Long story short, they are raising capital from the public in the guise of being an “investor” by offering an opportunity to be paid dividends.

This is sort of selling shares to the public without the paperwork and regulations by placing it under an agency model.

The company is shifting the risk of holding inventory to you and lowering their overheads. It can also be considered as the company taking a high interest loan from you so that they have inventory to sell but you don’t have recourse if the company unable to pay you interest.