Know Your Network Marketing

Dhanabir Singh Thokchom *

In view of the recent unfortunate scams that had rocked India and Manipur in particular, it is a must for every citizen to know the trends and development of Network Marketing in India as well as other countries of the world. Many MLM Network companies have collected crores of rupees from the innocent publics assuring of big return within a short period of time and run away. High Yeilding Investment Programme(HYIP) financial companies like Visarev, Forex Achievements, Speakout Asia, Global Finance, Jagran etc are the top looters who defamed the nice principle of Network Marketing companies.

The reality is that Network Marketing has become a successful concept that helps ordinary people to turn into successful entrepreneurs and finally into Millionaires. Basically, this concept is about distributing products directly from the manufacturers to the end consumers, thereby doing away with the traditional channel of distributors, wholesalers and retailers. Thus, the consumers get the entire benefit of direct selling. As per the latest figures, Network Marketing is today a more than US $ 100 billion industry, having presence in 125 countries.

However, in India, the Network Marketing is still at a nascent stage. But, it is expanding at a phenomenal growth rate. The concept, which took roots around 10 years back, India, due to its population and largest independent consumer market in the world, is the most attractive proposition for Network Marketing, provided that it is customized to suit Indian culture as well as requirement.

Top Fortune 500 MNC Network Marketing Companies like MonaVie, Amway, etc. have also entered in India considering the potential huge market of India along with many companies originated from its own soil.

These MNC companies started entering the Indian market since 1998. It is believed that more than 50 lakh consumers are involved in the industry locally, and the number is getting multiplied at the rate of 5000 people a day. Industry observers, who are highly optimistic about the growth of this industry, estimate the size of the industry to cross Rupees 5230 Crore by year 2013.

India, as an emerging economy, is now poised for an accelerated growth in the Network Marketing segment. Network Marketing in India is a blend of the old and the new where the bullock-cart and modern automobile move forward side by side. The traditional systems of Product based Programmes find their own niche along with Modern Internet based online / e-Commerce Programmes.

Genesis of Network Marketing

Not many people are aware that Network Marketing is not some fad but a scientific, organized, proven way of doing business worldwide. Some of the facts about network marketing:
Started in 1941 in USA and has evolved into an industry world over
Network Marketing is well entrenched in over 80 countries
Many Network Marketing companies exhibit rapid growth in Annual Turnover [20% to 300%] Network Marketing is 80 bn. Dollar Industry Worldwide

Over the last six to eight years the Network Marketing industry as a whole has grown worldwide. The reason for this phenomenon is simple, there are more people looking either to supplement or replace their income. There are more opportunity seekers in a recessionary period due to the uncertainty of their present financial situation. Many have lost their jobs, had their wages or overtime cut back or simply are concerned that they may be next in line for being laid off or cut back. For some who may be secure in their financial situation, a recession serves as a wake-up call that the party may be over and sitting around every night watching sit-coms isn't going to work anymore. They will need alternatives and for the first time they will be open to opportunities presented to them via Network Marketing

This being the case, it is exactly why the Network Marketing industry has grown well during down economies. That is why now is an ideal time for start-up companies to launch their ventures. There are vast amounts of people that will be drawn to this industry in the next few years. These will be individuals that have yet to consider this industry. Aren't buying habits what drive every commercial venture? Over the years the buying/producing habits of the general populous has formed and shaped economies and even complete societies from the dawn of time.

Certainly e-commerce is still a powerful tool for buying and selling and is a channel of distributing products and service that cannot be ignored. This is where Network Marketing comes in. It has been said that never before has there been two industries better suited for each other than Network Marketing and Internet e-commerce. It is that of combining the high tech tools and convenience of e-commerce with the high touch service of the person-to-person industry of network marketing. There is much available in the way of technology, which is affordable and extremely powerful, providing a major element to the success of a new network-marketing launch.

What is Network Marketing?

Network Marketing is only a method of distribution of goods or services from the manufacturer to the end user. Network Marketing is a method of direct selling. The other selling method in direct selling is single level marketing or SLM. In Network Marketing you have an opportunity to develop a marketing network from which you will earn commission on the sales of multiple level of representatives.

