Have you heard direct seller uttering this statement “Shifting the goal post while the game is in progress”. What do you understand by this? To the MLM companies, they politically called this the “Enhancement of Marketing Plan”. In reality, this simply means changing the rule of the games. This means change the rule for qualification for ranks and payment of commission to direct seller. To put this plainly, it means “cheating” direct seller by manipulating the commission scheme.
The MLM companies can change their “Marketing Plan” as and when they deemed fit. Direct sellers are perpetually at the mercy of the MLM companies. Some MLM companies changed their marketing plan a few times each year. Distributor/agent should stay away from these MLM companies.
The Financial Freedom and Independence is really a Myth. You can never achieve financial freedom and independence by being a direct seller/agent for any MLM companies.
Not only the MLM companies are shifting the “goal post” , MLM companies are also shifting the channel of distribution. It just puzzled me which is a better channel of distribution for consumer products., Conventional or Direct Selling?
Having worked in the FMCG and the Direct Selling industries for many years and also involved directly in direct selling, I do not have a clear vision of the direction these two indurstries are heading to.
Direct Sellers no longer enjoy the exclusive right to sell directly to consumers. Conventional business channel companies are also selling direct to consumers, via their retail outlets.
In the conventional channel of distribution, the manufacturer or producer move the goods to stockist or exclusive distributors follow by wholesaler to retailer and finally, to the consumer. Now, the new conventional distribution channel also involved the Hypermarket. Hypermarket purchased goods directly from producers or importers.
The direct selling industries comprise Multi-level Marketing, Single-level Marketing(SLM), pyramid scheme, binary scheme and a host of other variations. This involves the producer selling the product “directly” to the consumer through a network of direct sellers. These direct sellers are nothing more than selling agents called by different terms and titles such as member, advisor, distributor, director, associate and other glamorous terminology. Whatever term is being used, these are nothing more than just selling agent.
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| The brochure is distributed by agent at shopping mall and in your letter box |
The fast moving consumer good (FMCG) companies are moving into direct selling. And the direct selling, Multi-level Marketing (MLM) companies are moving into conventional channel of distribution.
Simply put it, the grass looks greener on the other side.
Well established FMCG, like Sara Lee and Unilever, are already in the direct selling business. Their direct selling is a hybrid of distribution channels. They set up retail outlets and use selling agents to market and distribute the products to the consumers.
Established MLM companies like Amway and Cosway are moving in the reverse direction. Traditionally, they relied 100% on their selling agent to market and distribute their products. Now, some are opening retailer outlets, supermarket style, to complement their agent’s network. Cosway is opening chain of retail outlets and invite selling agent and new entrepreneurs to operate and manage these outlets.
Moreover, the MLM companies are breaching their own golden house rules of bringing their products directly to the consumers, without the added cost of Advertising and Promotion (A&P).
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| Advertisement in The Star newspaper |
Today, you can see all these established MLM companies advertising on the mass media. No medium of advertising and promotion is excluded. You can see highway hoarding sign board, newspaper advertisement, radio and television advertisement, internet advertising, leaflet and flyers being distributed on the street, LRT and monorail stations, shopping malls and house letterbox.
The MLM companies have removed their own proclaimed competitive advantages of No Advertising and Promotion, No shop overheads, and No fancy packaging. Worst of all, the level playing field among their own agent is removed.
