrals. It a Ponzi system.
  2. Always beware of too enticing offers: the famous too good to be true is often… really too good to be true. If for example, we offer you to buy a revolutionary financial product that will bring you 20% without risk of interest per year, flee! If it is, it is a scam. In my section scams we have products that are 70-1800% annually. Generally, when you want to invest, do extensive research before, and do not hesitate to seek advice from financial experts etc.
  3. About network marketing, never enter into a system which will require you an initial investment! The company that sells lingerie at home and that for example asks you to buy a "starter kit", promising you a then guaranteed minimum remuneration, is also to flee like the plague. If there are products to sell, it is the company to provide you any samples. otherwise it must take back you the stock.

How to check scams:

To protect themselves from this type of scam, in France there is the Federation of direct selling. Go to the partner of the FVD pages to check companies. It exists since 1966 and was founded by large companies of direct sales at the time, to formalize this activity and crafts relating thereto. Any company marketing network (or direct sales) has the opportunity to become a member of this federation, and to do so, it must file his candidacy, which is accepted only after a thorough investigation conducted by professionals precisely to determine that no Ponzi or pyramid system not behind.

Attention however membership is not compulsory for example you can find companies that use mlm as crowdimo but are not members, but yet these companies are legal. If it comes to corporations in the field of finance for example, it is possible that they are not members of the FVD simply because it is not the sale of goods. This does not mean that it has illegal practices.

Some examples: cetelem, franfinance are members of the FVD.
Legal does not mean necessarily bargains. The weak points of the MLM.

Bad MLM techniques

How many times have you been approached by a neighbor, colleague, friend, or worse yet, a member of the family, who said "Let me give you an incredible opportunity" and you are then invited to a house or for lunch for "a debate". Another variant or "I have a friend who".

Most people immediately have this feeling that there is a wolf.

"Is it a multilevel marketing organization or a Ponzi scheme".

Maybe you know someone who, at one point to sold Amway, Herbalife, Mary Kay or other health supplements or cosmetics. Generally, they will tell you how much money they earned but not how much they spent and how they have been obliged to sign new "distributors" or make sales under penalty of losing their mandate.

The problem of the saturation of the market or how you will struggle to find customers

stop

The saturation of the market can be defined as the point where all the people who want the product at the price where it is sold already bought it. No product or service will meet 100% market penetration, since everyone does not necessarily the product, or is not able to pay (beautiful luxury car). The fact that multi-level marketing plan is based on a network still growing distributors, each of which can pay fees, buy products and / or recruit more "distributors" will eventually lead to the fact that not everyone can work because sellers are over-represented compared with the demand of the customers. If the company truly works in MLM, not franchises, so you often have to deal with this problem, it does parrait nothing but it is crucial.

How is determined the point of market saturation?

Now, if everyone could use a new product or service, everyone wouldn't. Some will be afraid to use something new. Others will be existing brand-loyal. Some will want to buy a product of inferior quality for cheaper or on the contrary customers may want a more expensive premium product for prestige.  It n so there will only be customer X.

The question for the future specialists of marketing is… who is 'X', and how this variable can be predicted to maximize profits? The fact that "X" is difficult to define does not mean it does not exist. The market wants that "X" is equivalent to a number of products at $100. What will you do with your additional stock sales in the past "X" and that nobody wants?

No one can perfectly predict 'X', and the situation isn't as simple as reporting, but the objective of marketing is to provide "X" and make sure to convert prospects into customers.

Let's look at an example:

The population of the United States is about 300 000 000, and say that you want to sell a new type of BRA; Obviously, women (and a few transvestites) will want to buy a.
300 million people, there are about 110 million people who are adult women. If you sell the BRA at $45 each, you can eliminate most of the women who are in CSP low-income; You now fall to 50 million potential customers. Then there is the style. Even with a very popular style may not appeal to everyone, so 50 million potential customers, probably half want enough to buy it. Therefore, we can reasonably say that the potential maximum size of our market for the designer of Rihanna arm will not more than 25 million women out of a total population of 300 million people in the United States. This represents about 1 / 10 of the population, even for something as popular as a bra.
Similarly, everyone does not wish to join a club, buying gold, use high range cosmetics, drinking filtered water, wear a particular style of footwear, or using any other product or service.

For example, if the company Apple, based on the experience of the last year, believes that they will sell 10 million phones next year, they plan to build and distribute accordingly. This means prepare factories, set up a distribution channel and a network of dealers, advertising and marketing campaigns and carefully manage inventories at each level so that Aplle will still have credibility with their distributors, retailers and the public the following year, having enough to meet the demand without being in excess.

If it turns out that there is a "run" on the products of Nespresso, and they achieve their goals of sell mid-year so they have miscalculated demand and he will miss the benefit they could have done easily. The most serious problem, however, comes by overestimating the point of saturation for the product. If these companies are 10 million products and sell 2 million, it may be the end of Nespresso / Apple etc as a society, because the surplus will have passed for a fraction of the original price.

The obvious point here is that the management of supply and demand, and it takes a good dose of insight to predict a realistic market penetration and know the saturation point is crucial for any company, for any product or service. Execution on this plan and the calculations and careful management of all aspects of manufacturing, distribution and advertising and marketing is essential to success. Simply said, a failure of supply and demand can ruin a company if the market is oversaturated.

What is the problem with MLM and the saturation of the market?

The lies

Everyone will want to buy this product!"

Who has an eye on 'X', the point of saturation of the market for price given in an MLM? Well, person and what is funny, or perhaps tragic is that the saturation point will be reached and even exceeded, without anyone noticing or take care.
Let's just to assume that it has been reached today in a MLM; the number of possible units sold at this price has been exceeded. Is – that someone cares? Since we assume that the number that allows the saturation of the market 'X' has been reached, everyone who wishes to become a client of the MLM it is now. But this is not what the speaker will say. It will tell you "now is the right time to join us, on to a super year, imagine next l´annee." But all this is a lie, even if the speaker does not know. The total available market "X" has been reached and nobody notices. All distributors will lose from now on. Could this be you? How can you possibly know how you'll become a liar in an MLM

Example

Imagine McDonald's suddenly convinced soi "since everyone needs to eat', we open four McDonald franchises on each of the four corners of an intersection in your neighborhood. In a few months, the four points meurts to a slow death. The franchises there would think twice before doing business in this way. This is why in the real world Concessions and franchises are contractually protected by defined territory and / or market, and only allow not too many distributors in a given area.
Again, the simple fact is that even the most successful products will have a partial market penetration. This is also true for services.
Then why the MLM promoters hide this?
Where is the stop in an MLM if enough sales people are hired? In a normal business of a Manager said: "we have enough, stop hiring people.". But in an MLM, there is no way to do so. There's never enough or too many "distributors" or sellers. Out of control by its design, its gears will grind the money, time, credibility and the entrepreneurial energy of well-intentioned people who joined simply to supplement their income.

The lead becomes too hard:

Due to the saturation of the market and competition, the lead becomes hard and costs increase, as Word-of-mouth is too long and it is difficult to sell, rare are the people arriving in MLM.

