WHAT IS DIRECT SELLING ?
The sale of a consumer product or service through personal contact, away from a fixed retail location or shop. Worldwide, the number of direct sellers is growing at 220,000 per week.
MLM - a definition Multilevel marketing allows sellers to build a business through their own sales efforts and by inviting others to become sellers. Remuneration is based on a seller's personal sales AND on the combined sales of those people they have sponsored, trained and motivated. Benefits to customers This form of marketing goods or services directly to consumers takes place: at the customer's convenience often in his/her home either on a one-to-one basis, or in the context of a sales party. Customers value the advantages of: convenience personalised attention a good selection of products ability to examine the products for a period of time protected by a customer refund policy.Benefits to sellers Many of these people have chosen direct selling because they want to own their own business, but do not have : considerable funds required to buy a franchise or start a new company training time education Among the top five reasons people sell direct are that they: like and believe in the product like being their own boss, and working their own hours like the supplemental family income or like making extra money for themselves feel that the harder they work, the more money they can make enjoy selling and meeting people. Benefits to companies In today's world of rapid change, direct selling offers companies: a direct distribution channel that can be accessed immediately bypassing rigid and costly traditional distribution channels.
The following factors differentiate illegal pyramids from lawful direct selling business:
Legitimate Direct Sellers
Pyramid Selling
Legitimate direct selling companies offer a genuine business opportunity based on consumers. They routinely offer consumers satisfaction guarantees or cancellation rights so that the consumer may return the product for replacement or refund if he/she is dissatisfied.
Legitimate direct selling companies strongly discourage overstocking of inventory and provide participants leaving the plan with an opportunity to return any unused, saleable merchandise to the company for a refund of not less than 90% of the salesperson’s net cost.
Legitimate direct selling opportunities may be taken up with minimal start up costs and little or no inventory investment. Even modest entry fees may be refundable if the new direct seller decides not to pursue the opportunity.
The sales and marketing plans of credible direct selling companies are based on the progressive recognition and reward of direct sellers for consumption of the company’s products. The development and stability of a direct seller’s business is dependent on satisfied consumers and fairly remunerated direct selling members.
Every salesperson subscribes to the industry code of ethics.
Pyramid schemes have no such commercially viable product sales base.
In contrast, pyramid schemes often encourage or require large stock of non-refundable inventory and disappointed scheme participants are then left with stock which they can neither sell nor return.
Conversely, pyramid selling schemes often require high entry fees and/or substantial “investment” in inventory, and neither are refundable. This is because pyramid operators make their money from new recruits to fund their schemes.
Pyramid schemes on the other hand, offer ‘get rich quick’ schemes to induce participants to buy “ground-floor” or “leadership” positions. In pyramid selling schemes there is no viable, long-term business opportunity.
No code of ethics exits.
Saturday, January 31, 2009
Multi Level Marketing
What is Multi-Level-Marketing or MLM?
Multilevel marketing is a form of direct marketing where the wholesale and distribution of a product are done by participants in the same marketing plan. The participants in the plan in turn earn their money by recruiting additional participants and supplying the same products to those participants (Canada Competition Bureau, 2003, par. 4). Because firms pay very little to market the product until after a participating distributor has already sold the product, this form of marketing requires relatively little overhead investment for marketing costs, and has proven to be a very effective method of rapid market penetration.
Multilevel marketing originated in the United States in the early 1940s with the introduction of a nutritional supplement company called Nutrilite. The practice of commissions and referral matrices quickly helped Nutrilite products to become successful in the national marketplace, reaching monthly sales revenues of more than US$500,000. Despite such successful sales, problems within their manufacturing and marketing infrastructure significantly hindered the company’s performance (Acidics, 2003, par. 3-6). In 1959 two of Nutrilite’s top distributors, Rich DeVos and Jay Van, established their own multilevel company, the American Way Association, later named Amway. Often referred to as “direct sales” (Amway, 2003, par. 7), Amway’s model has since been imitated by thousands of companies worldwide, with varying results. Today, approximately 34 million people are engaged in Amway-type direct selling worldwide. The industry has grown into an estimated US$82 billion (Amway, 2003, par. 7).
Multilevel Marketing Perspective
MLM payout and recruitment structures have often been associated with pyramid schemes. A pyramid scheme is an investment scam, “in which the money from later investors is used to pay earlier investors” (Investorwords.com, 2003, p. 1). These scams inevitably collapse due to the exponential increase of investors necessary for each stage of growth.
Although an age-old scheme, this concept was brought to the attention of the American public in the summer of 1920 with the introduction of the “Ponzi Scheme” (Knutson, 1996). Charles Ponzi, an Italian immigrant, recognized that countries whose monetary value was damaged because of World War I had issued postal coupons that could be redeemed in the United States for a much higher value. Charles Ponzi promised a 50% return on investments in only 45 days and investments flooded in. Stamp exchange regulations quickly changed in late summer of 1920, and many investors demanded an instant return on their investments. Charles Ponzi used the money of other investors, without interest, to pay the dividends on earlier investors. On July 24, 1920, Ponzi’s scheme collapsed, he was arrested, his partners were ruined and investors were swindled (Knutson, 1996, par. 59). For this and a number of other reasons, the public perspective of MLM companies has generally been negative (Direct Selling Association, 1997, p. )
It is true that many MLM companies offer commissions and rewards for successful recruiting of additional distributors. This does not, however, indicate that an MLM is necessarily a pyramid scheme. Legitimate MLM companies will provide commission on sales and provide distributors with the opportunity to sell products and receive retail profits.
