Tell something new , Diversion was set up after the 1977 Federal Trade Act was passed Through the Congress. It means quite simply if you buy any product from a Manufacturer, Distributorship, you can resell the product, you own the product and that’s that! IT IS YOUR PROPERTY. You bought it You OWN IT! Manufacturers set up contracts for the salon community to keep it in the salon. If the salon owner signs the contract, and sells it to a third-party, it is Diversion. Only to be DEFINED IN THE LANGUAGE OF THE SIGNED CONTRACT. So that is how manufacturers gave birth to DIVERSION. To have an individual sign a contract and having the recipient not know about the Federal Trade Rights they sign them away. You sign the contract you give them up, (Federal Trade Rights of 1977). This is used as a camouflage for the Manufacturers, and also Distributors to sell to Diverters for them, sell what? THERE PRODUCTS. So since they now have an avenue to sell their products they will blame the diversion on the Salon Owner. Since you signed a CONTRACT! If you want to go into a beauty supply center and buy Matrix, Sebastian, Big Sexy Hair, etc and set up a website on the internet and sell these products. YOU CAN. It is not against the law, and when the manufacturers say it is, IT ISNT. When you sign a contract with a distributorship, from the Manufacturer and then you sell it on the internet, flea market, to a grocery store. That is when you broke the SIGNED CONTRACT with the parties involved on the contract. THEN IT’S DIVERSION, and they will fine you, stop supplying you, and that is that. YOU SIGNED THE CONTRACT. Dont sign contracts.
A lot of manufacturers will find internet sites selling their product, and place law suits against them. And they will not win in court basically because the company who bought the product and is delivering them to the consumer, purchased them through a third-party. NOT AGAINST THE LAW AT ALL! So when a salon owner sell products outside their establishment and the manufacturers find out. THEY ARE SCREWED, Because they signed a contract. So then the manufacture will set up an investigation and stop selling to Little Suzy or Johnny, which will give them a kicking post in the salon community and blame the salon community for the Diversion. Mean while they will set up third-party connections, and ghost distributorships to sell their wares, (Products) to get it out to the commercial sector! And say “YOU THE SALON COMMUNITY HAVE SOLD IT!” You have just created camouflaged for them.
SIMPLE AS THAT!