Multi Level Marketing (MLM) has some other names also as network marketing or chain marketing …abcd or xyz names of the marketing. Is FRAUD...?
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| Is MLM fraud in India |
Yes this might be a good strategy to do business but look at the ethical level.
“Genuine product will have demand customer's go for it ..fraud products demand is being created by the so called IR or independent representative's” or product promoter .
1. Are you buying the product by testing it or by observing it from long time or buying it by the suggestion of An independent representative's for the sake of commission if so ,then it's a RISK.
2. Are you making ur close friends and family's as customer's and making them to buy and also making them IR's and making a chain saying that u will get it money if you join someone …
then. Think about it …
3. The product value will be very high than it actually seems , so why so much costly because u are not buying for the value of product but paying the commission's to the people in that Network…properly evaluate the value of product. Use brain don't be dumb person.
4. Are those people keep on calling u again and again and repeatedly forcing to buy or become members or trying to create hype of them as they are earning lakhs of rupees per month …( think again)then surely it's high risk of fraud …because when its a true product they don't need to run behind us. .we run behind them..
5. Do they have at least few registered offices in India can they describe their mode of business to legal officials like police or anything public “ how they actually work”.
There are many multilevel marketing companies in India and 90% fraudulent.
Target audience of MLM
1.Unemployed youth
2.Easy money making option for busy hard working men or women
3.Entrepreneur enthusiast's
Is MLM legal in India?
MLM (Multi-Level Marketing) is another word to describe network marketing, referral marketing, binary etc. The only difference between them is the manner of compensation. One of the most famous of the MLM companies is Amway.
MLM companies compensate their IR’s (Independent Representatives) on achieving certain “levels”. These levels could be achieved by sponsoring a certain number of affiliates or customers or achieving a certain amount of sale in a certain amount of time. The levels are pre- determined in the compensation plan.
Now to move on to legality. First let us understand the concept of network marketing. A company produces a product and to reduce its overheads; adopts a compensation plan such that its customers become its sales representatives. Simple. Is this mode of operation legal? Yes, no problem at all, provided that there is an agreement in writing between the company and the independent representative that is enforceable in a court of law; should the representative use unscrupulous ways to achieve levels or sales for the company.
As per the International Direct Selling Education Institute (IDSEI), some ways to know you are operating a questionable business
- No physical product being exchanged for money- could be a ticket or a login ID or a membership.
- No refund policy communicated by the IR during the purchase.
- No refund policy at all.
- No physical office of the parent company, listed in the country of operation.
- Products are unreasonably priced i.e. very expensive for the product e.g. INR 200 for a tube of toothpaste.
- Companies barring IR’s from operating with other companies- almost like a mafia of sorts.
- Company policy towards taxes is dicey and not clear.
There are many more but I have only listed out the jarring examples. To sum up, yes MLM is legal in India but being legal doesn’t mean anything and everything the company does is legal.
There is such a thing as fraudulent practices that gets noticed and then everything falls apart.
There is such a thing as fraudulent practices that gets noticed and then everything falls apart.
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Is MLM fraud in India
Reviewed by Neel Kamal
on
May 19, 2020
Rating:
Reviewed by Neel Kamal
on
May 19, 2020
Rating:
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