Recently your friend might have called you and said. Hey you know what, My dear, you have a
wonderful business opportunity, you can just sit at home and earn a lot of money with 0% investment and a few friends might have contacted their senior who is in top of them in the pyramid and that guy might have explained you about the business how you can earn lakhs of money within months using the ppt. He might have shown you all the stats of the company and the life stories of many peoples who earned money through Multi-level marketing. Have you ever wondered what is the benefit your friend derives by recruiting you to the company? It is their duty, that is their work to get back their investment. Your friends might have said you only about the positive aspects of the company because if they say about the negative aspects of the company you might get de-motivated from joining the company and earning commission from their perspective.
If you have to learn the business model of MLM first you must learn what is Pyramid Scheme?. A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. 1. In a legitimate MLM company, commissions are earned only on the sales of the company’s products or services.2. If participants are paid primarily from money received from new recruits then the company is an illegal pyramid scheme.3. There should be a buy-back option of the unsold inventory i.e; if you failed to sell the product in the market the company should buy-back a certain percentage of goods at a fixed price. Now just cross verify with the MLM firm which you're enrolled whether it satisfies these three conditions. I guess most of the firms which you're employed in focuses on distributing the money as commission to the levels of the pyramid rather than commission earned by selling the product. Few team leaders and distributors are getting rich at the top of the pyramid at the expense of the new recruits. You should look at some of the MLM firms in a skeptical way, you should research the company thoroughly about the vision, missions, and the legitimacy of the company before investing in any MLM firms.
Now you might ask, how did the company profits from this model. They get the profit by selling the product packages.MLM\Network Marketing in a way ruins the relationship among the families and friends where they see their families and friends as potential customers and market to sell their products. All the MLM firms target a specific set of population to sell their products. In India, it is targeting the middle-income college students, they are the ones who're looking for part-time jobs to meet their needs. In USA the case is different the marketing king Amway targets the house-wife where they can earn from home.
Money chain is an illegal business but if you add a product to it, it is a legal business that is what few MLM firms do not all they try to earn money by adding more and more people to the chain. If one person fails there is a chance for the whole system to collapse. Let me try to explain you with a simple example it more or less works like your WhatsApp status when you put a meme status say,100 people watched your meme but 4 people liked your status then that 4 people will screenshot and post it as their status now it is 400 views(4*100) and 16(4*4)people will share your post and this process will continue.(note:Sonthama yosithe example nalla eruka?).
The conventional way of selling the product has to go through the channels of distribution before reaching your hands and it is a hectic job for the manufacturers to attract the customers by marketing, find clients, trade partners and whatever it is, these processes add to the overall cost of the product now manufacturers thought for a moment what if we eliminate all these channels and sell the product directly so that we can cut the cost of the product that is why you see most of the products which you get in MLM is not from a renowned brand.note: MLM is also called direct marketing.
In 2015 the RBI has warned the people about the unscrupulous activity and asked the people to be cautious. Check the post by pressing the link,click here Now I conclude by saying one thing before you invest in any business it is important for you to know how that business works just don't blindly believe your friend's words unlike any other generations before you have the access to technology, you have the world full of information. Be wise, Be Smart invest wisely.
Don't escape, One minute please share this post in the same way how MLM works if you understood my example and let many people be aware of it, and let them know how this business works so that you can save their money. Bye, bye see you in the next post till then signing off Vishnu M.
#Share Maximum
References:
1.Prabandhan & Taqniki, Management Research Journal, Vol. 5, No. 4, pp. 97-103, 2014
2.Amit Khare&Dr. Priyanka Verma-Impact of Multi-Level Marketing on different aspects of its Distributors satisfaction in selected regions of Madhya Pradesh, IJRP's ISSN 2551-1571
Post a Comment