MLM is a Multi-level Marketing system of direct selling. The fundamental concept of MLM is to sell products or services directly to the consumer via their own individual network of distributor, thereby by-passing the conventional channel of wholesaler and retailer. The advertisements of the product or services are also through the network of distributors by words of mouth and brochures, and hence eliminate the huge advertising and promotion cost usually borne by the marketing company or the manufacturer/producer.
The original concept and philosophy of MLM is to deliver quality products to consumer at lower cost and with personal touch and integrity. “Money back guarantee” was a practice they uphold strongly with pride. The MLM company, like Amway, also use simple, functional and cost effective packaging for their products. They save huge amount of money on advertising & promotion, packaging and distribution cost. The saving in cost is paid to the distributors in the form on commission.
Does the MLM company today still conserve the original concept and the core values of MLM? I am afraid the answer is “NO” to many established ones, as well as the newly sprung up MLM players.
I have been in the MLM industry for more than 20 years as a distributor and an employee of a MLM company. Both the MLM companies and its distributors no longer practice direct selling with the fundamental concept of delivering quality product at lower cost with personal touch and integrity. Instead, every MLM company and distributor practice “Make “Big’ money fast” and disappear quickly. It is sad to see a genuine business distribution channel being tarnished and destroyed by greed. Nowadays, the MLM people have no ethics and principles. They will go to the great extreme to extort money from whomever they can get hold of. Stranger and relatives are not spared.
Due to the aggressive and disgusting approach taken by direct seller, many MLM companies now resorted to opening retail outlets and self-service convenience stores, hoping to attract consumers, without the harassment of the “unwanted” direct sellers.
So, is this the dead nail of MLM and back to conventional distribution channel? Only time will tell.
