There is a flood of direct marketing companies now a days. It is common to bump into strangers who try to start a conversation with a friendly face and catchy question "interested in starting your own business?". Whether it is walmart or you are in a train, people are now tired of this new breed of overly-friendly strangers!
If you have an aptitude for selling, being a distributor for a direct selling company "may" be a great way to make some money. Amway(Quixtar), Avon, Tupperware, Modicare, Herbalife and Oriflame are some well-known names in this business. But you must also be cautious. There are many who have lost big money being part of fraudulent direct selling companies. Typically, these operate as pyramid schemes, where people profit from the payments of others who might join the network later. Such schemes inevitably collapse when no new distributor can be recruited. And when a plan collapses, most people - except those at the very top of the pyramid - lose their money.
How do you recognise pyramiding from legitimate direct selling? According to the Indian Direct Selling Association (IDSA), there are three fundamentals to a legitimate direct selling business.
These are:
Low entry barrier: When distributors sign up, sales kits are sold at cost. There is no other investment required and distributors are not forced to buy training material or sales aids. This is because companies should not be dependent on selling the business opportunity alone, nor should they resort to merely selling sales aids at exorbitant prices while awarding commissions.
No inventory loading: Direct sellers make money by simply booking orders, not committing to a substantial investment that may cause financial distress to the distributor subsequently. You should be able to buy, say, a single sachet of shampoo, if you think that's all you will be able to sell.
Low exit barrier: Protection is given to distributors who may want to get out of the business.
Check these fundamentals out before you sign up for a distributorship. Or you could lose money. And yes, don't give your friends the feeling you are meeting them only to push your products. Or you could lose your social bonds.
But seems recently many of these companies have come up with some sleazy product line up, just to get thru the legal barriers to become legitimate and prove they are not a pyramid scheme. The main income still remains from joining more people in your network and products are just for name sake! So before you join one of these, do a thorough research, analyze their products and be willing to do a lot of hard work in the initial stages. I was with Amway (2004-06) for almost two years, may be I will write in detail about it later.
Read more here:
Article on direct selling in India:
http://timesofindia.indiatimes.com/articleshow/700194.cms
Reviews on direct selling company QuestNet:
http://www.mouthshut.com/product-reviews/Quest.net-925052721.html
Reviews on Amway, supposedly called the global leader in this type of business:
http://www.mouthshut.com/product-reviews/Amway-925071625.html
If you have an aptitude for selling, being a distributor for a direct selling company "may" be a great way to make some money. Amway(Quixtar), Avon, Tupperware, Modicare, Herbalife and Oriflame are some well-known names in this business. But you must also be cautious. There are many who have lost big money being part of fraudulent direct selling companies. Typically, these operate as pyramid schemes, where people profit from the payments of others who might join the network later. Such schemes inevitably collapse when no new distributor can be recruited. And when a plan collapses, most people - except those at the very top of the pyramid - lose their money.
How do you recognise pyramiding from legitimate direct selling? According to the Indian Direct Selling Association (IDSA), there are three fundamentals to a legitimate direct selling business.
These are:
Low entry barrier: When distributors sign up, sales kits are sold at cost. There is no other investment required and distributors are not forced to buy training material or sales aids. This is because companies should not be dependent on selling the business opportunity alone, nor should they resort to merely selling sales aids at exorbitant prices while awarding commissions.
No inventory loading: Direct sellers make money by simply booking orders, not committing to a substantial investment that may cause financial distress to the distributor subsequently. You should be able to buy, say, a single sachet of shampoo, if you think that's all you will be able to sell.
Low exit barrier: Protection is given to distributors who may want to get out of the business.
Check these fundamentals out before you sign up for a distributorship. Or you could lose money. And yes, don't give your friends the feeling you are meeting them only to push your products. Or you could lose your social bonds.
But seems recently many of these companies have come up with some sleazy product line up, just to get thru the legal barriers to become legitimate and prove they are not a pyramid scheme. The main income still remains from joining more people in your network and products are just for name sake! So before you join one of these, do a thorough research, analyze their products and be willing to do a lot of hard work in the initial stages. I was with Amway (2004-06) for almost two years, may be I will write in detail about it later.
Read more here:
Article on direct selling in India:
http://timesofindia.indiatimes.com/articleshow/700194.cms
Reviews on direct selling company QuestNet:
http://www.mouthshut.com/product-reviews/Quest.net-925052721.html
Reviews on Amway, supposedly called the global leader in this type of business:
http://www.mouthshut.com/product-reviews/Amway-925071625.html
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