Network marketing is popularly known as MLM business. Network marketing is a distribution of products and services through a network of consumers. Here the consumer uses the products and once convinced recommends the products to others some take it up as serious business and start working as distributors while some others stay as consumers.
Network Marketing is a direct selling business in which we don’t invest money but we invest time. MLM industry is the industry that has created maximum millionaires in the world. Network marketing is the future business in the 21st century. It is the smart earning opportunities without much investment. As the economy of the world slows down due to the pandemic situation of COVID-19 so Network marketing plays a crucial role in building the economy. In recent months due to Covid-19, many industries may be affected and have to shut down their operation, lakhs of people lost their job in just some days.
More and more youth entrepreneurs think out of the box and started their full-time career in Network Marketing. In recent downfall in the economy has more and more people opting for network marketing or MLM business.
In Developing countries like India, people are adopting network marketing a business opportunity and showing very interest in this. Incidentally, the people outside the industry have a variety of opinions about it but those who are in this industry are full of happy, optimistic, growth-oriented positive, and hard-working people who love helping others.
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History of Network Marketing:-
Direct selling or Network Marketing started hundred years back. Pretty much ever since there have been products to sell and money to buy those products, there has been some form of direct selling.
David h. Mcconnell the founder of Avon, began his career as a traveling salesman selling books door to door. In 1886 McConnell started California Perfume Co. and at that time he noticed a very interesting thing about his customer, in the starting period that most of his customers are women who stayed at home (housewife) often while their husbands were away for long periods. Mcconnell had the idea to recruit those women as a seller for his company.
This is the beginning of Direct Selling in the world. In 15 years by 1902 Avon recruits over 10000 sales representatives. Avon expands its business into Canada after successful in America in 1914 and after growing very fast in many countries they have changed their name to Avon in 1928.
Another old company in direct selling is Nutrilite, which later bought by Amway. Nutrilite has been started in 1920 by Carl Rehnborg in Shanghai.
By the end of 1940s Jay van Andel and Rich Devos distributing Nutrilite products, they found Amway in 1950. In 1970 Amway bought Nutrilite and merged both the companies. It is the revolutionary step in the Network Marketing Industry
After the 1970s many companies launch their business model with the MLM concept and widening the MLM business. Companies introduces various categories of products like Wellness, Household products, food items to attract potential customers
In the Early 90’s major companies like Avon, Amway Tupperware expands their business globally to build a massive consumer base to grow their sales.
In 1996 these companies started their business in India, Korea, and China.
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Growth of Network Marketing In India:-
Network marketing is a business model with multi-levels and forming an extensive network of people to promote the business. It is now the best business model because of the globalization of business direct selling is working in 100+ countries, business size of the market with 167 billion USD.
Network marketing in India has been practiced for several years and continues to be practiced today. The modern format of direct selling MLM started in around 1996 with some major international players entered the Indian markets. The industry growing day by day at a steady and continuous pace.
But several Ponzi scheme pyramid schemes take benefits of this growing industry and put some allegation in this industry is past several years that is the reason people don’t want to trust this business.
The government has issued the guidelines for direct selling in India in 2016 and since then the industry has taken a big boost. A recent report by FICCI-KPMG projected that the retail sales in direct selling could reach Rs. 64500 crore by 2025 and provide self-employment opportunities to 1.8 cr of people Indians in which 60% are women.
The global Direct Selling industry stood at around USD 192.9 billion in 2018 showcasing a growth of 1.2% from the industry value USD 190.5 billion in 2017.
China is the leading country in terms of Direct Selling sales in 2018 with a Direct Selling sale of USD 35,732 million contributing around one-fifth of the Direct Selling sales globally. It is closely followed by the United States of America having a Direct Selling sale of USD 35,350 million in 2018. China along with the USA contribute more than one-third of Direct Selling sales globally in 2018.
Amway continues to be the leading Direct Selling organization with a global revenue of USD 8.8 billion in 2018. Avon Products Inc., Herbalife, Infinitus, and Vorwerk along with Amway comprise of the top 5 Direct Selling organizations in 2018 based on their global revenue.
The Indian Direct Selling Industry stood at around INR 1,30,800 million in 2018-19 growing at approximately 13% from INR 1,16,700 million in 2017-18.
