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The misplaced controversy about internal consumption: Not just a direct selling phenomenon

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  • Crittenden, Victoria L.
  • Albaum, Gerald

Abstract

Internal consumption in the direct selling industry has been at the heart of many debates over the past couple of decades. In this article, we contend that internal consumption is a widespread practice at all levels of the distribution channel and not something limited to the direct selling or the multilevel marketing (MLM) retail arena. While government regulators in some countries attempt to use this practice in MLM as prima facie evidence of illegal pyramiding, the results presented here provide evidence of the widespread use of internal consumption in all aspects of retailing. Thus, to attribute internal consumption as a negative aspect solely within the direct selling marketplace shows a misplaced understanding with regard to personal use, discounts, and company recruiting efforts. At the same time, however, our research shows that discounted purchasing of product for personal use likely brings little value to the company since it does not appear to result in increased job satisfaction or organizational loyalty from either the affected employees or the customer base.

Suggested Citation

  • Crittenden, Victoria L. & Albaum, Gerald, 2015. "The misplaced controversy about internal consumption: Not just a direct selling phenomenon," Business Horizons, Elsevier, vol. 58(4), pages 421-429.
    • Handle: RePEc:eee:bushor:v:58:y:2015:i:4:p:421-429
    DOI: 10.1016/j.bushor.2015.03.007
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    References listed on IDEAS

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    1. Crittenden, Victoria L. & Crittenden, William F., 2004. "Developing the sales force, growing the business: The direct selling experience," Business Horizons, Elsevier, vol. 47(5), pages 39-44.
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    Cited by:

    1. Ioana-Mădălina Purcaru & Ana-Maria Urdea & Cristinel Petrişor Constantin & Gabriel Brătucu, 2022. "Building Long-Term Business Sustainability: The Influence of Experiential Marketing on Sales Representatives’ Loyalty to Multi-Level Marketing Systems," Sustainability, MDPI, vol. 14(15), pages 1-16, August.
    2. Claudia Groß & Dirk Vriens, 2019. "The Role of the Distributor Network in the Persistence of Legal and Ethical Problems of Multi-level Marketing Companies," Journal of Business Ethics, Springer, vol. 156(2), pages 333-355, May.
    3. Feng, Pihu & Lu, Xin & Gong, Zaiwu & Sun, Duoyong, 2021. "A case study of the pyramid scheme in China based on communication network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 565(C).

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