Legal Question in Business Law in California
I do home jewelry parties. I would like to incentivize people to host parties in their home. Is it legal to pay party hosts a % of your pretax home party sales?
If someone wants to host a jewelry party at their home with my jewelry. Can I offer them a 10% cut of the sales made that day? And what precautions do I need to take?
2 Answers from Attorneys
Yes, so long as the "incentives" do not violate any of your written agreements with suppliers or distributors. You will want to have a proper set of agreements with these individuals so as to properly characterize their role(s) and the compensation plan.
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Abide by your trade suppliers' rules and policies. Giving commissions and similar incentives is legal, except I suppose it would be deceit to deny giving the incentive if asked.
I think a concern would be maintaining security and control over inventory, How do you account for each piece taken to someone's home and put on display? Are you in danger of pilferage or losses?
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