The direct selling industry in India seems to be promising in the yielded benefits. A golden period of network marketing industry In India is starting now and the industry is ready with huge opportunities. Various government schemes like Digital India, Make in India, Skill India supported the attributes and growth of Network marketing business in India.
To enhance the expansion of Network marketing companies the varied guidelines are often implemented at different levels and policies. Policies like FDI (Foreign Direct Investment) policy and consumer protection bill will offer a retaining environment for the MLM business.
What a Network Marketing business can give you :-
People start network marketing for various reasons. There are various social and economic factors network marketing effect.
Enhanced employment generation for youth:-
Network marketing give employment to a large number of people in India and all over the world. AS the unemployment rate has been increasing day by day network marketing is the only way to start a new career for youth. As per CMIE report, around 28% of youth don’t have a job in India. The direct selling industry is a new and bigger market for them.
Women empowerment is the most trending discussion nowadays. Every women want to be independent in their life and network marketing gives them that chance without any investment without breaking their primary duties and responsibilities.
Second Income Source:-
MLM is the second income source for most people as inflation increases people couldn’t meet up their expenses with their normal source of income. SO they want to join network marketing to earn a handsome money for securing their future life.
Early Retirement :-
People can take early retirement from your job. If you working hard for 2-3 years continuously then you can take early retirement from your work and enjoy your life with a good amount of earning.
Financial Freedom and luxury life:-
Network marketing starts with self employment and leads to a passive income source of business. When your team size growing your income will also grow to a large amount and you can live a life of financial freedom. You can have luxury holiday trip with your family luxury car like AUDI, Mercedes etc.
Contribution to Society :-
Network Marketing contributes a significant role towards society. MLM makes people self dependent, develops peoples skills. Companies also contributes valuable supporting role to social responsibilities. They plays a crucial role in resolving the social impacts.
For example: Vestige Heart to Heart Foundation, Avon’s Breast Cancer Crusade.
Contribution to Nation:-
MLM companies generate a huge amount of direct and indirect tax which contributes a significant role in tax collection in India. All the networkers got their payout after TDS deduction. Total tax collected 20 billion in the year of 2018.
Unique features of the Network Marketing Industry:-
There are a few unique and distinct features of Network Marketing Industry that it make easier and lucrative for people to start their networking career ,
- Low Entry Cost:- This business can be started with by shopping or using some products/services that cost only a few bucks. You can start with just as a consumer of service.
- Zero Set Up Cost:- You don’t need an office/staff/working capital/warehouse for doing this business.
- Zero Exit Cost:- You can close this business simply by deciding to quit it. You never need to set up for this business so you can quit easily.
- System Support:- Always get excellent support from a training and development system, that produced thousands of achievers.
- Low investment:- Network marketing can be started with just buying some products and services from somewhere else anyway.
- Get partners who will support you fully for your success in your business.
- You no need to leave your current job or profession to start this business.
- Mentorship from great leaders who are earning a good amount of money and success in this field.
- Life-changing education that helps to transform your life to a better life.
- Equal opportunity for each and everyone, anyone can be successful here, irrespective of age, education, gender, location, financial background, or religion.
- You will get a tax advantage, just like other businesses and professions.
- The whole family can do it together as a family business.
- You can work as per your choice and convenience.
- It is the easiest way of creating passive income opportunities for common people.
The direct selling industry in India has almost doubled since 2011 to succeed in 12620 in 2016 and is predicted to grow at a compounded annual rate of growth CAGR of about 4.8% to reach 15930 cr in 2021 reveals the study undertaken by ASSOCHAM
Direct Selling industry helps various schemes launched by the government in the past 4-5 years. The direct selling industry contributes a large to skill India initiative by Modi’s government. Also make significant roles in Make in India, Digital India, Start-up India initiatives, and women empowerment.
Direct selling besides provides self-employment opportunities to numerous people around the world also helps in advancing the overall trade and economy and commerce of an economy. It gives freedom to people for doing business in the way they have always wanted and motivational factors to their entrepreunieal skills.
According to a report, around 50 million people are benefited from the opportunities offered by this industry, and looking at the market size and population India has bigger opportunities in upcoming years.
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