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other-topics Network Marketing – Definition, Benefits and Legitimacy

Direct selling is a noble concept of selling products and services directly by the entity to consumers through personal referrals, product demonstrations, and training programs/presentations. The direct selling model excludes long distribution channels and intermediaries such as wholesalers, retailers, and forwarding agents. In traditional marketing, the companies typically sell their product through a defined channel of super stockiest, wholesalers, retailers, and forwarding agents. As a result, the cost/margin of these channels gets included in the MRP of the products along with the cost levied for advertising the products. Whereas in network marketing, the products are marketed through independent distributors to customers.

The margin of wholesalers retails and forwarding agents, etc. is saved in this channel and distributed among the independent distributors and customers in the form of incentives (commission) for selling the products further to the consumers. A reputed independent association named Indian Direct Selling Association (IDSA) affiliated to World Federation of Direct Selling Association (WFDSA) regulates the good and ethical practices of network marketing companies in India. IDSA works as the apex body/ representative of the industry with government and regulators. This enables industry policies and code of ethics such as fairness, explanation & demonstration, prohibited practices, respect of privacy and remuneration claims, etc. which are mandatory to be followed by all the direct selling companies. 

These guidelines cover all of Indian Direct Selling Association (IDSA) members, their staff, contractors, distributors, agents, and independent sales consultant /Direct Sellers, including full and associate members while engaged in Direct Selling, for the sale of either products or services. Any company not following these guidelines might be falling in the ambit of money circulation because of an unviable company plan and/or compensation strategy. Now, many people have a bunch of questions in their minds while associating with Network Marketing companies because there are a lot of non-legitimate companies in the market. People want to associate only with genuine, legal, and top direct selling companies to prevent fraud. So, one should check whether the prospect company is a member of IDSA or not. Also, they can check the legitimacy/registration of the company on the MCA (Ministry of Corporate Affairs) website.

 Now, let’s talk about the growth of the industry. It has been observed recently that network marketing companies have become extremely popular marketing model across the globe because it involves minimum cost and low risk. Also, distributors in network marketing companies in India and abroad do not require any formal educational qualification but demands a humongous amount of training and awareness programs to sell products successfully in the market. According to ASSOCHAM, the direct selling industry in India had embarked on its success at ₹12,620 Crores in 2016 which increased with double the numbers since 2011. ASSOCHAM has also predicted an expectation of touching ₹15930 Crores by 2021. Anyone can start this business part-time and increase time involvement gradually with their network growth. In a sense, direct sellers are their own bosses. Moreover, products of good direct selling companies are high-quality products accompanied by good customer services. In short, one can evidently see the real power of networking.

Another reason, network marketing business is considered effective because it also gives you the benefit of new emerging technological advances such as the use of digital media is increasing day by day. With its help, a person can explore business opportunities nationwide and not limited to a local area as when you are doing promotions off-line, you're limited only to the local people within your reach. Generally speaking, various business plans are rotating in the market today such as binary plan, level plan, board plan, etc. but with experience and time, the industry has learned that the best plan is a re-purchase plan because this plan allows earning from your network regularly. This results in a steady stream of revenue from recurring customers who become loyal to the business' brand. To conclude, the future market for direct sellers is predicted to be rising by different market leaders. This business model not only gives financial benefit or product quality to its users but it also improves the standard of life-style for every individual as they are considered to be an entrepreneur and they earn income with the convenience of their own timings and product confidence. Not only this, direct selling has played a huge role in women's empowerment as well.

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