inventory loading

Inventory loading is when distributors purchase extra inventory in order to participate in a program, meet personal volume requirements, receive commission checks or other bonuses.

Front-end loading is meeting monthly purchase requirements or personal volume requirements at the beginning of a month. Similarly, back-end loading is buying extra inventory later in the month. Often this is to gain position or to maximize bonuses.

The FTC explains inventory loading is one sign that a company’s incentive program actually is a pyramid scheme. “The people at the bottom make excessive payments for inventory that simply accumulates in their basements.”

See also: bonus buying

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