Other low points:

  • The products offered are often unmarketable products (or hardly). You can make a few sales, but from there to implement a system that pays you a regular profit, it is all another story!
  • Must pay the "starter Packs", or this kind of thing with another name who wants to say basically "If you want to start, should pay the right to enter"! For some MLM, its runs squarely at the subscription or the Ponzi scheme. Need to pay every month a small amount to stay in the circuit and continue to hit profits from its godsons, for example. If you do not pay, you are no longer seen as 'active' and strangely your self-help group more as much help you. It will make even you resume a small Pack.
  • It is a vicious circle. People who are in this system will never tell you "it is scam, do not go!", because they would then lose an opportunity to recruit you and therefore resume their investment. Remember, the goal is to recruit and sell as possible!
  • Many sales or recruitment methods are obsolete, and this is the error. You have tools, sometimes even a website with your Member nickname, but the site does not pro (nothing that from a Visual point of view, it seems that the date of 10 years ago!).
  • Level compensation, this is not it. The commissions are rather low and in light of the tremendous work that awaits you, it's very little paid.
  • It is above all a commercial business, we need to go quickly

The strengths of the MLM and benefits

What distinguishes the MLM from most other trade it is that by creating your networks you power this enormous fire.

  • Be able to engage in the sale without too much risk. Products already exist, you will only have to promote a. No cost of production or complex sales process. You are just Distributor.
  • You are generally not single. You join a community of other sellers like you and who will give you some tips to help you and start you. They have every interest in help if they want to be paid them also (explanation on the following point).
  • You have the possibility to sponsor other persons, on several levels. You recruit other sellers in your team and you will earn a share of their sales. Practical when the number begins to grow.
  • You have tools to promote your products, as well as explanations on the different way to sell. The team that has hired you will also make you benefit from their experience, and they are fairly well organized (from what I could see when I tested this method).
  • The pay is often capped.

success

Sellers who already have experience in MLM are often a big plodders or /et have a book in gold. These are often self-employed with advantages and disadvantages. They are used to provide a large work for little results, and are therefore hard to get by. Imagine now if you have a business, and that you call a friend who is in MLM. You propose not not crumbs, but profit sufficiently interesting to him, if he do the sale of your product… You see where I'm headed?

Doing the same job it does in normal times (networking, promoting etc) he will win perhaps 10 times more and you, you'll have a seller who knows perfectly the strings from the sale. Everyone finds his account, and it is for this reason that a product offered in affiliation is far more cost-effective than a system that sells little-known products and low commission rates.

The commonly used articles.

The home sales (APE 47.99 code A), employs large numbers of sellers. Member of the Federation of direct selling companies (information for the articles come from the site) accounted for only 300,000 people.

The profession of home seller fits into two large existing social categories:

Employees, persons bound by a contract of employment with the company

  • non-statutory representatives
  • statutory representatives (VRP)

The independent, people bound by a distribution agreement with the company

Independent direct sellers

  • VDI agent
  • VDI buyers/resellers

Enrolled in a professional register

  • commercial agents registered in the register of commercial agents (me)
  • traders registered with the trade register

The direct selling, it is also articles varied and suitable for all sellers, whether they are employed or self-employed.

If the direct sellers are employed, they have a contract of employment. Wages are calculated based on the commissions charged on sales that include professional fees. Social security coverage is that of an employee.
The sales force is made up of exclusive vendors having contracts of V.R.P. or non-statutory representatives. They operate part time or full time, these sellers are trained professionals.
If the direct sellers are independent, they have a distribution agreement with the company. Activity may be exercised on regular or permanent basis by individuals with a professional registry (registry Special des Agents commercial or trade register and companies) or on a casual basis with the status of the seller at home independent (VDI) buyer-reseller or agent.

Three statuses exist: independent home (VDI), Agent Commercial seller, shopping

 The VRP

A company selling at home, wishing to work with commercial employed full-time and part-time, can opt for: 

  •  a vendor representative usher (VRP) contract. The VRP is said "exclusive" when working for one employer and "multi-card" when he worked for at least two employers.
  • a representative of non-statutory trade agreement.

The employee home seller therefore has a relationship of legal subordination with the company for which he works as it is employed.

Subordination is characterised by the possibility for the employer to impose on its vendor various constraints such as e.g. constraints of location, schedules, compliance with an organization, records daily, minimum sales. The employer controls the execution of these obligations and may punish breaches of his subordinate.
Subject to specific provisions specific to the statutory or non-statutory representatives resulting from the Act and, where appropriate, of the applicable collective agreement, employees home sellers have the same rights and obligations as any other employee. 
For social protection, they are attached to the general system of social security. Social contributions are paid by the company to the URSSAF for non-statutory representatives and 'proprietary' VRP and the CCVRP for "multi-card" VRP.
The VRP "multi-card", or "exclusive" has the legal quality of employee and serves a special status provided for in articles L. 751 et seq. of the Labour Code.

The legal conditions that allow access to the status of VRP

To be statutory VRP, it must meet four conditions is:

  1. Practise as trade representative, i.e. prospecting customers, outside the premises of the company, to take orders of purchase on behalf of the company.
  2. Profession on exclusive and constant. The concept of exclusive exercise implies that the VRP exercises, whether for a single (exclusive VRP) or several employers (multi-card VRP), only a professional sales representative, excluding any other business activity. However, this notion is not incompatible with the exercise, strictly ancillary to an activity (control and animation of networks, technical customer support, delivery, receipt…) conducted on behalf of the same employer. When the activity of VRP is only incidental or occasional, status is not applicable.
  3. The statutory VRP must not engage in business operations for its own account. This implies that the VRP occurs for the account of his employers or and can at the same time deploy an independent activity, whatever it is. What follows is for example only made for a representative to be at the same time registered in the trade register and companies or in the Special Register of commercial Agents is inconsistent with the VRP status. It can not be both VRP for a company and VDI for another.
  4. The VRP must relate to his employer by a contract involving commitments determined for:
  • The nature of the products or services for which the VRP performs representation,
  • The geographical area or the category of customers that the VRP is to visit and therefore the delimitation of a sector, regardless of whether exclusive or not.
  • The terms of compensation which, in whole or in part, are directly linked to the turnover achieved by the VRP.
If all conditions are met, articles L.751 and following of the Labour Code apply ipso jure. Otherwise, you are then in the presence of a representative of non-statutory common law.
Often called attached commercial, they belong to the category of representatives non-statutory, all those who are holders of a contract of employment of representative without status VRP, i.e. for which lack one of the mandatory criteria for this status. The contract of employment is governed by the Labour Code and the Collective agreement applied in the company.

Features resulting from the law:

The legal status provides a number of provisions which apply ipso jure to the VRP and to which the contract of employment cannot derogate.

Beyond the legal status, the collective statutory VRP (agreement National Interprofessionnel, October 3, 1975, called ANI) will also apply if the statutory VRP selling at home is required by his employer to effectively and regularly report on its activity. ANI provides additional rights for the benefit of the VRP, to which the contract may not derogate.
Note: The Convention Collective des VRP clarifies that the reference to a any work schedule is an unsuitable criterion to the profession of sales representative.

Trial period for an indefinite contract 

If a trial period is stipulated in the contract of indeterminate duration, it may not be more than three months.

