On September 10th 2016, when the Central Govt declared a proper Legal guidelines for the Direct Selling/Network Marketing industry, India has given birth to a new era for the free enterprise model. Let me thank the leaders and the industry bodies like IDSA, FICCI, FDSA etc who have been fighting for this for the past 5 years.
Kerala had witnessed the worst for not having a proper guideline and regulation for the industry. As there were no proper guidelines or regulations, many fast money schemes came up claiming that they were all doing Network Marketing business. Govt authorities found it difficult to differentiate good companies from the fast money pyramid schemes and hence the severe actions, which affected the genuine companies and people who were doing genuine business. Police actions in 2011 and 2012 against the companies and people who were involved in this industry had affected the livelihood of lakhs of people in the state.
Now with these guidelines people can engage in this business with pride. However, the question still remains: how will I select the right company? Especially, with this new development many new companies will come up. Hence it becomes important to know how to select the right company. Though I am still part of this industry, I am not biased to any companies. I got into Direct Selling in 1998 with one of the world’s largest Direct Selling companies. I and my wife Bindu had put our blood, sweat and tears for 13 years with the same company. Though we were earning good income, we resigned from this company on Nov 3, 2011 just because we never wanted to do anything in our life against our consciousness. We were concerned about the income our team members were making; we found it tough to keep on giving hope about a business in which we had lost our conviction. However, we realized that its not easy to take such decisions as people come into business listening to our words and the hope we give about the future of the company, and it becomes tough for them when we give a different in formation about the company. This happens because in this industry, the relation with the company becomes almost like devotion and worship rather than just business. It is time to be more professional in this business. Companies stand to do business and distributors also stand to do business. When it comes to business, all are looking for the best return on their investment; whether it is money, time or energy.
Considering all these, the most important thing is to be associated with the right company. I look at 3 Ps when it comes to identifying the right company:
The most important factor in such a business model is the Promoters; their back ground, philosophy, values etc. The Promoters/Founders of the company should have excellent professional management background; they should be highly qualified and experienced. Experience in creating a network is not enough for managing a company. That’s why many companies started by Network Leaders have failed.
Beauty of Network Marketing is its power to generate residual income. This will happen only if the products, which are sold through the network are Fast Moving Consumer Goods. Products can have a premium pricing or economic pricing. However if the pricing is premium, it should be targeted for upper class consumers. But in this industry, many companies having premium products target the lower and lower middle class as they are more vulnerable. As a result the market get spoiled
Lot of people decide on the company based on the compensation plan. Please note that Plan in not at all more important than the promoters background and products. If the pricing is genuine and quality is good, there is a limit to which a company can pay. If some company is offering fancy percentages as commission, its better not to believe. Genuine companies offer 30 to 45% of their sales realization (at distributor price) in various forms of commissions. Anything beyond 45% is absolutely impossible.
A person who associates with a Direct Selling company should know that he is becoming the ambassador for the company. People see the company through him/her. Hence it becomes so important to associate with the right company.