Why Multi Level Marketing Doesnt Work In India

Multi level marketing, almost always abbreviated to MLM, is one of the most common business models and proposals for Indians looking to make some money. This method involves the person first buying a kit of products from the company and then promoting them to others. The person who buys the kit then gets a commission whenever someone they have referred buys something.

Several terms describe various aspects of the multi level marketing business, but that’s the basic concept. A person buys stuff, refers someone else, and they, in turn, refer others. For example, the person who is referred to becomes the downline. The referrer becomes the upline, and so on and so forth.

On the face of it, multi-level marketing is not an outright scam. People do get what they pay for, and it is, in some manner, a business opportunity. Unfortunately, it is not a very good business model for the typical Indian, and that’s what makes people sign up with it and devise small scams.

Problems Multi Level Marketing faces in India

Indians typically work a nine-hour workday, with two hours added to travelling. So, they spend more than 10 hours a day working their day jobs, making it impossible for many of the middle class to even consider a side hustle, which is what MLM is.

This leaves the men and women who are at home, the retired individuals, and the housewives. A salesperson will tell you that sales is one of the most complex job profiles in the world, and not everyone is cut out for the intricacies of sales. Even major companies rely on wholesale sales, discounts, and corporate buys to run their business. Without the capacity to do all this, individuals will find it difficult to sell, whether it’s a multilevel marketing membership or a traditional product.

Also, while India is one of the biggest markets in the world, it is chock-full of traditional, generational brands with a substantial recall value. Because MLM products are mainly in the FMCG sector, a typical Multi level marketing company ends up competing with such products. This blogger can personally vouch for the quality and effectiveness of Colgate White and Sensodyne Rapid Relief.

While the toothpaste available via MLM channels might be almost the same price, the brand recall value is pretty high. Not to mention, the consumer doesn’t need to sign up somewhere to buy Colgate, Sensodyne or any other toothpaste; they can pick them up at the local store while returning from work.

MLM also doesn’t work in India because of a burgeoning grey market—the country’s street economy. In every city, you will find hundreds of street vendors selling knockoff goods and goods somehow ‘procured’. This street market is a conundrum for one major sector in which the MLM market thrives in the West: women’s make-up.

When does MLM turn into a scam?

With so many challenges, people who have already signed up for a multi level marketing program try some ethical and unethical ways to get more people signed up. This gives rise to those video ads we all have seen sometime, where a person claims he has earned millions via the MLM he joined. But the thing is, MLM, at least in its purest form, is not a scam. It is just so difficult to make money off it that people let it go, saying that it is a scam. In the West, 99 per cent of people fail at MLM businesses.

The Internet is also littered with accounts of people who were forced to buy self-help tapes and books that were guaranteed to make them successful salespeople. However, reports of any multi-level marketing company selling these courses professionally haven’t yet sprung up in India. What typically happens at one of the many programs is hyper-upselling, multiple tries to convince people, and selling a dream that very few people are successful in achieving.

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