 

Remuneration

The remuneration of the VRP is, by nature, linked to the turnover which it carries out. The contract may provide that compensation shall be formed exclusively of commissions based on the realized turnover or will include, in part, a fixed. The remuneration must be paid at least once every three months (with monthly instalment if ANI is applicable).
Attention: the ANI provides that under certain conditions the VRP must be assigned a fixed minimum remuneration.

Back on sample boards

In the event of breach of contract, the VRP may be entitled, under certain conditions, to a "return on sampling commission" corresponding to the orders or commands coming after his departure and which are the direct result of his personal activity of exploration before the termination of the contract.

Periods of notice for an indefinite contract 

Breach of the contract at the initiative of the VRP or the employer, the period of reciprocal notice, except in cases of force majeure or gross negligence, be at least one month during the first year, two months in the second year and beyond three months.

Customer compensation

The VRP can have right to compensation in the amount of customers, if failure occurs due to the employer or if it is caused by illness or accident, insofar as the goods or services that he was responsible for selling were renewable and that failure is not a serious fault of the VRP.
The customer compensation is due only if the representative justifies having made or developed a clientele which he would be deprived for the future by virtue of the breach of contract.
The amount of the customer which may be due to the VRP can be evaluated in advance or contractually. It must therefore be determined at the time of the breach and must correspond to the injury suffered by the VRP of because of the loss, for the future, for the benefit of the customer.
The VRP is thus not entitled to compensation in the amount of customer:
  • When the contribution of customer does not imply a renewal of control or stability of relations: Accordingly, in particular to the sale of equipment to individuals, there be no right to compensation of customer,
  • the VRP can continue to explore the same clientele after termination of his contract,
  • in the event of fault serious.
This allowance will stack with other allowances as the compensatory allowance for prior notice, the compensation of non-compete compensation of precariousness in the event of contract… but not with breaking pay provided in the ANI.

Social security contributions

Statutory VRP benefit from the 30% deduction for business expenses on the base for the calculation of social security contributions in the limit of an annual ceiling of 7600 euros per year and per employer.

Features resulting from the ANI

The fixed minimum remuneration (article 5-1 ANI, applicable only for a VRP working for a member company of the Federation of the direct sale):

It is applicable when the VRP is hired on an exclusive basis by a single employer, operates full-time and is required by his employer to effectively and regularly report on its activity.
The minimum compensation lump sum, calculated quarterly and deduction of business expenses, may be less to:
  • 390 times the hourly rate of the minimum wage for the first quarter of activity. This minimum is reduced to 80 times or 220 times the hourly SMIC rate if the contract is broken after a month or two months during the first quarter.
  • 520 times the hourly rate of the minimum wage from the second quarter of employment.
When the remuneration established on the basis of the carried out quarterly turnover does not reach this threshold, the employer is required to pay a supplement to above, amount credited to the remuneration due during the following 3 quarters and which can be deducted only if these earnings exceed the minimum wage.

Clause of non-competition

If the employment contract contains a clause of non-compete, it must be expressly limited:
  • time: maximum 2 years,.
  • in space: geographical area large enough to prohibit the exercise of his profession, to the employee
  • relative to its object (competition against the company or its products).
In consideration of this clause of not competition, the employer owes to the VRP a compensatory indemnity, attention so that there is actually a compensatory indemnity with a real and non-symbolic value, if not the clause may be null.
 Excerpt:
  1. The financial contribution is a salary and not for damages.
  2. This wage contribution must take account of the difficulties that you will have to find a job in accordance with the clause in the professional sector and the geographical basin which is yours; It cannot, for example be progressive depending on your seniority. This is really an estimate of your difficulties to find new jobs in the local labour market. Currently that pay consideration lies between 30% and 50% of your final salary.  the labour court may revalue the oppression on justification of objective difficulties.
  3. The amounts paid are subject to social security contributions calculated on the basis of gross salary.
  4. the action for payment within 3 years.
  5. This 'pay' should be increased by 10% in respect of the vacation package.

Compensation for breach of contract

ANI provides that at the termination of the contract, specific allowances will be due which will override, as appropriate, to the legal indemnity of customer.
It is either breaking conventional allowance for the special break, or finally the special retirement allowance.
The allocation of one or the other depends on conditions of the termination of the contract and the amount of the seniority of the VRP.
They are not cumulative with the allowance of clientele. Only the most favourable to the VRP will be due by the employer.
In the event of renunciation to the customer compensation, the VRP leaving retirement may benefit from special retirement allowance.

Social protection

ANI provides that the VRP from two years of seniority will receive additional compensation, in addition to those paid by social security, sickness, accident, accident at work or maternity.

The contract of the non-statutory representative

The employer shall remit to his employee a written work contract determining the essential terms of the collaboration, including: the scope of the mission, the work schedule, the prospective workplace, compensation, the applicable Collective Agreement and, if there is one, the trial period.

Income

  • Remuneration, regardless of its form (fixed and/or commissions on sales) is determined in the conditions of ordinary law.
  • Vacation rules are also applicable, an employee who is entitled to five weeks of leave after one year of presence.
  • The allowance of vacation leave is in principle calculated on the tenth of twelve months of reference from the period of vacation pay. Provided that they mention this expressly in the contract, it is possible for the employer to stipulate compensation "included paid leave".

Specific provisions of the collective agreements

Many of the labour law rules may be supplemented, improved or specified (sometimes degraded, if if I swear) by provisions of a Collective Agreement. . The rules of the Collective Agreement are mandatory for the company if it is "extended", i.e. If a decree determined that it would apply to all companies of its sector of activity, or if the company is a member of a trade union employer signatory to a Collective Agreement.

Social security contributions

Social security contributions for common law rules apply as for an employee. Non-statutory representatives do not contribute specific from the Pension Fund of the VRP but caisses of the general regime, they are entitled to unemployment insurance.
Note: for social security and to the extent where vendor employee (whether statutory or not) does not exceed a certain amount of income, social security contributions collected by the URSSAF will be calculated on the basis of a lighter schedule provided for by the Ministerial Decree of 31 May 2001 (note that this schedule is not applicable to multi-card VRP)

Vendor independent home (VDI)

The status of VDI, very commonly used, is suitable when vendor begins or wishes to retain an occasional activity. It is a status of independent but with specific amenities which essentially aim to release the seller from the usual constraints of entrepreneurship while enjoying social, fiscal and legal arrangements clear and securing.
Its activity develops, the VDI whose revenues exceed a certain threshold (see below), must register for a professional register to become either Agent Commercial, or shopping. Of course, it will continue to collaborate with the companies for which he was previously seller under statute VDI.

Legal definition of activity

The seller at home independent (VDI) and its field of activity are defined by articles L.135 – 1 et seq. of the Commercial Code.
Learn more: download articles L.135 – 1 et seq. of the Commercial Code.
The main role of the VDI is to distribute, i.e. to enter into contracts of sale or provision of services with a particular, end-user, products and/or services of the company with which it has concluded a written contract distribution.
By statute the field of activity of the VDI corresponds to the scope of articles L.121 – 21 and L.121 – 22 of the Code of the home sale-related consumption.
Learn more: download articles L.121 – 21 and L.121 – 22 of the Code of consumption
The visit and the conclusion of the contract take place at the client's home, at his place of work or in all places not intended for the marketing of goods or services.
Are thus excluded from this status:
  • persons conducting sales remotely (phone, Internet,…), for which the distance selling regulations is applicable,
  • persons conducting sales in markets, fairs or stores, places intended for normal marketing of goods and/or services,
  • people who distribute financial products, insurance products, healthy contracts on buildings, or any other property or service for which the solicitation is prohibited or regulated.
According to the policy of the company, and when the agreement, the VDI may also be required to perform services for the benefit of the company by sponsoring other VDI with it and running a team of other VDI.

