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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

7 Comments

  1. […] it’s hard to tell if most purchases are just by It Works! distributors (see bonus buying and inventory loading). Previous versions of the compensation plan explain that purchases of this type will be made in […]

  2. […] Director levels (and up) meet their “organizational requirements” by personally sponsoring 3+ active consultants. This can lead to sponsors telling the consultants to purchase additional inventory. This pressure to buy additional inventory can be confusing and cause inventory loading. […]

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