The Multilevel Marketing (MLM) industry, also referred to as Network Marketing or Referral Marketing or Direct Selling, has seen higher growth even during the Covid-19 pandemic. When most industries struggled to sustain their operations, the Network Marketing industry stood out.
The Multilevel marketing companies provided livelihoods to millions who lost their jobs due to the economic and unemployment crisis induced by the pandemic. It showed people how to attain financial freedom and achieve entrepreneurship.
But, just like how any coin has two sides, the MLM industry has genuine and fake companies within it! This article helps you know how to choose and identify a genuine and legal MLM company from a fake and illegal one.
Direct Selling Industry – Showing the Way to Attain Financial Freedom
The Direct Selling industry came into the limelight, especially during the pandemic when it provided self-employment to millions in India. It further showed people how to become financially independent and become entrepreneurs. The industry has aligned nicely with the Indian government’s initiative of Make in India and Self-Reliant India.
Multilevel Marketing companies allow their salesforce, popularly known as Direct Sellers or Distributors or Network Marketers, to reach ultimate heights in earnings and work flexibility. Off lately, the Direct Selling industry has been supplementing the government revenues substantially. It is in line with several government initiatives like Women Empowerment, Vocal for Local and Skill India.
The government reciprocated by boosting the Direct Selling industry with several initiatives. Further, it has drafted regulations to safeguard the interests of investors who wish to join the Direct Selling companies as independent Distributors.
Multilevel Marketing (MLM) is a form of retail where independent agents build and manage their salesforce. Today many people in India earn big money and incentives from the Direct Selling profession. Collaborating with a Direct Selling company, many have become entrepreneurs.
You Need to Exercise Caution When Choosing Your MLM Company
Today several Network Marketing companies operate as MLM companies. However, not all of them incorporate the MLM business model. Many Direct Selling companies in the industry are established and proven ones. Others who have just started their operations pretend to be in the market for decades!
Therefore, it is essential for you to carefully examine the credentials and existence of the MLM company before collaborating with it. You should be aware of the products or services the company sells and how it treats its distributors. Choosing your MLM company is the most important step when entering the Network Marketing world. Therein lies the mantra to success in the MLM industry.
Features that Distinguish a Genuine Network Marketing Company from the Rest
Each individual may have different needs or expectations when planning to join a Network Marketing company. Therefore, you need carefully choose the kind of MLM company that suits you.
It would help if you were comfortable and passionate about selling the products or services of the company. It would help if you were satisfied with the compensation plan of the company. But above all, you should choose a genuine company and an established name in the market.
By choosing a company with a good and proven system, you can take full advantage of its opportunities. Choosing a genuine MLM company will pay off. So, let us go ahead now and find out the features of a genuine Network Marketing company.
Genuine MLM Companies have the Capacity to Sustain Growth.
One of the key features of a genuine Network Marketing company is its staying power. Network Marketing businesses that use reliable MLM marketing software are known to sustain growth.
You should ensure that the MLM company you wish to join has been around in the market for at least five years or more. During this period, it should showcase a list of impressive accomplishments – either in terms of the number of members in their Direct Sales network or Return on Investment (ROI) on the MLM strategies implemented.
Genuine MLM Companies are Cost-Effective and Offer Value
When a Network Marketing company incorporates affordable operations, it means that it knows ways to keep down costs. It enables it to perk up its revenue. So, cost efficiency is another ingredient of any genuine MLM business. An MLM company that does not require you to shell out a big joining fee or not expect you to invest and maintain in an inventory is a genuine Network Marketing company.
Further, any genuine MLM company will offer valuable services or unique and innovative products. It helps to generate value for consumers and distributors alike. When a company offers valuable products or services, it means it generates consistent communication and support from its prospects and customers. A genuine Network Marketing company offers value and generates a great ROI.