Most of the MLM companies in India follows the pyramid selling schemes. There is no repurchase. One distributor has to recruit new joining to get his incentive paid. Friends, if you are patriotic MLM leaders, prefer to work in a company which have Direct Selling Association membership. In all the other companies distributors are not cared at all. 99% of the registered MLM companies in India offer commissions and rewards for recruiting of additional distributors. This doesn’t indicate that an MLM is necessarily a pyramid scheme. Legitimate MLM companies will provide commission on sales and provide distributors with the opportunity to sell products and receive retail profits. The FTC(Federal Trade Commission) advises that multi-level marketing organizations with greater incentives for recruitment than product sales are to be viewed skeptically. So Friends, Avoid a company offers income only through new recuits. Avoid a company which doesn’t have any GOOD HISTORY.Avoid a company which doesn't have any legitimate licence or TRADE MARK. Aoid a company which is distributing goods which have no worth for the price you are paying. Aoid a company which have pillors with criminal background.
Dear New job seekers, This is the best way to make your future brighter. No need to bother about the targets, no need to suffer any more torturing of your bosses. Nothing to get loss. You can work with proud. Nobody is there to rule you. Create your own team and setup yourown business. First time in the history of India a company having a TRADE MARK and international reputaion has entered in MLM. There is a chance to earn upto 7.5 lakhs from a single business point without any investment. The first joinging is the best joining. Contact me at 9964631836 Hurry up.
Multilevel marketing is a form of direct marketing where the wholesale and distribution of a product are done by participants in the same marketing plan. The participants in the plan in turn earn their money by recruiting additional participants and supplying the same products to those participants (Canada Competition Bureau, 2003, par. 4). Because firms pay very little to market the product until after a participating distributor has already sold the product, this form of marketing requires relatively little overhead investment for marketing costs, and has proven to be a very effective method of rapid market penetration.
Multilevel marketing originated in the United States in the early 1940s with the introduction of a nutritional supplement company called Nutrilite. The practice of commissions and referral matrices quickly helped Nutrilite products to become successful in the national marketplace, reaching monthly sales revenues of more than US$500,000. Despite such successful sales, problems within their manufacturing and marketing infrastructure significantly hindered the company’s performance (Acidics, 2003, par. 3-6). In 1959 two of Nutrilite’s top distributors, Rich DeVos and Jay Van, established their own multilevel company, the American Way Association, later named Amway. Often referred to as “direct sales” (Amway, 2003, par. 7), Amway’s model has since been imitated by thousands of companies worldwide, with varying results. Today, approximately 34 million people are engaged in Amway-type direct selling worldwide. The industry has grown into an estimated US$82 billion (Amway, 2003, par. 7).
Multilevel Marketing Perspective
MLM payout and recruitment structures have often been associated with pyramid schemes. A pyramid scheme is an investment scam, “in which the money from later investors is used to pay earlier investors” (Investorwords.com, 2003, p. 1). These scams inevitably collapse due to the exponential increase of investors necessary for each stage of growth.
Although an age-old scheme, this concept was brought to the attention of the American public in the summer of 1920 with the introduction of the “Ponzi Scheme” (Knutson, 1996). Charles Ponzi, an Italian immigrant, recognized that countries whose monetary value was damaged because of World War I had issued postal coupons that could be redeemed in the United States for a much higher value. Charles Ponzi promised a 50% return on investments in only 45 days and investments flooded in. Stamp exchange regulations quickly changed in late summer of 1920, and many investors demanded an instant return on their investments. Charles Ponzi used the money of other investors, without interest, to pay the dividends on earlier investors. On July 24, 1920, Ponzi’s scheme collapsed, he was arrested, his partners were ruined and investors were swindled (Knutson, 1996, par. 59). For this and a number of other reasons, the public perspective of MLM companies has generally been negative (Direct Selling Association, 1997, p. )
It is true that many MLM companies offer commissions and rewards for successful recruiting of additional distributors. This does not, however, indicate that an MLM is necessarily a pyramid scheme. Legitimate MLM companies will provide commission on sales and provide distributors with the opportunity to sell products and receive retail profits.
Most of the MLM companies in India follows the pyramid selling schemes. There is no repurchase. One distributor has to recruit new joining to get his incentive paid. Friends, if you are patriotic MLM leaders, prefer to work in a company which have Direct Selling Association membership. In all the other companies distributors are not cared at all. 99% of the registered MLM companies in India offer commissions and rewards for recruiting of additional distributors. This doesn’t indicate that an MLM is necessarily a pyramid scheme. Legitimate MLM companies will provide commission on sales and provide distributors with the opportunity to sell products and receive retail profits. The FTC(Federal Trade Commission) advises that multi-level marketing organizations with greater incentives for recruitment than product sales are to be viewed skeptically. So Friends, Avoid a company offers income only through new recuits. Avoid a company which doesn’t have any GOOD HISTORY.Avoid a company which doesn't have any legitimate licence or TRADE MARK. Aoid a company which is distributing goods which have no worth for the price you are paying. Aoid a company which have pillors with criminal background.
Dear New job seekers, This is the best way to make your future brighter. No need to bother about the targets, no need to suffer any more torturing of your bosses. Nothing to get loss. You can work with proud. Nobody is there to rule you. Create your own team and setup yourown business. First time in the history of India a company having a TRADE MARK and international reputaion has entered in MLM. There is a chance to earn upto 7.5 lakhs from a single business point without any investment. The first joinging is the best joining. Contact me at 9964631836 Hurry up.
BIK-MAARK INTERNATIONAL MARKETING PVT.LTD.
Bik-maark is creating records in Indian Direct Selling Marketing.
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