Question

a jewelry direct sales company pays its consultants based on recruiting new members.

the company is running a pyramid scheme, which is illegal.
the company is running a pyramid scheme, which is legal.
the company has implemented a legal and ethical plan for growth.
the company uses this method of compensation to reduce the fee for the product sample kit.

question 13 (5 points)
which of the following business opportunities allows a business to purchase and sell a companys products, but not the right to use that companys trade name as its own?

cooperative
direct sales
dealers/distributors
licensees

Explanation:

Analyze compensation based on recruitment

Compensation based primarily on recruiting new members rather than selling actual products defines an illegal pyramid scheme.

Analyze business opportunities and trade names

Dealers or distributors purchase and sell a company's products but do not have the right to operate under or use that company's trade name as their own business name.

Answer:

Question 1

• (A) The company is running a pyramid scheme, which is illegal. (Correct answer)
• (B) The company is running a pyramid scheme, which is legal.
• (C) The company has implemented a legal and ethical plan for growth.
• (D) The company uses this method of compensation to reduce the fee for the product sample kit.

Question 2

• (A) Cooperative
• (B) Direct sales
• (C) Dealers/distributors (Correct answer)
• (D) Licensees