Network Marketing Industry

Network Marketing Industry

Network marketing (also known as Direct Selling Industry) today is a 200 Billion Dollar industry. With over 90 Million people involved and tens of thousands more getting involved each year this type of business is quickly becoming the place to work.

Network Marketing is a business model that depends on person-to-person sales by independent representatives, often working from home. A network marketing business may require you to build a network of business partners or salespeople to assist with lead generation and closing sales.

Network marketing is known by a variety of names, including multilevel marketing, cellular marketing, affiliate marketing, consumer-direct marketing, referral marketing, or home-based business franchising.

Companies that follow the network marketing model often create tiers of salespeople - that is, salespeople are encouraged to recruit own networks of salespeople. The creators of a new tier (or "upline") earn commission on their own sales and on sales made by the people in the teir they created (the "downline"). In time, a new tier can sprout yet another tier, which contributes more commission to the person in the tier as well as the middle tier.

Thus, the earnings of salespeople depend on recruitment as well as product/service sales. Those who get in early and are in a top tier make the most.

"The best investment I ever made"

                    Warren Buffet, Billionaire Investor Owns three direct selling/network marketing companies

History of Network Marketing 

Back in the 1930' there was a man by the name of Carl Rehnborg. He set up a company called The California Vitamin Company. In 1939 he re-branded the company as Nutrilite. It wasn't until 6 years later that Carl invented the multi level marketing strategy to help boost the sales of his company. This gave birth to Amway and bought a controlling interest in Nutrilite in 1972. In 1994 Amway took over full ownership and is one of the largest companies today.

In 1991, after the arrival of Internet, you all know how the world was connected to each other. Direct selling companies had entered India in the year 1995 and 1996.

From 2006 to 2016 there was ten million new millionaires in the U.S. alone...many emerging from direct selling

                                PAUL ZANE PILZER, World-Renowned Economist and Best-Selling Author of The Next Millionaires

The Industry has grown to unbelievable levels over the years. Here's the breakdown since 2009.

2009-$117 billion               (8,54,100 crore INR)

2010-$117 billion               (9,63,600 crore INR)       

2011-$158 billion               (11,53,400 crore INR)

2012-$167 billion               (12,19,100 crore INR)

2013-$178 billion               (12,99,400 crore INR)

2014-$178 billion               (13,28,600 crore INR)

2015-$182 billion               (13,35,900 crore INR)

2016-$182 billion               (13,28,400 crore INR)

2017-$189 billion               (13,80,000 crore INR)

By 2020, Network Marketing Industry is expected to generate $200 billion (14,60,000 crore INR)

The top market depicting the highest sales globally are USA (20%), China (19%) and Korea (9%). India's ranking in the industry in terms of the size of the sector improved from 22nd in the 2014-15 to 20th in 2015-16.

Current Scenario of Network Marketing in INDIA

The Direct Selling Industry in India has almost doubled since 2011 to reach Rs 12620 crore in 2016 and is expected to grow at a compounded annual growth rate (CAGR) of about 4.8% to reach Rs. 15930 crore in 2021, reveals the study undertaken by ASSOCHAM.

The average sales of each participant in India is about said $300 per year, that is R 20000 where the global average is about $1700 per participant per year or about Rs 10000 per month, reveals the ASSOCHAM paper.

For reference: 5.1 million distributors in India generates business worth 1.513 billion dollars in 2017, Whereas in China, which on similar grounds generates 34.29 billion dollars business with 5.3 million distributors in 2017.

No one really knows how many people will be infected (or will pass away sadly), but it has caused the global stock markets to crash, which means as a business (or even a marketer), you will be affected.

Even if the virus slows down fast as the numbers have dropped in China, businesses are going to struggle for well over a year because they will have to make up for their losses.

For example, in China the virus caused retails sales to drop by 20.5% and the unemployment rate jumped to 6.2 in February.

When companies like Apple shut down their stores to help reduce the spread, it means less income and less profit. Sure they are able to pay their employees during their temporary shutdown, but not all companies have their bank balance and most won't be able to do the same.

Just look at the travel industry. The virus is expected to lose them 820 billion dollars. Virgin Atlantic just asked their staff to take an 8-week unpaid leave.

The ports are also empty and the first rounds of layoffs have already started.

It's estimated that in total COVID-19 will cost the global economy $2.7 trillion.

And not only are people loosing money but they are loosing traffic and conversions. 

The Only Industry which was able to sustain is the own where you can work from home too. The business in Network Marketing Industry Boomed to its new highs during lockdown but since the penetration of network marketing in India is very miniscule, it was of not much help for Indians.

Future of Network Marketing 

Be fearful when others are greedy, and greedy when others are fearful.

I didn't come up with that saying, it's actually a line from Warren Buffet

You will see people cutting back because the economy is predicted to get hit by 2.7 trillion dollars and experts are saying that we are going to go into a recession.

