Should a referral distribution program start with SaaS or custom development?
Review whether the distribution and compensation rules are lawful before choosing SaaS or custom software; technology cannot rescue an unlawful reward structure. If income depends primarily on recruiting people, paying an entry fee, or multi-level team compensation, the presence of a “three-tier distribution” feature does not make it safe. Wavesteam requires compliance review of participation, commission source, claims, and refunds, then tests unit economics with real product transactions.
Map one order as a ledger from customer payment through final refund: product revenue, platform fee, promoter commission, tax, payment fee, and refund owner; when referral starts and ends; and how self-purchase, return, cross-channel order, and related accounts work. Without this, configuration or code simply hardens ambiguity and creates reconciliation disputes.
When comparing platform capabilities, constraints, and switching costs, also compare When is custom development justified instead of an existing SaaS product? and How different are the app and mini-program versions of the same product?; the linked guidance adds context that should be considered in the same decision.
| Current situation | Better starting point | Why | Evidence to customize |
|---|---|---|---|
| Standard product, single-level referral, unproven rule | SaaS after compliance review | Tests real conversion and refund quickly | Core rule or data remains restricted after value is proven |
| SaaS fits except ERP/CRM or analytics | SaaS plus official interfaces | Keeps mature transaction service and connects master data | Limits or definitions break a critical loop |
| Stable multi-entity settlement, offline fulfilment, special commission | Compare modules and custom work | Difference lies in settlement and audit | Real orders show value exceeds lifecycle TCO |
| Recruitment, entry fee, or team-level income | Pause implementation | The business model itself is at risk | Professional review produces an implementable rule |
China's Regulations on Prohibition of Pyramid Selling describe compensation based on recruited headcount, payment or product purchase for participation rights, and upstream rewards based on downstream performance. SAMR's public direct-selling supervision opinion also addresses recruitment conditions, compensation, team rewards, and misleading promotion. Counsel must apply these sources to the actual money and operating facts.
Test SaaS through registration, relationship binding, order, payment, shipment, cancellation, partial and full refund, commission hold, settlement, invoice, and appeal. Check relationship hijacking, automatic refund reversal, exportable recalculation, and audited admin adjustments. A menu item labelled distribution proves none of these.
Also verify developer and entity ownership, export, API and webhook, limits, privacy roles, settlement entity, renewal, and exit. The observation period follows the fulfilment and repeat-purchase cycle rather than a universal six or twelve months.
Custom work is justified by stable, proven differences such as combined store and online fulfilment, multi-line settlement, complex master data, or a required event trail into the client's warehouse. It is not a way around SaaS compliance, store review, or payment rules. Compare cost per valid order, reconciliation labor, error loss, SaaS TCO, and custom engineering and operations rather than a GMV threshold.
Wavesteam classifies each gap as legally unresolved, SaaS-configurable, integration, or genuine development. Custom design uses traceable order, referral, commission ledger, settlement, and refund events with dual approval for adjustments, anti-abuse, holds, appeals, and minimized data. Success is measured by genuinely new customers, fulfilled orders, margin after refunds, referral cost, disputes, and reconciliation time. Stop or change the rule when margin cannot cover commission, tools, support, and fraud loss.