A lot of people have been arguing for decades why direct selling businesses cannot or will not work. But the fact remains that it is one of the most prominent types of businesses and it has existed for almost a century. In fact companies like Amway and Tupperware are actually older than Microsoft and Apple. Even after all those nay-sayers running amok, several MLM and direct selling companies are listing growth and profit every year. This made me question the basic premises on which the negative arguments stand.
Before I delve deeper into the discussion, let’s understand a fact that there are many cheat and fraud MLM and direct selling companies out there. The points I am going to make will help you find the companies which are legitimate and actually make the partners gain profit. A basic observation though. There have been several Ponzi schemes and fraud “chit funds” that have swindled common people out of their heard earned money for centuries. But there seems to be much less awareness about these fraud financial companies than the direct selling businesses.
1) Legitimate Direct Selling Businesses Require Small Fees To Join:
On an average, it does not take more than 30 to 100 USD to join a direct selling business. At least that is what the legitimate ones charge. If a company is asking for more than that, there is a high chance of fraudulent activity. The more money you invest in a business, the harder it is to break even and it is true for all forms of businesses. MLMs that require a small fee to join allows people to recover their amounts fast and easily.
2) Only 3% People Succeed In Direct Selling Business For A Reason:
It is one of the pet figures of anti-MLM people who use it as a tool to prove that this type of business is not for common people (read honest people). However, this low percentage is there for a reason. Do we know how many shops, restaurants and other businesses open and close each year? The numbers are surely staggering. The best thing about MLM businesses is that anybody can join the business for a small fee without any interviews, exams and such. Hence, a lot of people join these companies out of a whim and then do not follow through. If there were stringent joining procedures in place, the percentage of successful people in MLMs would have been much higher.
3) People Do Not Use Their Common Senses:
I have seen many people buy a huge number of products after joining a direct selling business in the hopes of selling it for profit. But the funny thing is that a business does not run on hope, it runs on calculation. I have seen many people lose large amounts of money by doing this and then blame the business. Well, play it smart and buy only the amount you are sure you can move or buy them when someone places an order.
4) Don’t Fall For Fake Promises:
If you are promised that you will make thousands of dollars within just a couple of months of joining the business and roll in money within a year, there is plenty to be suspicious about. If you still decide to join that business and then the business turns out to be a scam, do not go blaming all the direct selling businesses. Only join those which guarantee profit through hard work and dedicated effort and that too in believable amounts.
5) Pyramid Schemes And MLMs Are Not Same:
Pyramid schemes pay you money for presenting the business plan to someone and inspiring him to be a part of the business. Legitimate direct selling business will never offer you money if someone joins the business using your recommendation. Profits in the real ones are always linked to the amount of products you move or amount of business you generate for the company. There are no freebies.
6) Make Sure That The Products Are Genuine And Marketable:
If you are approached by two business where one has a “Wonder Disk” that purifies water, increases energy when someone holds it and calms the mind when placed on head and another company that has a “Health Drink” which is bio-organically manufactured and has all the nutrients clearly mentioned on the label, which company do you trust or join? The decision is simple right? Well, the reality is quite different. A lot of people join companies with suspicious products and when they fail, they blame the direct selling business on a whole.
It does not take much money to join a direct selling business or to become successful in it. All it take is to tread a bit carefully and apply some common sense. In a study, almost 90% business owners of legitimate direct selling companies expressed that they were happy with the business model and experience. So next time you come across a negative article about direct selling, use your brain and question the points with an open mind.