Posted on March 16,
This week I have put together 10 questions that are frequently directed to players of the direct selling industry. These are directed either because of being less or misinformed or due purely to prejudices. I am sure many of you have come across some or all of these.
Here are my usual answers to them.
1. Do network marketing and pyramid scheme mean the same thing?
No! They might seem similar but they are very different from each other. The participants’ incomes depend upon retailing of goods and services in the network marketing model. In a pyramid
2. What is a “Ponzi Scheme”?
In short, it is the finance industry’s pyramid scheme. Here, participants’ incomes are paid not from the profits generated through their own investments, but through the investments of newcomers. Needless to say, the system collapses shortly when there are fewer newcomers.
3. Is direct selling a sustainable business model?
I will answer this by giving some examples to direct selling companies operating at the moment, mentioning when they were established: J.R. Watkins (1868), Southwestern (1855), Vorwerk (1883), Avon (1886), Kleeneze (1923), Tupperware (1946), Shaklee (1956), Amway (1959), Mary Kay (1963), Oriflame (1967) and Natura (1969).
4. Is this channel only good for beauty products and food supplements?
5. Is direct selling an opportunity for individuals to get rich quick?
Direct selling provides an opportunity to individuals to reach very
6. How important is being one of the first members of a network marketing organization?
There is no direct link between being one of the founding members of a field organization and high earnings. In other words, this does not guarantee a higher income. Looking from another perspective, if this was true who would want to join an organization after a while?
7. Can individuals make a career in direct selling, working for many years?
Absolutely! They can work for many years and their businesses can be inherited after they pass
8. Is direct selling more suitable for women?
Globally, it is estimated that 75% of direct sellers are women and 25% are men. Direct selling can be easily done on a part-time basis. And this characteristic appeals to women very much. There are many organizations where there are much more men than there are women. Being a typical micro-
9. What is a compensation plan?
A compensation plan shows how a direct seller will be
10. Do the advances in the digital world pose a threat to direct selling’s future?
Some thought they would. However, especially the developments in social media showed the opposite. Contrary to this belief, we see that the Internet provides very powerful tools to support the activities on the field.