Prohibited Legislative Research, Multi-level Direct Sales

Multi-level marketing is a kind of store-less selling model that provides goods or service through well-woven network which is set up by distributors and all multi-level sellers on various levels. Awards are granted according to the sales volume of all the sellers. Multi-level marketing is fallen into the direct-selling premise and 93% of the direct selling companies adopts this model. By the end of 2004, China shall eliminate the restrictions on mobile wholesale or retailing and map out related regulations and law so as to implement its commitment in WTO. Direct selling is the major means of volatile marketing. In August 2005, Regulations on Direct selling and Prohibition on Multi-level Marketing, which both define the scope of direct selling and multi-level marketing. Their birth have shattered the dream long expected by the industry. In the previous academic research, multi-level marketing are welcomed and criticism and prohibition are seldom seen. This dissertation expounds the nature of multi-level marketing from economic and legal perspective which also become the grounds for prohibiting the model. It explores the multi-level marketing condition in China referring to the legislation of those countries who prohibits the model.Part Ⅰ : Direct selling and Multi-level marketing. Direct selling depends on sellers to fulfill marketing. Its subject includes tangible goods and intangible service. It doesn't hinge on traditional retail stores with more broader choice on selling points such as at home or working places. Direct selling divides into monolayer-level and multi-level marketing. The latter one is characterized by non-contract relations between the companies and their sellers, strong emotion values, career opportunity attraction and multi-level bonus system. The survival or demise of the multi-level marketing has aroused debates in all countries.Part Ⅱ: the Grounds for Prohibition of Multi-level Marketing. As...