Experience tells us no, Opportunists tell us yes.
So..... what is the truth.
Sustainability should be the keyword in any business venture.
Is the business model sustainable?
Not based on the words of the founders but based upon factually presented evidence that supports the fact that the model is sustainable.
The exact same sustainable question should be asked of MLM operations that offer high returns based on the claims (many outrageous) made by the promoters who take money from unsuspecting individuals who buy into the promises of promoters of such companies.
It is important to note that some 98% of direct selling operations in India do not follow the guidelines which were recently published by the Government of India.
This sad state of affairs forces us to ask the question “Why are they not complying with the guidelines – What are they afraid of?”
Does this mean that the companies which follow more than 80% guidelines are sustainable?
Because the guidelines were drafted to protect the consumers only and they don’t have any measure to ensure longevity of the MLM operation.
There were no safeguards put for protection of the rights of the direct seller (salesperson)
Why is sustainability such a BIG concern?
What if someone told you to buy the products from the company and sell them to make money?
What if someone told you that you can also make money if likeminded people who want to sell product join you?
- You sell products – you make money
- You also speak to others that the opportunity is available for them to make money if they join the company
- If they join – good – you make a small part on the sales effected by them
- They can then do the same
- Slowly your network of salespeople increases and you make efforts
- To sell and make money
- To help the salespeople increase their team size
- To help your sales peoples team sell more products
- To try to reduce challenges for the team to perform optimally
- Your team grows, you travel, you communicate, you give trainings, you take care of their disagreements, you pacify them in case of errors by company, you get fully involved.
- You invest your money and time and emotions to build your business network.
- Days, months and years pass... Until one day someone informs you that your company is closing its operations.
That is when all comes crashing down – Pain, Anger followed by frustration.
“What will I do now?”
“What will my team members think about me?”
“How will I find a good company now?”
In fact, every year there are thousands of MLM operations which down their shutters in India and lacs of individuals again start looking out for a stable new company with a hope that their new journey will not end abruptly as their last one did.
With the direct selling guidelines only being concerned about the consumers and no enforcement as per the relevant laws on the non-compliant MLM operations, the road to regulations looks far and away... till then the MLM industry will continue to produce more victims than successes.