Network Marketing
Network marketing or multilevel
marketing(MLM) is a business model that depends
on person-to-person
sales by independent representatives, often working from home. The profession
appeals to many people because they can be their own boss, set their own hours,
and work towards their own success.
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| Network marketing |
Network marketing is
known by a variety of names, including multi level marketing(MLM), direct
selling, cellular marketing, affiliate marketing, consumer-direct
marketing, referral marketing, or home-based business franchising.
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| Network marketing efforts |
The economic
slowdown of India plays a crucial role that more and more entrepreneurs are
thinking out of the box to opt for a profitable business platform-“Network
Marketing or MLM” business.
Network marketing in India
People in India are
concerned about making money conveniently and simply, and the same is the major
highlight of the network marketing business. People are very smart that they
analyze the history, statistics report, or growth of network marketing business
2020 to know the past and future of the network marketing business.
The present
condition and development of network marketing business in India looks to be
cheering and assures future success in the industry in the coming years.
By comparing with
the other developing countries like USA and china, India is still standing
behind to accept the MLM business completely. The only reason for this is the
MLM scam running behind the network marketing business. The scams decline the
Indian economy, but nowadays, the precautions are taken care of to get rid of
MLM scams.
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| Scope of network marketing |
To avoid the MLM and
direct selling scams Indian Government has come with new guidelines and
regulations which must be followed by all MLM companies to eradicate many MLM
frauds.
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| MLM growth in other countries |
Network marketing is
one of the oldest and traditional businesses of selling products at
multi-levels and forming an extensive network of people to promote the business.
The direct selling
industry or MLM industry in India seems to be promising in the yielded
benefits. Yes, that is almost doubled in the year 2016 when compared with the
year 2011. From the report of ASSOCHAM, it is evident that it will touch the record
of around 159.3 billion in 2021.
The study showed
that the ranking of MLM business was increased from 22nd position to 20th
position during the year 2015 to 2016. The top three markets during those years
were the US, Korea, and China.
During the year 2015
to 2016, the sales volume attained a record of $183 billion globally. A huge
number of people started joining the MLM business. Almost around 80 percent of
the countries around the world started joining in the MLM business.
History of Direct Selling
- In 1886-MLM
business has evolved in the USA during the year 1886 with the
establishment of Avon.
- In 1925–
During this year, the direct sales volume increased to around 300 to 500
million USD.
- Between 1940 and 1960–
Many companies emerged based on the concept of multi-level marketing or
network marketing.
- In 1970-New
products are being focused on improving the MLM business. Product
categories like wellness products, household products, food items started
evolving to attract customers.
- Between 1990 and 1996-Many major MLM companies like Avon, Amway, Tupperware
extended their service globally to build massive customers for their MLM
business. They started their MLM business in India, Korea, China.
Growth of direct
selling or network marketing in india
Direct selling is likely to
reach about Rs.64500 crore in India by 2025, a FICCI-KPMG report said. Direct
selling has already emerged as a successful industry in over 100 countries,
with a market size of USD 182.8 billion.
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| Network marketing growth in India |
The Direct Selling industry in
India has almost doubled since 2011 to reach Rs 12,620 crore in 2016 and is
expected to grow at a compounded annual growth rate (CAGR) of about 4.8% to
reach Rs 15,930 crore in 2021, reveals the study undertaken by ASSOCHAM.
Benefits from Network Marketing
Additional income opportunities: Direct selling or MLM industry provides additional income opportunities or
passive income to a large number of people and promotes micro-entrepreneurship.
Currently, over 5 million direct
sellers in India are estimated to be engaged with the industry, and are
projected to grow further with the growth of the industry
Women empowerment: Direct selling
offers self-employment opportunities or work from home oppurtunities to a large
number of people, especially women. The share of women in the industry has been
around 60% on average for the last 3 years. However, a recent survey found that
more Indian men are joining this business as a way of self-employment and
entrepreneurship.
Enhanced Employment Generation: As we have
already know that it provides passive income for the marketers, it also
provides employment opportunities for a large number of people. Most of the
time MLM companies interact with various vendors to accomplish operations
like packaging and distribution.
since
the MLM companies or direct selling companies generate a huge tax to the
government. It helps in improving the Indian economy with its huge revenue.
During the year 2013, the tax generated was around INR10 billion. It also contributes
to direct and indirect tax.
Difference between legal and illegal network marketing
companies
Legal company
1. Clarifies that you need to learn new skills and work for
that atleast 7-10 hours/week for 3-5 days to
earn big money.
2. There are significant products and services that people
would buy even without participating in the business.
3. Commissions are paid mostly on the basis of sales of
products or services.
Illegal company
1. Promises quick and easy money.
2. There are no significant products and services to buy and
sell.
3. Most commissions are paid for recruiting new members,
selling training material etc.
Myths in network marketing
1. Pyramid structures are bad
The
first biggest misunderstanding people have with this type of business, is the
structure. Some brand new inexperience consultants do not know what to say
about this, and end up trying to deny it or cover it up by saying, it’s an
upside down pyramid, but here is my response.
So what? So what if it does.
Here is the important point that 95%
of people miss. All traditional business, government and nearly
every big organisation all have a pyramid structure.
The Traditional Business
In traditional business, you have the
CEO/MD at the top of the pyramid, followed by heads of department, followed by
upper management, followed by middle management, followed by lower management,
followed by supervisors, followed by new staff, followed by customers. It is a
pyramid structure.
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| Pyramid structure in an organization |
Government
Next, government. So in government you have the President/Prime Minister at the
top of the pyramid, followed by his closest advisors, followed by heads of
department, followed by chief MP’s, followed by MP’s and so on. Guess
what? It is a pyramid structure.
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| Pyramid structure in Government |
2. Only the people at
the top makes money
Another concern people have is that,
it is only the people at the top that make any money. 90% of people who join
don’t make any money. Guess what? This is true. You’re right. However let me
also reveal some very important insights to you.
This is the same in learning any
skill or industry!!!
Let me explain.
The Martial Arts Analogy
The best analogy for starting a network marketing business, is that it is very
similar to starting in and progressing in the martial arts.
Picture This: In a room of 100
people in a typical martial arts class, there will be a 1-2 black belts who are
taking the class, 3-7 brown belts helping out, quite a few more red and blue
belts, and the vast majority of people are white belts or brand new. Sound
familiar?
Building your MLM business is just
the same as wanting to become a black belt. The sad fact is that most
people quit.
Some of the best statements given by Warren buffett, Bill Gates and APJ Abdul kalam about network marketing is
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