Dear DSAM Members,
Following the many enquiries from Members on selling of products online by Direct Selling companies, we have raised the matter with the Direct Selling Unit of the Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC). Append below is the clarification:-
- Online Selling by Direct Selling companies
In this situation, products are being sold from the official website of the Direct Selling company. All online sales by Consumers or Distributors must be linked to the official website. Distributors are not allowed to randomly create their own websites.
However, Distributors may host their own websites or blogs provided that this option is offered by the Direct Selling company in a company-standardised pre-formatted template. References to the products must still be link directly to the Direct Selling company’s website.
- Online Selling through e-commerce platforms / marketplace
In this situation, products are offered for sale by an individual or company via a third party e-commerce platform.This practice is illegal since it contravenes the Clauses of the Direct Sales and Anti-Pyramid Schemes Act 1993 (DSAPS) and Conditions of the Direct Sales License (AJL). Under Section 19 of the DSAPS entitled ‘Sales through electronic transaction’, the following is enacted;
19A. (1) No person shall supply by sale, or advertise for the supply of, through electronic transaction, any goods or services except in accordance with this Act or the regulations.
(2) Any person who contravenes subsection (1) shall be guilty of an offence.
If an online transaction is carried out in accordance with the Section 19 of the DSAPS, it is legal for Direct Selling companies to sell their products online via their own official websites. It is required that all online sales must be carried out in accordance to the DSAPS, such as MDTCC approved Marketing Plan, Conditions of the AJL, Sales subjected to Cooling Off period, Provision for Buy Back policies, etc.
We trust that the above clarifies the issue but should there be any further questions, please do not hesitate to contact the DSAM Secretariat.
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