You must be wondering how this 18-year-old looking kid got experience of 12 years in Network Marketing field, but that is not a joke, let me tell you my story, in addition to that I’ll simplify the concept of Network Marketing to you.
It was the year 2007 when my parents were first introduced this concept by some acquaintance of my father. That acquaintance explained the concept of one of the leading MLM(Multi-Level-Marketing) company. My parents got convinced and tried their hands in this industry. To become a user in that company, one had to pay around 1500 INR and he would get a Kit, consisting of suit clothing and a bag. When my parents used to explain it to some other neighbors and relatives, I used to watch everything, and, in a few years, I knew everything that my parents used to explain. The user is called Direct Seller or Distributor of company. The basic fundamental which is followed by all the MLM companies is that they will manufacture their FMCG products in their factories and sell it directly to consumers, which would eliminate middle man’s cost such as adverting expenditure and every cost that is involved between Production of goods and Distribution of goods and distributing these profits among its distributors.
Every MLM company follows the same pattern, the only thing that will vary is, their pattern of distributing profits among its direct sellers, that too will be very similar to each other’s pattern.
Earnings: -
For the purpose of simplifying the earnings that one could earn over a period of time, I am explaining to you the pattern of the very same company that my parents joined in 2007. You need to add Direct Sellers by your reference. Those who will register themselves by your reference will be called your Downline, the person who made you join the same company will be called your Upline, and there will be a proposer who explains everything about the structure of the company and everything that is required to know or suggested you.
Most of these MLM companies deal with FMCG goods and Nutrition products. There is no doubt products of each and every MLM company is world-class, you must try it once, but these products are a little bit costly too. Some of these MLM companies sell their products at par with other famous companies that exist in the market. Coming to the earning part, for every product there is a Price and BV(Points), BV= Business Volume, BV is almost equal to half of the price in most cases, some refer it to as some points. Let’s say you purchase a product the price is 1000 Rupees, and the BV is 500 Rupees then, you will get a certain percentage of 500 directly in form of discount, initially, it starts from 12% and goes up to 33%. There is a slab for every stage. I am explaining to you the earning of the very first company that my parents joined. If you want to reach the first level of earning, then you need to maintain a BV of 300,000 and 150,000 in each of your legs, what is a leg, the leg is nothing but your downline, to whom you referred and they joined. If you buy good on your user ID then you will be directly getting a certain percentage of BV. If your downline purchases goods then you will be getting a different %age of BV as your direct income.
So, in order to earn 15000-20000 INR you need to maintain a BV of 300,000 in your leg A and 115,000 BV in leg B, if you consider purchase then multiply it by 2, so the purchase will be 300,000 in one leg and 230,000 in another leg. These legs are known as power leg and weaker leg, as the name suggests itself the leg in which business is higher will be known as power leg and if it is lower then it will be known as the weaker leg.
So how one reaches level 1st, if you add some users by your reference then whatever they will purchase and sell by their reference, it will be counted as your BV in one leg.
Most Optimistic case scenario-
In the most optimistic scenario, for every 10 people, you will add, one of them will be willing to work for you. If you manage to add 100 users by your reference than 10 of them will be working for you. And by the reference of those 10, 1 user will be willing to work for the team or chain that you have built, and so on.
Pessimistic scenario-
In this case, for every 30 people, you will add, one of them will be willing to work for you, this one of 30 could be 1 out of 100 as well, let’s say it turnout ratio. In the pessimistic case scenario, the turnout ratio is 1:30 to 1:100.
Those who are on the top of the food chain make the most money but the bottom 95% always struggle to earn a few thousand monthly.
Where one fails:-
If you get the support of one leg by your upline, then the probability of getting success multiplies by several times as you can now focus on one leg to increase sales up to the optimum level. Most of the newbies in MLM are unaware of this concept so they try their hands for years but remains unsuccessful.
Current trend-
It is no doubt that this industry has great potential. By 2025 it is projected to reach one of the leading industries in the market.
Scams:-
Between 2010-2015 there were so many companies that were set to deceive the people, some of them were Ebizz, Speakasia, etc.
After the 2015 Indian Government and ministry of corporate affairs step their foot in, and made some rules and regulations for this industry and made it almost impossible to do fraud with people. These companies have to follow the strict guidelines of the government.
Nowadays, scams are still being done in a digital way. I have seen people promoting paid ads on Instagram and Facebook saying they will provide you Internship opportunities and something catchy not mentioning it is MLM and deceiving innocent students and will try to set up a webinar where they will tell you the half story only.
I have seen ads claiming ‘ we guarantee you the income of >30000 in six months, it will not affect your studies, college students can DM me for the link of the webinar.’ These are all meant to deceive you, don’t step your foot in the trap.
Conclusion-
First of all, stop calling yourself an entrepreneur. An entrepreneur is a person who invents a unique product or service and brings revolution by adding value in day to day lives and contribute to GDP. In no case, you are doing the same if you are a Direct Seller. In my experience those who are studying in Tier 1 or Tier 2 institutes, you guys need not dwell your face in Network Marketing. But we live in a democracy so you are free to do whatever you want to do but be aware of the pros and cons of it.Always give first priority to your education.
PS- Your suggestions are welcome.
