Over the past few years, the Direct Selling companies suddenly shot into the limelight for providing jobs to millions of people who lost their jobs due to the economic crisis induced by the Covid-19 pandemic. There are several reasons why people join the Direct Sales Industry – some join to earn a second income, some join in socializing, while others join purely to earn a livelihood. But there has always been a controversy surrounding the Direct Selling companies, interchangeably called Network Marketing or Multilevel Marketing companies.
In the past, frauds were committed by several companies disguising themselves as MLM companies but instead implemented the illegal Pyramid business model and vanished in no time after duping many people. It gave a bad name to the Direct Selling Industry. The recent draft norms by the government to regulate the Direct Selling Industry are a step in the right direction and will protect Direct Sellers’ interests.
Direct Selling – A Means to Own Your Business
If you are planning to start any traditional small business, it usually involves a workforce, infrastructure, and an investment that could even cost a small fortune. Contrary to a traditional business, Direct Selling is equivalent to starting your own small business wherein the company you collaborate with provides you with an opportunity to represent its product or service. The company further gives complete support, relevant tools, and training material. Being a Direct Seller now allows you to earn – by selling products of the company, by recruiting more people to increase the company’s salesforce – called your downline, and as a commission on the sales done by your downline – called residual income. Starting a Direct Selling business involves negligible investment costs, and you can own your business right away!
Government Initiatives – A Boost to the Direct Selling Industry
The Direct Selling Industry is flourishing rapidly in India. Currently ranked at number 15 globally, the Direct Selling sector is expected to employ more than 18 million by 2025. Further, its growth rate is expected to be steady at a Compounded Annual Growth Rate (CAGR) of 4.8 percent.
Having the potential to be a thriving market, India can possibly become an investment destination for Direct Selling Companies. The Indian government has begun unveiling proactive industry-friendly initiatives like Make in India, Skill India, Women Empowerment, and Startup India. All these initiatives have boosted to a large extent.
Government Norms to Protect Interests of Direct Sellers
The guidelines issued by the Department of Consumer Affairs helped the industry to a great extent. However, there were many issues of the industry that remained to be resolved. The government has now stepped in to address them. As per reports in several leading Indian news websites, Direct Selling companies will now have to comply with its regulatory norms that makes it mandatory for them to register. It will go a long way in protecting the interests of those individuals who wish to step into the world of Multilevel Marketing and pursue their dreams of attaining financial freedom!
For the first time, the Indian Consumer Affairs Ministry has issued draft rules for the mandatory registration of Direct Selling Companies along with a proposal to have a mechanism in place to protect Directs Sellers, also known as Sales Representatives or Independent Representatives, and make the companies accountable towards end-users or consumers. Further, according to the rules, every Direct Selling Company registered must have at least one office in India and are barred from charging any entry or registration fee from Sales Representatives who collaborate with them. The proposed rules strictly prohibit Direct Selling Companies from incorporating the Pyramid Scheme or the Money Circulation Scheme in the guise of a Direct Selling Business.
Initiatives for Direct Selling Industry & Rules to Safeguard Direct Sellers Augurs Well
The Direct Selling companies were the dark horses during the economic recession induced by the deadly Covid-19 pandemic and were able to grow steadily. The Direct Selling Industry was able to provide livelihoods to millions who struggled during the testing times. With the Indian Government taking initiatives to boost the sector and stepping in with rules & regulations to safeguard the interests of the Direct Sellers associated with the Direct Selling companies, it is indeed a progressive and reassuring measure. It augurs well for the industry. If you plan to be self-reliant and wish to attain financial freedom, it is time to step in with confidence – Make an informed decision and choose your Direct Selling company wisely. Wish you all the best.