Genuine MLM Companies Reward Performing Distributors
A genuine MLM company is known for doling out timely payments to its Independent Distributors for the sales they execute. Genuine MLM companies also pay a residual income to their Distributors. A residual income is one that Distributors earn as a percentage of the commissions on the sales done by their downline and downline’s downline.
Top and genuine Network Marketing companies incentivize the recruiting efforts of their Independent Distributors. They encourage their Distributors to build a strong MLM network that grows into an efficient and reliable marketing network.
Genuine MLM Companies Implement Professional Work Ethics
Genuine MLM companies invest wisely in time, money and maintaining their reputation. Such companies you can always trust. A genuine Network Marketing company’s hallmark is its integrity and the professional work ethics they implement in its sales network.
A genuine Network Marketing company has transparency about itself – it will have no qualms in disclosing details about its ownership, financial condition, distributor relationships, and product or services. The mission statement of a genuine MLM company reflects the ethical standards and values they stand for.
Genuine MLM Companies are Registered with IDSA and Comply with Government Guidelines
Indian Direct Selling Association (IDSA) is an autonomous and self-regulatory body for the Direct Selling industry in India. It is an interface between the Direct Selling industry and government policy-making bodies that facilitates its cause. The criterion for IDSA membership for a Direct Selling company include:
- The company must submit a duly completed application with required documents for scrutiny.
- The company has operated in India for more than one year.
- The company and its promoters should be of integrity and have a good financial standing.
- The company should abide by the Model Code of Ethics by signing it.
- The company should submit all fees as required by the Indian Direct Selling Association.
- The company’s operating methods are fair and comply with the Model Code of Ethics.
- If a company is into trading, it should own a trademark or have exclusive selling rights.
The Indian government initiated several moves like Make in India, Women Empowerment, Vocal for Local, Startup India, and Skill India to boost the industry.
Further, to safeguard the interests of investors, the government has drafted regulations that make it mandatory for the Direct Selling companies to have a permanent address office in India. Also, it has rendered companies incorporating the pyramid business scheme illegal.
Any MLM company registered with the IDSA and complied with government guidelines and regulations can be considered genuine.
Let’s Sum Up the Characteristics of a Genuine MLM Company
When you decide to step into the Network Marketing business, you need to collaborate with a genuine company to avoid repenting your decision. You need to research the company well before you join hands with it.
Once you join your Network Marketing company, you will be investing your time, money, and reputation in it. When shortlisting your Direct Selling company, you can become interested in several Network Marketing companies depending upon the opportunities they offer.
We have discussed above how you can identify if a company is genuine or not. Let us summarize what you need to take care of when finalizing your company and ensuring that it is genuine. Foremost, the company needs to have integrity and honesty. It should have complete transparency in disclosing its ownership, financial condition and distributor relationships. Then it needs to have a mission statement, and it should follow ethical ways.
The company should offer products that have been tested for reliability and marketability. Its marketing system should be a simple duplicatable one that people from all orientations can follow. The company’s compensation plan should be a fair one that all can easily understand.
The company should support its distributors with excellent training, marketing materials, and conference calls. It should have, and an experienced management team. And finally, it should be using the latest technology to recruit, train, sell and manage the entire sales network.
Conclusion: Joining a Genuine MLM Company is always Wise Decision
When you start any business venture, it comes with taking financial risks. When you start any business, you risk losing your savings.
However, when you decide to join a Network Marketing company, you risk a negligible financial risk. The joining or registration fee you pay to the MLM company covers free training, sample products, and other printed materials and brochures.
And the benefits you derive from your Network Marketing business can be mind-boggling. But bear in mind, Direct Selling is no magic – it is not a get-rich-quick scheme. It would help if you chose and partnered with a genuine MLM company. And it would help if you worked hard and put in smart online and offline marketing efforts. Network Marketing has evolved. It is touted as the future of business in the 21st century. Earlier thought of as a part-time activity or a means to earn a second income, Direct Selling is today a career option that has been recently introduced in academics.
