Resell Circle and the FTC: Why Our “Business-in-a-Box” Model Is Built to Last

Whenever a new subscription-based income model takes off, the natural question arises: is this a real business, or just another pyramid scheme? That concern is understandable, especially given the Federal Trade Commission’s (FTC) history of cracking down on companies that blurred the line into recruitment-driven pay-to-play. At Resell Circle, we embrace that scrutiny—because our structure was built from day one to stay on the right side of the law.

The FTC’s Concerns in This Space

The FTC’s mission is to protect consumers from deceptive or unfair practices. For affiliate and subscription businesses, regulators focus on three main areas:

Pyramid schemes — Illegal models where rewards are based primarily on recruiting others, not on real product or service sales. FTC guidance on MLMs makes this clear.

Earnings claims — Marketing must be truthful, typical, and backed by real data. The FTC has repeatedly warned companies about deceptive “get rich quick” claims (FTC Endorsement Guides).

Subscriptions and recurring billing — The FTC’s new Negative Option Rule (2024)
 requires clear terms, affirmative consent, and simple “click-to-cancel.”

Lessons From FTC Enforcement Cases

History shows what happens when companies get this wrong:

BurnLounge (2014): Marketed “music stores” but revenue came mainly from selling more stores, not music. The Ninth Circuit declared it a pyramid scheme (FTC press release).

Vemma (2015): Shut down when affiliates had to buy autoship packs to qualify for commissions (FTC action).

Herbalife (2016): Paid $200 million and restructured to base rewards on real retail sales (FTC settlement).

AdvoCare (2019): Ordered to pay $150 million and banned from MLM for operating a pyramid scheme disguised as direct sales (FTC case).

The common thread: when rewards are tied mainly to recruiting instead of consumer value, the FTC steps in.

How Resell Circle Is Different

Resell Circle avoids those traps by offering real value for both affiliates and customers.

Free Entry (Bronze Membership)
Anyone can join for free and start promoting digital products immediately. This eliminates the “pay-to-play” model that got BurnLounge and Vemma in trouble.

Platinum Subscription ($27/month)
Platinum unlocks a subscription business-in-a-box: a hosted store/profile, resale rights products, landing pages, link-in-bio tools, community training, and free monthly eBooks. These are resources digital entrepreneurs would pay for even without the affiliate side, proving stand-alone value.

Unlocking Subscription Commissions
Only Platinum members can earn recurring commissions on subscriptions. The logic is simple: Platinum members are reselling the very tools they use. Free affiliates still earn on product sales, but subscription payouts are reserved for those who subscribe.

Performance-Based Rewards
Commission tiers are tied to volume:

Up to 10 subscribers → 40% ($10.80 per subscriber)

11–25 subscribers → 50% ($13.50 per subscriber)

26+ subscribers → 60% ($16.20 per subscriber)

This is standard performance-based pay, not recruitment bonuses.

Proof of Product Usage
Members actively use the platform: creating link trees, running landing pages, giving away free eBooks, and hosting digital products. This shows consumer demand and usage, not just passive buy-ins.

Truthful Marketing Practices
We avoid hype. When we show examples, they are framed as math-based hypotheticals (“If you had 10 subscribers at $27, you’d earn $108/month”) with disclaimers. Affiliates must disclose they earn commissions, and no fake reviews are tolerated.

Why the Model Holds Up

It’s true: some members will join Platinum only for the chance at recurring income. That happens in every affiliate program. The difference is that Platinum delivers tangible, independent value—tools, products, training, and community—that justify its price even if a subscriber never recruits.

That’s what separates Resell Circle from schemes like BurnLounge. We provide resources entrepreneurs already need, not hollow “stores” nobody uses.

Looking Ahead

The FTC is finalizing a new Earnings Claim Rule to tighten standards further. Resell Circle is monitoring this closely and will continue updating policies to stay ahead of compliance requirements.

Conclusion

Resell Circle is not a pyramid scheme—it is a subscription-powered, value-first business model. With free entry, real tools, transparent commissions, and honest marketing, we provide entrepreneurs a legitimate way to build recurring income while complying with FTC regulations.

Our mission is simple: to be the gold standard for transparency and fairness in the digital resale industry.