Hyderabad: It is not necessarily the case that the multi-level marketing business model is a scam per se. It has unfortunately been used by dishonest people to cheat people and has this got a bad name.
“The MLM business model is a solid business model that works well for the company and distributors when the process is followed. The company is able to payout when products are sold and the distributor can earn off of their production as well as team results. This creates a win-win solution for both sides,” said A Karthik, a marketing expert.
The Central Government’s Department of Consumer Affairs had notified the Direct Selling Guidelines earlier, to serve as a model framework for state governments to consider regulating Direct Selling and Multi-Level-Marketing. It has advised state governments to adopt the Guidelines to strengthen existing regulatory mechanisms on Direct Selling and Multi-Level-Marketing, in order to prevent frauds and protect consumers.
“The Southern Region is a very big market for the Direct Selling industry with a 23 per cent market share, and Telangana is a very important state for most of the Direct Selling entities. It is a very positive step from the Government of Telangana to bring Direct Selling under the ambit of regulatory framework,” said Vivek Katoch, chairman, Indian Direct Selling Association, in a statement.
