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PostPosted: Fri Nov 18, 2005 12:59 pm 
I have a couple of bookkeeping clients who are Arbonne Consultants. Arbonne is a network marketing company that sells a vast line of health and beauty products. They are different from Mary Kay and Avon in that their Consultants do not generally maintain an inventory. Most of their income is from commissions from internet sales by themselves and people in their "downline". The Consultants send me invoices for items they have purchased from the Arbonne website to promote their business. About 60% of the items they purchase are for samples to give away to prospective clients, 20% are business aids, 15% are for personal use, and 5% are items they had originally intended for personal or sample usage, but ended up selling Retail. My question is, do I need to bother using an inventory account since inventory is not generally maintainted as a part of their business? Can I simply book the cost of the item sold at Retail as a Cost of Goods Sold? I am also assuming that I'm allowed to book the samples purchased as an ordinary expense of the business, and do not need to include that in inventory. Please let me know if I am off base.


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PostPosted: Fri Nov 18, 2005 7:50 pm 
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Joined: Fri Nov 04, 2005 3:46 pm
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I would book the 60% as advertising exp, the 20% as materials, supplies or maybe even office exp, depending on what they are, (though in the end, it really doesn't what you call them). The personal stuff is non-deductible(this doesn't sound like a corp., otherwise it would be a draw). Also, am i correct here?--it sounds like your client only sells 5% of what she purchases? Anyway, by running the purchases through COGS, you are in fact creating inventory accts. Remember, at its most basic level, COGS = beg. inventory + purch's - ending inventory. hope this helps, good luck


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PostPosted: Sat Mar 02, 2013 2:03 am 
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If network marketing is concerned I think these tips might help you.

I am a network marketer and honestly I am a newbie in this kind of business. I engage in this kind of business because I believe I will become successful even when I do not have experience but can learn. Perseverance and right steps are the key to becoming successful. I have attended a lot of trainings and tutorials for network marketing. Even I am new for this I can suggest to you steps on how to become successful in this business.

First, let your prospects talk about their lives. Allow your prospects to tell you what the status of their lives is. From that, you can learn their background and details for which you can have the idea on how to make them comfortable with you.

Second, implement FORM. Start talking to your prospects about their family, occupation, recreation, and then the message.

Third, present your business marketing plan clearly. You have to be confident in presenting your business so that your prospects believe in you. Speak clearly so they are able to understand you.

Last, follow up. The excitement level of your prospects will last for only 48 hours. Within that period you should have to talk again with your prospects and consult with them on what their decision is.

These are the steps I can suggest to you for this moment. I hope that you get an idea about my experience in network marketing.


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PostPosted: Sat Mar 02, 2013 5:27 pm 
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Joined: Fri Sep 23, 2005 4:43 am
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Location: Wichita Falls, Texas
Kimberly,

This is an accounting/bookkeeping forum. The originator of this thread had specific questions in regards to bookkeeping, not network marketing.

Quote:
My question is, do I need to bother using an inventory account since inventory is not generally maintainted as a part of their business? Can I simply book the cost of the item sold at Retail as a Cost of Goods Sold? I am also assuming that I'm allowed to book the samples purchased as an ordinary expense of the business, and do not need to include that in inventory. Please let me know if I am off base.


This specific forum is about asking accounting and bookkeeping questions. If you are going to post in this specific forum, will you please address the specific questions being asked, or ask your own questions/comments regarding accounting/bookkeeping? We get spam out the ears daily. This may have been innocent, so I am just trying to caution you against violating the forum guidelines.


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