The essential features of the status of VDI

From a tax and legal point of view the VDI is an independent. It has no geographic or customer specific prospect (subject to statutory sell to individuals condition), not to achieve sales quotas remain entirely free to devote the time he wishes in sales activity and can work at the same time for several direct selling companies (subject possible not working for companies direct competitors). There no relationship of subordination with the company and neither the Labour Code nor the collective agreements are applicable. Furthermore, income from activity fall within the tax regime of independent natural persons: or, as the case may be, profit Non commercial (BNC) benefits industrial and commercial (BIC).
Article L.135 – 3 of the Commercial Code exempts the VDI from the requirement for entry into a professional register below a certain threshold of earnings. This threshold is defined by an order of the Minister of Social Affairs and is amended each year. If this threshold is exceeded for 3 years complete and consecutive, the seller loses its status of VDI and then must register for a professional register.
From a social point of view the VDI is however legally attached to the general system of social security and benefits of social rights in the same way as employees. It is not affiliated to the Regime Social des Independants (RSI).

It is thus possible to combine revenues from VDI:

  • with income from another activity of sale under statute VDI, sellers can indeed collaborate with several direct selling companies within possible limits of subscribed contracts (e.g. Prohibition of sale directly competing products),
  • with the income from salaried or self-employed activity in progress, subject to possible incompatibilities related activities between them or, where applicable, to their social security systems between them.
  • with income from public officials if the legal conditions for cumulation are satisfied,
  • with the return to employment assistance allowance paid by Pôe employment within the framework established by the Convention of February 19, 2009,
  • with the provision of home of the young child (PAJE) under the "free choice of activity complement",.
  • with old age benefits. The diversity of regimes and situations requires consultation of the matching fund,
  • with the invalidity pension of social security within the limits established by articles L. 341 – 10, R. 341 – 16 and D. 341 – 2 of the code of social security, with the allowance for disabled adults,.
  • etc.

 

 

VDI agent, buyer-reseller, VDI broker VDI.

The VDI may be offered three types of different contracts which, without changing his social status, will alter the nature of the business relationship between the company, the seller and the client: VDI agent, buyer-reseller, VDI broker VDI.

The VDI Broker contract is still very little used. Direct sale companies, according to their mode of organization, offer either the VDI agent contract, or contract of VDI buyer-reseller, overall except equal.

The proposed contract must and clearly define what type of contract it is.

Regardless of the type of contract offered, the seller has a high degree of autonomy in the Organization of its activity (prospecting customers, organise meetings, sales meetings, products,…) and determines freely while it intends to devote to its activity and its financial goals.
In all cases also, the compensation plan and, where appropriate, "the seller guide" are annexed to the contract of the VDI.

VDI agent

The mandate is defined and governed by 1984 and following articles of the civil Code.
The VDI contract stipulates that the company (the principal) gives the seller (the agent) the power to take orders from the customer in the name and on behalf of the company.
The company remains the owner of the goods and the seller does not have to acquire them. Sometimes the contract of mandate can be associated with a deposit contract. In this case, the seller was also given a mission of storage of the goods to be delivered.
The terms of the contract will allow to define precisely the scope of the mission's vendor agent (with regard to the delivery of the products, the collection of payments,…).
In consideration of its activity, the seller collects commissions generally sitting on the realized turnover and on which social security contributions will be calculated.
The seller whose activity becomes full-time and whose earnings exceed the legal threshold will need to register in the Special Register of commercial Agents and become Agent Commercial.

VDI buyer-reseller

In this case, VDI provides contract that the seller will buy then will resell to turn the goods provided by the direct selling company.
The seller benefits from volume discounts on the products it sells and delivers to its customers with a profit margin. This margin will be the earnings of the person concerned, on which social security contributions will be calculated.
The seller is free to apply resale tariffs it wants, within the limits of any tariff maximum recommended by the company.
The terms of the contract will allow to clarify the operation of the business relationship.
The seller whose activity becomes full-time and whose earnings exceed the legal threshold will need to register in the register of Commerce and companies and will become commercial.
Generally, the seller must ensure, before committing, that the proposed written contract is balanced and that the company provides technical support at the start of the activity and practice to facilitate the smooth running of the first sales and development.

The obligations of the company

A written contract: the contractual relationship must be formalized by a written document specifying the reciprocal obligations of each party. The conditions of remuneration, as elements of the contract, must be perfectly defined and clear.
Attention: the Distributor under statute VDI is always contract with the company and never with independent distributors thereof.
Information from the seller on its status and its statutory obligations: on the occasion of the signing of the contract, the seller must receive detailed information on its obligations and its commercial, fiscal and social rights from the company. This information is usually compiled in the "vendor guide" companies.
Training: the company generally offers an initial training, prior to the signing of the contract or immediately after:
  • products and services to distribute, marketing techniques and the Organization of the distribution,
  • legal consumer protective legislation and professional ethics.

The Federation of the direct sale offers on its site, in free access, a training CD-Rom entitled "The direct sale with confidence" which focused on the regulation of the sale home.

Some companies also offer during the contract VDI or if the seller is moving towards another level of responsibility (in becoming Agent Commercial or trading for example), to participate in training designed to improve his skills in the sale or organizing its activity.
The trade action: the seller may be associated with promotional and publicity actions in the form of samples, gifts, travel for customer, hostess or to himself. The seller may also be invited by the company to participate in the sometimes festive events it organises through its commercial strategy.

The obligations of the seller at home independent

The seller is bound to a duty of loyalty towards the customer as of the undertaking, particularly regarding respect:
  • protective regulations of consumer and professional ethics,
  • the exclusivity of prospecting, demonstration and sale of products or services to individuals in places determined by the law (statutory conditions),
  • operating rules established by the company to protect its image and that of its products or services, or to ensure the organizational functioning of the distribution network and its integrity. These rules are explained in the contract, the "seller guide" but result also established practice and the seller is informed.
Although it is not formally an obligation for the seller, it is very strongly recommended to the VDI, in their personal interest, to subscribe to an insurance company guarantee "professional liability" for their sales activities and a guarantee for the professional use of their vehicle. Some direct selling companies offer an affiliation to the contract of insurance of one of their partners insurers.

The provision of service of animation

A number of companies organizing networks exclusively or mainly composed of independent allow in their contract VDI experienced to sponsor with other vendors and allow them to form a team of salespeople that they will be responsible to animate for the purpose to develop the skills and the sales of each of the members of the team as well.
This specific function of the VDI is a service delivery that it makes to the company and that it only pays in the form of "animation commissions".
This function is framed legally by article L.135 – 2 of the Commercial Code, article l. 122 – 6, 2 ° of the French consumer Code and the terms of the contract in such a way that the VDI network members and company revenues come from sales of products and/or services to consumers.

