A company should only pay commissions on products and services offered to the general public.
Generally, network marketing companies mandate an upfront sales kit cost, typically in the $49-$99 range. This is an at-cost fee for sales and marketing materials support. The reimbursement cost is passed on to distributors. It is not a profit center for the company and no commissions are paid on such required fees. Almost all regulatory agencies and MLM statutes recognize and validate this practice. Beyond the at-cost sales kit, companies typically offer optional sales tools to distributors. Because support products are optional, they do not need to be at-cost, but any sales support tools should not be commissionable. A company should only pay commissions on products and services offered to the general public.
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