Earthly Clean sells a wide range of private label environmentally friendly cleaning products. All products are designed to be effective at cleaning, yet easy and non-toxic on the environment. Earthly Clean has contracted with a large national producer of environmentally friendly products to manufacture these products with the Earthly Clean private label. This vendor was chosen because of their quality products as well as their flexibility in offering low minimum orders ($150). The following are the initial products that Earthly Clean will offer. As the company grows they will consider adding new items to the product list as demanded by the market:
Environmental cleaning products were chosen for a several reasons:
Because Earthly Clean buys private label goods direct from the manufacturer, even after paying out the sales commissions, their products are competitively priced. This is achieved through the private label procurement as well as the more efficient, grassroots system of distribution.
Earthly Clean will use a multi-level marketing approach (MLM) to the sale of these products. An MLM approach is a grassroots networking based approach where products are sold direct from an individual (distributor) to the end consumer. The distributor receives the products from Earthly Clean who buys direct from the manufacturer. When a distributor is able to recruit a new person to sell these products (new distributor) then the "recruiter" receives a sales commission for all of the sales made by person #2. If person #2 is able to recruit another distributor (person #3) then both the original distributor and distributor #2 receive commissions from sales generated by person #3.
The MLM system in essence leverages peoples relationships and networking skills. It creates the ability to be your own boss, making sales pitches to friends and associates on your time schedule. It creates a common man, grassroots implementation of a real world distribution channel.
This arrangement differs significantly from pyramid schemes which are illegal in the United States. A pyramid scheme is a system where individuals sell products and get commissions from the recruitment of new people to also sell the products. The more people they recruit, the more money they make. Pyramid schemes are illegal and are broken up when they are found to exist. The regulatory analysis that is applied to determine if the business is a MLM or a pyramid scheme is as follows:
If regulators believe the business is more like #1 it will be found illegal, against public policy, and shut down.
As it stands, Earthly Clean is clearly a MLM venture as participants get compensated for the products others sell, not for the specific recruitment of individuals.