Commercial tools

Start activity and throughout the contractual relationship, the company will lend or will propose the acquisition of tools for sales, collections, and for the VDI buyers-resellers a stock of goods.
  • The case of demonstration or starter kit: this kit allows the seller to start its activity. It contains, for example, samples, catalogues, tools for sale, rates (only recommended where appropriate) and customer orders. Are content will be renewed regularly.
  • Collections: in certain sectors (textile, jewellery…) the companies propose to the VDI work with collections that are updated several times per year. The undertaking must inform the seller of the modalities of operation that has been set in place for these collections. They can be loaned or sold, with the possibility to acquire them free if a minimum turnover was conducted over a period of time for example.
  • Inventory of goods: VDI buyer dealer will be required to develop a stock of goods which will be for him (a stock whose volume must remain reasonable and consistent with the capacity of distribution of vendor). It has then, pursuant to article l. 122 – 6, 2 ° of the French consumer Code, a legal guarantee of recovery of unsold goods to at least 90% of their purchase price, over a period of one year.
Learn more: Download article L.122 – 6 of the Code of consumption
Note: pursuant to the Code of conduct for direct selling companies, Member of the Federation of the direct selling companies undertake, consistent with legal requirements and some aspects in addition to these, that:
  • "Admission fees and other expenses necessary for the activity supported by a seller, when its recruitment or on a periodic basis, with the exception of purchases of goods for resale to consumers (for buyers resellers), shall not constitute a source of profit for the company or a source of income for sellers". Section 2-5.
  •  "A breach of contract by the seller, the company must resume stocks of marketable products, demonstration kits, training materials, aid for sale acquired in the past 12 months in a State of resale or use, and credit on the basis of the actual net acquisition cost possibly reduced by a sum paid by the seller which may not exceed 10% of the actual acquisition cost". Article 2-6.
The status of VDI has been imagined and designed so that the seller has the least possible approaches and bureaucracy to assume its social protection or the taxation of its income. There is however a minimum essential.

Social protection of the home independent seller

The VDI, by definition not enrolled in a professional register, fall under the general system of social security by application of article L 311 – 3, 20 °. They are therefore not, like other independent, attached to the Social of the independent (IHR) Regime.
Learn more: Download article L.311 – 3

Registration for social security: when the VDI starts its activity, it must communicate to the company his social security number or, if it has never been registered, personally make the request to the Caisse Primaire d'Assurance Maladie (CPAM) in the shortest time limits (article R. 312 – 8 of the social security code).

The VDI is an independent, the company does not have to make Declaration Unique of hiring to recruited vendor.

The calculation and payment of contributions to the general system of social security: pursuant to article R.312 – 5 of the Code of social security is the company which will calculate the amount of social security contributions (insurance, old-age, employment injury insurance,…) on the basis of the gross income of the VDI (margin and/or commissions) by applying the scale fixed by the order of 31 May 2001 and its circular application and then pay them to the URSSAF.
A deduction shall be prepared and submitted to the vendor showing particular identification data, gains during the quarter and the amount of payroll taxes owed and paid.

The VDI is an independent, no mandatory contribution of unemployment insurance is due. The VDI is therefore not entitled to unemployment benefits in respect of his home sale activity.

Entitlement to health insurance: the conditions of human illness, maternity, disability, death are defined by articles R. 313 – 1 to R. 313 – 17 of the code of social security and are the same as for employees.
Validation of quarter of pension base pension: the validation of quarter of the basic old-age insurance contribution is defined by articles L. 351 – 2, R. 351 – 1 and R. 351 – 9 of the code of social security and are the same as for employees.
Attention: the VDI does not contribute to a complementary pension fund and therefore acquires no rights to this title.
The VDI must pay attention to exercise a minimum of activity and therefore to (through the enterprise) devote a minimum of contributions to see claim the benefit of social benefits and validate quarters of retirement to the basic scheme. These minima are different from one benefit to another. For more specific information, refer to the practice of the VDI Guide.

The tax status of the home independent seller

Account the level of revenues normally collected by the VDI, the vast majority of them qualify for a franchise in base of VAT and the system of micro-enterprises for the taxation of income.

However, the VDI may not opt in respect of its sales activity in home under statute VDI, for the social and fiscal regime of the small entrepreneur.

The declaration of commencement of activity:
To be correctly identified by the tax authorities, the VDI shall make a declaration of commencement of activity with the Centre of formality des Entreprises (CFE) of the URSSAF whose jurisdiction it falls when business becomes usual, i.e. in the first months of the first sale. Most of the VDI can accomplish this by invoicing from the URSSAF website: www.cfe.urssaf.fr/saisiepl/unsecure_index.jsp. This statement does not imply registration for a professional register but allows a statistical identification and tax by the awarding of an APE code (47.99 A sale at home) and SIRET number. If necessary, the direct selling company will provide useful indications to correctly fill out this form.

The franchise base of VAT and the tax system of micro: to benefit of this franchise and the taxation of micro, the VDI must not exceed the following thresholds of annual revenues:

  • for an agent (benefit Non commercial, micro BNC), the annual gross amount of commissions (on sale and possibly animation) must be less than €32.100 (threshold in 2010),
  • for a buyer-reseller (benefits industrial and commercial, micro BIC) turnover annual sales activity must be lower than €80.300 and, within this global threshold, any commissions less than €32.100 (thresholds in 2010) animation.
In this case, the VDI will not charge or will deduct VAT, its sessional result will be calculated at a flat rate by application of a representative deduction of costs and it will be given to keep accounts (only a log book and a register of purchases, as applicable).

The income statement: to declare its income from activity in respect of the taxation of income of natural persons, the VDI must procure supplementary form 2042 C to center of taxes or on the Internet.

  • The gross amount of the commissions (on sale and possibly animation) of the VDI agents must be declared in the topic in the profit Non commercial (BNC) not professionals or professionals as appropriate.
  • The turnover for sales activity and possible gross commissions of animation of the VDI buyers-resellers must be declared in the section devoted to industrial profits and business (BIC) not professionals or professionals as appropriate.
The economic territorial Contribution:
Like any independent and as soon as its activity becomes habitual, the VDI is in principle liable for the Contribution economic territorial (CET) provided for in articles 1447-0 et seq. of the general tax code. This one, which has replaced the business tax in 2010, consists of land assessment (land Contribution enterprises, CFE) and a cositation on the added value. Only the first of the two is likely to be caused by the VDI, the second being due only if the annual turnover exceeds €152.500.
However, pursuant to article 1457 of the same Code, the VDI enjoys a total exemption from the CFE when his gross annual salary is less than 16.5% of the annual social security ceiling (€ 6.001 for remuneration received in 2012).
Gross annual salary which is taken into account in assessing whether the threshold has been exceeded is the annual cumulation of the gross commissions on sales agents VDI or gross margins of the VDI buyers-resellers (either the turnover less the purchase price of the goods) plus any gross commissions of animation. In application of sections 1467 and 1478 of the same code, the reference periods taken into account to assess whether the threshold is exceeded are n, n-1 and n-2 the first three years of activity and n – 2 following years.
Attention, when activity began during the year, a theoretical remuneration for the first year will be reconstituted on the basis of the remuneration collected during the months of actual activity.
Thus, the VDI whose remuneration during the first year of activity is less than this threshold, will benefit from a total exemption from the land Contribution for a maximum of three years even if it has exceeded the exemption threshold in its second and third years of operation.
When the VDI is not exempt from the CFE, it won't anyway due as from the first year of civil Yang of activity, therefore for the year in which the activity started.
The amount due will be in the vast majority of cases the minimum contribution defined in article 1647 D of the general code of taxes. If the town foreseen and the VDI demonstrates that its activity is part-time or for less than 9 months in the year, it may request a reduction of half of this minimum contribution.