You even have billionaire investors like Carl Ichan saying that the market has more room to go down and we should expect the sell-off has longer to go.

But what I've learned from going through two crashes (the dotcom crash in 2000 and the real estate crash in 2008) is that the best time to double down is when others are not.

During an economic downturn, you'll find that you will have less competition, which means it is easier and faster to get results.

 

As you can see, the people who wake up and realise what is going on in the world and begin to act on it and that get in now are going to be richly rewarded in the years to come.

The next 50 years are going to be a very exciting time where a whole new wave of millionaires are already to breakthrough or where lots of people are struggling financially. It just depends on which side of the fence are you going to be positioned?

Future of Network Marketing in India

As per KPMG-FICCI report, the Indian market for direct selling or network marking industry was estimated at Rs. 7,500 crores in 2013-14. It forms around 0.4 percent of the total retail sales in the country. This figure is still far lower than other comparable economies (one-half of direct selling market size of China and one-tenth of Malaysia). As per the reports from FICCI-KPMG Direct Selling is likely to reach Rs. 64,500 crore billion in India by 2025.

The days of the consumer are over. And the age of the 'Prosumer' (read proactive consumer) has begun. Prosumerism ensures customer loyality, rewards those who refer and introduce more users to a given number of products & imparts financial stability as an option.

The time has come for Indians to enhance network marketing or multilevel marketing (MLM) with open arms. Just like war needs weapons, doctors need drugs, politics needs disputed, MLM needs people. And people are there in abundance in India! MLM peers in New Zealand were forced to hone their skills by showing their business plan to sheep as enough people were simply not available.

Currently, our economy is just going into another official recessional period due to the Coronavirus (inevitable).

Why is there continuing growth economic downturns?

That's simple, people look for extra income streams during times of economic downturn, not to mention with the current lockdown situation worldwide, people need a way to work from home using nothing but a laptop and phone. So to sum it all up, it's pretty darn big!

All these factory jobs are long gone. All that's left is very high tech jobs like running the robots that are slowly taking over. Creating the AI that's taking over. Or network marketing. (sales jobs). Sales jobs have always been around. And with the shift in the economy it will continue to go that way. Also if you're doing an MLM business then what we do is we can add people into your downline of whichever MLM you're doing. So check out MLM for that. But the industry will now start go grow massively. People have no idea how big it's going to get. Why? It's simple. Bitcoin, and also the fact the web is getting easier for the average person, and everyone being connected online. So it's really going to spur massive growth. In the coming years. As another several billion people in Africa and other emerging economies get online, the  first thing they'll look up is "how to make money" and start a business online. So MLM will get waves of new people getting into it. And with bitcoin and fintech growing, they'll be able to get paid instantly. So it's going to grow to grow huge.

According to network marketing facts and statistics, people between 35 and 44 years comprise 26% of distributors. Those aged 45 to 54 follow closely at 24%, while the figure for 24 to 34 year old is 19%.

The marketing approach is least popular with people below 25. Those aged 65 years come in at 8%

India has 62.5% of its population in the age group of 15-59 years which is ever increasing and will be at the peak around 2036 when it will reach approximately 65%. These population parameters indicate an availability of demographic dividend in India, which started in 2005-06 and will last till 2055-56.

According to global network marketing facts, Asia is the leading continent sales-wise. In 2018, Asia made a total of $85 billion, followed by Europe with $38 billion, North America with $36 billion, and finally South America with $27 billion.

Law related to Network Marketing Industry in India

Every time any legitimate Direct Selling company or its distributors, land up in trouble, you can bet that someone not understanding the difference, between Illegal Pyramid Scheme/ Money Circulation / Ponzi Scheme/ Price Chit and Direct Selling / Multi-level Marketing/ Network Marketing, is the root cause of it. And unfortunately, not only most common people don't understand the difference. but also many legal advisers and Govt. Regulators don't understand it either.

The lack of clearly defined law regarding Direct Selling Industry, is the root cause of all confusion. 

In 2016, Shri Ram Vilas Paswan, Minister of Consumer Affairs, Food & Public Distribution, announced a model guidelines on Direct Selling.

Key features of the Guidelines:

Conditions for the setting up of DS business

Conditions for conduct of DS business

Conditions for DS contract between Direct Seller/Distributor and DSE

Certain obligations of Direct Sellers

Relationship between DSE and Direct Seller

Conduct for the Protection of Consumer

Prohibition of Pyramid Scheme & Money Circulation Scheme

With each recession, the MLM industry has experienced significant growth because as the economy goes, Network Marketing goes the opposite.

Whatever be your age or profession, get out of your comfort zone, enrol, acquire a mentor and build assets, the assets in this case being people who are similarly fired up to secure their future.