The Competition Administration Department, Ministry of Industry and Trade would like to introduce some basic awareness about the form of multi-level selling
1. What is Multi-Level Selling?
– Multi-level selling is a form of direct selling to consumers through a network of distributors consisting of many floors and branches. These distributors are paid commission/income from their own sales results and the sales results of their sponsors.
– Multi-level selling is a form of selling: It is necessary to realize that multi-level selling is actually a form of selling, not a form of investment seeking profit. Like other forms of selling, multi-level marketing seeks to get goods from the producer to the consumer.
– The sale is done by distributors: Usually, businesses sell through a system of agents, stores, and supermarkets. In multi-level sales, there are no agents, stores or supermarkets, but goods are used directly by distributors or introduced and sold to consumers.
– Paying commissions: commissions are actually wages that businesses pay to distributors who help businesses distribute goods to consumers. Ordinary commercial enterprises pay commissions to agents and stores, while multi-level marketing enterprises pay distributors. Thus, by becoming a distributor of the business, you participate to help the business sell and get a commission from the business, not you participate in the investment to enjoy profits.
2. What is a reliable multi-level marketing business?
– A trustworthy multi-level marketing business must first and foremost do the actual selling. That is, the basic activities of that business must be sales and consumption activities, not recruitment and investment attraction activities… A genuine multi-level sales enterprise, properly implemented sales function, need to meet the following basic criteria:
– Have a good product: The origin of multi-level selling comes from the fact that a person has a good product, he finds a way to share his good product and thereby sell that product to everyone. people in society so that everyone can use that good product. Only when there is a good product will the multi-level marketing enterprise have a basis to introduce to consumers and consumers will trust to buy that product.
– Train good distributors: Distributors are people who help businesses introduce and sell goods to consumers. Therefore, in order to perform their sales function in the best way, multi-level marketing enterprises need to train their distributors thoroughly so that they understand the product and have good sales skills.
– Mainly focus on sales, not on recruitment: Multi-level sales activities are carried out through the distributor system. Therefore, in parallel with sales, businesses must also recruit and build a system of distributors. However, selling must be the top priority. The recruitment is also only for sales purposes. A true multi-level marketing business must exist based on revenue from sales activities. When goods are sold, the business has revenue to maintain operations and also has money to pay commissions to distributors.