 Commercial agent

Agent Commercial status is governed by articles L. 134 – 1 to L. 134 – 17 of the Code of commerce.

The Commercial Agent can be either a natural person (exercise of the activity in personal name) or a legal person (EURL, SARL, etc.).
It is an agent responsible for permanently and independent, to negotiate and possibly conclude contracts of sale, purchase, rental or services, in the name and on behalf of other companies (or constituents).

The commercial officer is considered to be a true creator of enterprise and must not be under the subordination or its constituents. This is what distinguishes it from the employee representative (VRP or representing non-statutory).

The different existing criteria for assessing this independence, include:

  • freedom of organization of its undertaking: the Commercial Agent, unlike the employee representative, has a broad initiative to develop the marketing of products for which it is responsible. It does not have to comply with the instructions of the principal (for example, it doesn't have to provide accounts of visits). It can recruit its staff without permission to obtain,
  • freedom of choice of its activities: it may for many constituents (subject to his non-compete obligation, provided that it is written in the contract for Agent Commercial) at the same time other professions,
  • In contrast to the employee representative, the Commercial Agent takes risks and committed its heritage (or that of his company, following the legal structure chosen),
  • like any contractor, it can acquire and transmit its business assets.

Fiscal and social aspects:

If the Commercial Agent is an individual:
  • It is imposed in respect of the tax in the category of the benefits Non-commercial (BNC),
  • It must join:
    • social plan for the self-employed to qualify for sickness, maternity, retirement, disability and death, blankets
    • to the URSSAF, to benefit from the family allowances (payment of contributions to family allowances, the CSG and the CRDS to the URSSAF, benefits paid by CAF),
  • It has the opportunity to join an approved management association.
If the Commercial Agent is a legal person (EURL, SARL,…):
  • the social protection scheme of linking – general scheme or regime of Independents – leaders and associates will depend on the legal form of the company and their status therein,
  • the taxation of shareholders will depend on the company tax (income tax if EURL, tax on corporations for others),
  • If the company is subject to the (IR) income tax, it can join an association of Chartered Management.
In all cases, the Commercial Agent is liable for the professional tax. It enjoys however VAT deductible if it falls within the tax system of the micro-enterprise.
 

The Commercial Agent contract

Writing is not compulsory but strongly recommended. The contract is to term or indeterminate status.
Parties are required to a reciprocal duty of loyalty.
The Commercial Agent has a duty of non-compete: it may indeed represent a carrier of one of its constituents without the agreement of the latter.
The remuneration is freely determined by the parties. This is in most cases of a Committee sitting on the realized turnover.
A clause of non-competition after the termination of the contract can be predicted: it must be established in writing, limited in scope (duration of the ban, concerned sector, goods concerned) and be subject to financial compensation.
The termination of the contract gives rise to compensation except when it is the result of a rupture at the initiative of the Agent, of serious misconduct or the assignment of the contract to a third party (with the agreement of the principal).

Before starting their activity, commercial Agents and traders must register for a professional register.

Commercial Agents must register in the Special Register of commercial (CCSN) Agents in all cases and, in addition, registry du Commerce et des sociétés (RCS) when they exercise their activity in form of a legal person.
Traders will have to register in the register of Commerce and des sociétés (RCS) that they exercise in personal or corporate form.
Registration will be conducted aimed at the Centre of formality of enterprises (CFE). There is at least one per Department. As a general rule the CFE sit at the registry of the tribunal of commerce for commercial Agents, individuals and the Chamber of Commerce and industry (CCI) for commercial Agents in the form of society and individuals traders or in the form of society.
For more information, see the directory of the CFE of INSEE 
In application of articles L. 135 – 3 of the Code of commerce and 5 of the Decree of 31 May 2001, the registration in the register of commerce and des sociétés (RCS) or in the special register of commercial agents (CCSN) must be performed by the VDI that got earnings over 50% of the annual ceiling on social security each year and for three full years and consecutive (these conditions are cumulative) , €18.186 for the year 2012, €17.676 for 2011, €17.310 for the year 2010 and €17.154 for 2009.
Target compensation is taken into account for the calculation of social security contributions for VDI, or the gross remuneration after deduction of business expenses.
Caution: If the threshold is exceeded, the sellers will become then either agents or traders. They can, if they meet the conditions, remain in the tax system «special BNC» or «micro BIC», as the case may be, or opt for the scheme of the social and possibly tax levy discharge applicable to the small entrepreneur. Pursuant to article L 135 – 1 of the Commercial Code, for a sale "at home" activity under articles L. 121 – 21 et seq. of the Code of consumption, the choice of regime of the small entrepreneur does not exempt the seller to register for a professional register (RSAC or RCS).
 note of experience it is important not create its auto business before going to the commercial court, because the software is unable to make the correction and you will be asked to remove your company to recreate.

You must complete the Cerfa No. 13847 * 03 or other number: AC0 – ACO

https://www.service-public.fr/professionnels-entreprises/vosdroits/R20446

and pay attention to unemployment, moreover, to take a wide status in your activities.

Be aware that the autoentrepeneur site is poorly done and it bug. You will need to pay fees for the registry by cheque. The easiest way is to go directly to court to register otherwise it's a hassle.

For legal entity (company) or person Physics (sole proprietorship).

Can also be used to declare in auto-entrepreneur.

 A vendor, at the beginning of its activity or after being VDI, can create its business, in personal or company (sole proprietorship Enterprise limited liability, company to liability limited (SARL), company in name collective (SNC),…), to regulate its activity of sale of the products and/or services of the company or companies of direct selling (and possibly other activities) with whom he collaborated. 

The SARL and the SNC require at least 2 partners.

The EURL and individual enterprise corresponding to an activity developed by a single person.

The seller can benefit from the many features to support the creation of business proposed by the State, but also local communities.

The merchant can be either a natural person (exercise of the activity in personal name) or a legal person (EURL, SARL, etc.).
Unlike the Commercial Agent, the trader buys and resells the goods or of the companies with which it collaborates. It is therefore for its own account. It is free to apply resale tariffs it wants, within the limits of any tariff maximum recommended by the company.

As an independent, the trader organized freely his company and its activity within the limits (protection of the image of the company, its products,…) optionally defined in the distribution agreement which binds it to the company. There is no relationship of subordination between him and the company.

Like any entrepreneur, the merchant takes risks and committed its heritage (or that of his company, following the legal structure chosen). It can acquire and transmit its business assets.

