DIRECT SELLING BUSINESS

DIRECT SELLINGS BUSINESS

Direct Sales refer to door-to-door sales, mail order sales or sales through electronic transactions. The Ministry of Domestic Trade and Consumer Affairs is the body responsible for the management of direct selling business. The Direct Selling Business is guided by the Direct Sales and Anti-Pyramid Scheme Act 1993 and the Direct Selling Regulations.

TYPES OF DIRECT SALES BUSINESS MARKETING

There are three types of marketing plans under a direct selling business, namely:

1.    Multi-Level Marketing Plan

•      The company will recruit/appoint individuals as members/distributors to distribute the company’s products.

•      The member/distributor concerned will appoint another individual (downline) to form a network selling the company’s products. The process of recruiting new members/distributors can be continued up to a reasonable level.

•      Each member/distributor will get a commission/bonus/incentive from personal sales and sales of members/distributors under his network (overriding bonus).

2.    Single Level Marketing Plan

•      The company will appoint a sales representative/sales agent and pay salary /commission/combination of salary and commission on the total sales made; and

•      The sales representative/sales agents are not allowed to appoint/sponsor other sales representatives /sales agents

3.    Sales Through Mail Order (Mail Order)

The sale of goods or services carried out by a person, either personally or through any authorized person by post or any other method of delivery including electronically.

CONDITIONS OF ESTABLISHING A DIRECT SALES BUSINESS

i)      The applicant must be a company incorporated under the Companies Act 1965/2016

ii)    Have paid -up capital by marketing category:

APPLICATION FOR NEW LICENSE AND RENEWAL

For NEW and RENEWAL applications for Direct Selling License, please refer to the KPDNHEP website for a checklist of required documents.

1.    Application documents must be in the order as in the checklist.

2.    All relevant documents must be certified by the Company Secretary.

3.    The company must submit the application through BLESS 2.0 and a copy of the application must be sent to the counter of the Franchise Development and Direct Sales Division of KPDNHEP either by hand delivery or post.

4.    The company’s application will be processed after the Ministry receives the complete documents. Only complete applications will be processed for consideration.

DIRECT SALES LICENSE TERMS

The list of conditions that must be met by the licensee can refer to the Application Procedure document on the KPDNHEP website.

PAYMENT RATE

The fee for the license is RM500 per year and must be made in the form of Bank Draft or Money Order and in the name of the Secretary General of the Ministry of Domestic Trade, Cooperatives and Consumerism.

LICENSE RECEIPT

Obtaining a license must be done personally by the Managing Director or Top Management of the Company and make a certificate of acceptance of the license conditions at the office of the Domestic Trade Division, Ministry of Domestic Trade, Cooperatives and Consumerism