In traditional form of distribution the manufacture gives it to the Super Stockist, who in turn gives it to the distributor who passes it on the retailer. Each one on the way before it reaches your hand takes a commission; to this add the advertising budget. The total of all this is roughly 60% of the MRP and in some cases even more. What happens in Network Marketing is that since there is no Stockiest , distributor or retailer and since it is word of mouth marketing there is no advertising budget, that 60% budget gets distributed amongst the individual distributors or networkers.

Over decades Network Marketing has proven to be a very powerful way to distribute goods and services in the US and Europe. In the 1940's a company called Californian Vitamins first allowed its direct sales people to also recruit other sales people for a commission on their recruits sales. They created an Network Marketing direct sales company. Two of the top salesmen then created the Amway Corporation. Direct sales in the 70's due to some unscrupulous companies were attacked in the courts. Amway, fought and won, in 1979, thereby proving that Network Marketing was a legally justifiable form of business.

"You (direct sales) strengthen our country and economy, by offering opportunity to others. I've followed your industry's growth for years now. Your industry gives people a chance, after all, to make the most of their lives and, to me that is the heart of the American dream" Bill Clinton.

At this point too in India the Network Marketing industry is facing similar problems from unscrupulous Network Marketing operators who are giving genuine Network Marketing companies a bad name. It is only a matter of time that Govt of India and regulatory authorities RBI / MCA along with the IDSA / DMAi will set norms for anyone who intends to run a Network Marketing Company in our Country. Few States in India have taken a positive initiative and have set up guidelines governing Network Marketing Companies like Kerala, Gujarat and Manipur have also initiated, by forming a high level committee.

There are many companies who have masked money chains, which are illegal in our country, as a Network Marketing company. One cannot sell a product eg a pen that cost Rs 20 in the market for Rs 200 and justify it as an Network Marketing company.

To clear a few misconcepts of the Network Marketing industry, a lot of people believe that it is only the people at the top who earn a lot of money or it's the people who have joined early make the money. This is not so. In a genuine Network Marketing company it does not matter who you join or when you join, you have the same opportunity as anyone above you or anyone who has joined way before you to make as much money or even more than them. It all depends on your effort, your ability to understand the dynamics of Network Marketing and your ability to create leaders below you. All this things can be learnt if you have the dogged determination, enthusiasim, will power and positive mind setting to succeed.

Another misconception amongst people about Network Marketing companies is that only new companies begin with Network Marketing as a method of distribution. This is far from the truth; take the example of HLL in our country a company that has over 10,000 crs in turnover to have decided to enter into Network Marketing. This should lay to rest all doubts in one's mind about the power and legitimacy of this form of business. A large amount of Fortune 500 companies produce goods for Network Marketing companies, only proving that Network Marketing companies also focus on quality of their products.

To understand the potential of Network Marketing in India and its future we need to first consider the number of people in the industry in various countries and the turnover they generate, statistics show that roughly 3% of the population of those countries are involved in Network Marketing.

Percentage of Population doing Network Marketing

For India to reach 3% of its population it would mean 30 million people even if we take 3% of middle class which roughly 350 million peoples it means over 10 million people will be involved in Network Marketing which is 10 times the present amount of people involved in the industry. Which should also lead to a 10 times increase in the turnover which will be close to 3 billion dollars or roughly 14,000 crores.

One can imagine the boon it will be for the people in this country, which faces tremendous levels of unemployment and business opportunity for the middle class? It is the best and the safest method to create an additional income in the house without having to give up the present form of creating income.

Conclusion

The Author Mr Dhanabir Singh Th. who is an International Author and Publisher and Financial Consultant strongly advocates Network Marketing, as a powerful platform for distribution, However it would be futile to suggest that everyone jump on the bandwagon of starting a Network Marketing Company. The author also concedes that it is a highly potential and dynamic method to create additional / residual income for the determined. Persons interested may contact the Author at dhanabir(dot)th(at)gmail(dot)com for any queries regarding this article. Visit: http://monavieindia-acaiberrydiet.blogspot.in/2011/08/monavie-successful-black-diamond.html