Fiscal and social aspects:

If the merchant is a natural person:
  • It is imposed in respect of the tax in the category of benefits industrial and business (BIC).
  • It must join:
    • social plan for the self-employed to qualify for sickness, maternity, retirement, disability and death, blankets
    • to the URSSAF, to qualify for family allowances (payment of contributions to family allowances, the CSG and the CRDS to the URSSAF, benefits paid by CAF).
  • It has the opportunity to join an approved management association.
If the dealer is a Corporation (EURL, SARL,…):
  • the social attachment system (sickness, maternity, retirement, disability, death, family allowances,…) leaders and associates will depend on the legal form of the company and their status therein,
  • the taxation of shareholders will depend on the company tax (income tax if EURL, tax on corporations for others),
  • If the company is subject to the (IR) income tax, it can join an association of Chartered Management.
In all cases, the merchant is liable for the professional tax. However, it enjoys a franchise of VAT (provided that they do not charge) if it falls within the tax system of the micro-enterprise.

Contracts with suppliers

Trade cooperation between the supplier of products company and the trader dealer can take different contractual forms: framework contract simple distribution or more elaborate contract (contract for exclusive concession for example).
 

The Code of conduct for direct selling companies governs the relationship between vendors and businesses. 

These rules are applied by the Member companies of the Federation of the direct sale.

It governs the relationship between the company and the vendors by 7 commitments:

 Compliance with the Codes of the direct sale by the seller

The company must require vendors, as a condition of participation in the Organization of sale of the company, compliance with the Code of ethics of the direct sale as well as the Code of conduct of identical to this ethical direct selling, or rules of conduct business.

 Information

The actions taken by companies and vendors for the recruitment of new sellers are carried out with a permanent desire of clarity and honesty. Companies and sellers communicate complete and verifiable information on the terms of the proposed contract, and any promise should be held. Companies shall inform, with precision and accuracy, sellers on the prospects for earnings, professional fees, commercial, tax rules, social applicable and revenues related to sales made either by the vendor itself, or by vendors it animates. The procedure for obtaining of income must be transparent, understandable and unambiguous.
The companies provide all information about deliveries, cancellations, and anything significant in the context of the commercial contract between companies and sellers.
Companies and sellers must conduct their actions in respect for the privacy of the seller, for example refraining to present prospects for personal or family developments which are not the professional field. They shall also refrain from any action from other vendors in religious, political or similar fields.

 Sources of revenue

Give sellers an information on sales prospects and income based on verifiable facts.
Any income originates in sales activity, including purchases for personal use of sellers, so vendor revenues evolve based on the price for sale of products or the number of its sales and/or sales obtained by the Group of sellers that he recruited, trained and facilitated.

 The written contract

Companies must provide sellers a written contract signed by the seller, and containing all the essential elements of their collaboration.
If a direct seller buys products, promotional material, aid to the sale or demonstration cases when it starts operations, the contract in writing shall grant him the right to return, in their initial state, the case of demonstration, and all potential purchases he made, with full refund of the sums he has paid as If he terminates his contract in writing, within a period of 14 calendar days of the date of signature of the contract.

 Administration fees

Administrative costs and other expenses necessary for the exercise of the activity supported by a vendor during his recruitment or during its lifetime, and possibly on a periodic basis, with the exception of purchases products for resale to consumers or for his personal consumption, shall in no case constitute a source of profit for the company or a source of income for sellers.

 Communication media

Companies shall prohibit vendors propose to other media vendors, whatever they may be, who do not respect the standards of the company.
These proposals should never take a mandatory character. Vendors who offer training and promotional tools, audio, audiovisual, electronic or print form, must receive the prior approval of their business, which validates that their design and their content comply with the company's policy and the ethics of the profession.
Proposed media cannot constitute a source of income for sellers, and this activity must be accompanied by guarantees of occasions in accordance with the rules of this Code.

 The expiration of the contract

A breach of the contract of a vendor, the company must resume stocks of marketable products, demonstration kits, training materials, aid for sale, acquired in the past 12 months in a State of resale or use, and credit on the basis of the actual net acquisition cost possibly reduced by a sum paid by the seller which may not exceed 10% of the actual net acquisition cost.

The stock of sellers

The companies deal directly with commands transmitted by all vendors, pour them into consideration commissions, bonuses and discounts.
Companies must not encourage retailers to stockpile products unrelated to the potential of sales related to the nature and the competitiveness of these products on the market, the competitive position as well as return and refund of the products policy. Companies take the necessary steps to ensure that the products the vendors stock do not exceed the amount that can reasonably be sold by them within 30 days, where appropriate taking into account their personal consumption.

 The determination of the income

The companies must submit to each seller periodic, at least quarterly statements about their income (commissions, bonuses, discounts, or any other significant element, in accordance with the contract signed between the company and the seller, and in accordance with the commercial rules and social obligations), and sales, payments, deliveries and cancellations.

 Training

Companies and sellers form other sellers with adapted in content and time information and including at least the direct sale-specific laws and rules Codes of the direct sale, other legal obligations of the seller, the presentation of the company and its products or services, as well as the conditions of sale or delivery and credit.

The criteria to verify before engage you in a MLM

Before venturing into any MLM company, here are some essential conditions to which you must absolutely be attentive:

  1. Make sure it is not a Ponzi scheme
  2. A solid management team that was behind it, several years of success in the MLM industry.
    They know how to combine and develop a perfect opportunity both today and for the next 10 years to come.
  3. The company has great products 'Very popular' today and for years to come.
    High quality products, providing great value added to the final consumer (this is very important)
  4. A company offering products with the buying and selling price is competitive compared to similar quality products, offered in the traditional distribution.
    The price should not be a hindrance. If you consider it expensive, the people to whom you propose will find it definitely too expensive.

  5. A compensation system easy to understand and to explain which is especially advantageous for distributors.

  6. An efficient and easy-to-duplicate marketing system. Effective training for beginners, presentation systems, allowing you to develop quickly. Ideally the company gives the lead.

  7. The possibility of using internet as a means of recruitment. If the company limit you in your marketing efforts, then you better change quickly.
    More you freedom in your way of managing the business, best in your results.

  8. A company in full expansion, developing rapidly and globally, the rate of attrition (the number of distributors is disengaging) is low…

  9. A company where it is possible to earn money. A large number of distributors exceed the monthly commissions EUR 2 000.

9. Look also at the number of distributors that are thrown out (which it withdraws the mandate) because often this traffic stats with for example 15 hired 5 remaining. Look at the objectives.

Before start you breaking the myths:

 

1 – MLM, it's easy.

No this is not true, the MLM is simple in concept but not more.

Forget the promises of the kind "win €5,000 per month by working two hours a day!". A full time seller can expect to earn the minimum wage. But working that one or two days a week, you do exceed hardly the €400 per month.
The average annual turnover by a seller at home working on a casual basis in 2010 amounted to €6 030, according to the European federation of direct selling associations (Seldia). It is therefore more of an income supplement, Martin "where the goal is mainly to have fun," testifies.
Senior citizens arrive in number on this sector: in addition to completing their retirement, direct selling provides a supplement of conviviality and socialization. Vendors – women, 77 percent – are 90% part-time multi-level sales.
More revealing still: it is commonly accepted that 97% of people who engage in multi-level sales drop quickly.
A figure due no doubt to the promises of easy money, who are confronted with the reality of work.
For Jacques Cosnefroy, it is also due to the fact that more than in any other sector, anyone can try his luck: "80% of sellers had never been trained to trade before! So, it is a chance for them. As for those who succeed in earning their living, it is not uncommon that they then move to entrepreneurship".

2 – Just talk to 3 people and you'll be rich

No, we must speak of thousands of people to be rich. This is the big problem of the beginner and his address book.

A fact remains, to build your business MLM, it is necessary to create relationships, it is not for nothing also known as MLM, relationship marketing.

road-sign-lying-lies

3 – In this MLM, one becomes rich without recruiting

Wrong, it is a myth. It does not exist.

Recruit a Godson can not be paid: the commission cannot take place on the sales of the latter. Because the goal of the company is to sell its products. This is where the issue of the status of Sponsor: If the Godson is not correctly formed, it will sell little, or not at all and will not generate or turnover business, nor commission. Recruit a friend therefore requires a very significant personal investment: we must train them, support it, motivate him… This represents a true team leader job, which is not within the reach of all.

4 – I'll help you to do anything, just sign the contract representative

Only the contract representative interested him.

 

5. in MLM, you don't need to recruit, just do reviews…

You cannot do millions of customers to you alone.

But a good network must allow its sellers to live exclusively of sales activity. "It is essential that in an MLM, the seller has the possibility, if he wishes, to simply remain vendor, without being obliged to sponsor other"

In general, commissions are between 25 and 35% of the price of the product, some up to 40%.
«That being said, a commission of 15% on a very easy to sell product can earn more revenue than a 40% commission on a product difficult to place,

6 – You don't need training in MLM, everyone can do

Flee everything simply. Everyone can not do MLM because everyone may not be commercial. That's why there are trainings. It takes a certain profile to succeed and the desired profile is (drum roll) contractor…

 

7 – You will have financial freedom in less than 2 years

My opinion: false, may be will you begin just to earn the minimum wage in 2 years.

 

8 – My MLM company is the best.

My opinion: this is the kind of person who believes.

 

9 – Use your friends and your book for your first sales

Your friends and relatives will tend to accept your offer, for you to please or to have peace if you have the chance, because if even they do not, who will accept? If they do not accept your address book is useless and you won't be able to start. But often they do not accept because they want you to do your evidence.

The beginner has no book is going to have.

 

 

10 – We offer the best training in our MLM business

My opinion: idem

 

11 – With MLM, you will become very rich very quickly

No, the MLM is not a way to get rich quick… sorry. review highest point

Recruit a Godson can not be paid: the commission cannot take place on the sales of the latter. Because the goal of the company is to sell its products. This is where the issue of the status of Sponsor: If the Godson is not correctly formed, it will sell little, or not at all and will not generate or turnover business, nor commission. Recruit a friend therefore requires a very significant personal investment: we must train them, support it, motivate him… This represents a true team leader job, which is not within the reach of all.

Nevertheless forget the promises of the kind "win €5,000 per month by working two hours a day!". A full time seller can expect to earn the minimum wage. But working that one or two days a week, you do exceed hardly the €400 per month.
The average annual turnover by a seller at home working on a casual basis in 2010 amounted to €6 030, according to the European federation of direct selling associations (Seldia). It is therefore more an income supplement, "where the goal is mainly to have fun", reflects Sylvie C.
More revealing still: it is commonly accepted that 97% of people who engage in multi-level sales drop quickly.

12 – Just sign 2 people who will sign 2 persons each and you will be millionaire

Life is not as beautiful… sorry. Otherwise my sponsorship crowdimo list would already have 200 investors and not 15.

 

13 – I'll put a system in place for you, just sign the contract representative

Ask to see the system before signing (just in case).

 

14 – You didn't need to recruit, there will be overflow anyway

If everyone expects the overflow, there will be no overflow in the end…

 

15 – You are not good in recruiting, just make customers

We already talked about it, is not it? You must find a way to become good at recruiting and good sales, especially on sale. It therefore remains an almost true assertion.

 

16 – It's easy to find potential customers or clients

Sorry to disappoint you, but this is false. It is even the most difficult part. Otherwise everyone would be rich, isn't it?

Be aware that it must often have the cash, lots of cash especially in the beginning to buy prospect list…

About sponsorship

The issue of the status of Sponsor: If the Godson is not correctly formed, it will sell little, or not at all and will not generate or turnover business, nor commission. Recruit a friend therefore requires a very significant personal investment: need to form it, support it, motivate it… already that find the Godson is difficult, then in addition it is necessary to train them and that he abandoned (97% dropout)

Then the client finally found, all "Networkers" can testify: "is a crazy time trying to convince customers that the multilevel is not a pyramid scheme. Time to justify that the box is. Because, if the "Multi level marketing" is perfectly legal, the system pyramid, them, are prohibited in all the countries", says Jacques Cosnefroy, Federation of direct sales.

And lastly is for sale.

17 – You can combine several MLM

Yes – Not on the paper, you can combine several MLM. But is it really feasible to organize meetings of sale for 2 companies? To train for 2 product catalogues? And would that be consistent? Tupperware Wednesday, Herbalife Saturday… Hum it's average. After there are 2 additional companies of course. In finance difficult to 2 or more (real estate and credits and insurance) products.

18 – You can work with who you want!

Wrong! In MLM, you work with those who are willing to work with you! It's so hard to recruit in MLM, that is not really choosy to say: «not him I do not take it because it is not a leader. If you choose really with which you are working, in 10 years you will always have 3 or 4 people in your network. Even your friends are difficult to convince, because they know that work you not long and wait for the evidence, who can never come because you are unable to sell.

19 – You can work from anywhere in the world!

There again, this is not really realistic. For a simple reason: in traditional MLM, it is you who deliver your customers. So you must be present in a country where your company is present. But you must also be present where your customers are present (it is better to organize sales meetings). So forget the Kenya savanna or Amazon…

20 – You can work when you want!

This is rather true at first sight. If Thursday afternoon you do not work, you have no obligation to do so. But do you mean that you are going to gain anything this day, insofar as your income the first years are active income, and not passive income. Sales meeting no = no money. No recruitment maintenance = no development of the activity.

The average annual turnover by a seller at home working on a casual basis in 2010 amounted to €6 030, according to the European federation of direct selling associations (Seldia). It is therefore more an income supplement, "where the goal is mainly to have fun", reflects Sylvie C.
Senior citizens arrive in number on this sector: in addition to completing their retirement, direct selling provides a supplement of conviviality and socialization. Vendors – women, 77 percent – are 90% part-time multi-level sales.

21 – It's 100% passive income

I just talk about the multi-level affiliate saying it wasn't easy, as the traditional MLM. The difference is that in the membership, it's a true passive income. In traditional MLM, it is in large part from the active income, it means that if you stop to go on vacation, you do not touch the money. It takes years to have a passive income, and more if you sell more, you lose your mandate and the company pays you more your affiliations so you lose your passive income (contracts are often of 1 year).

22 – You have absolutely no expense in your activity

Okay, this first point was rather a lie of crooks

When we recruit, there is often a service brake: the initial investment, and yes the car gasoline rent etc? It's not free.

Instead it should be a maximum of liquid: for your expense to buy the list of leads for your business and as you sell less experienced someone need even more money. More by (often independent) status, we have beautiful receipts.

23 – You have no need to sell or recruit

It is downright anything!

Conclusion:

An interesting and powerful system with its flaws and its advantages and a clearly commercial trade.

Notes and references

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