SINGAPORE: It's been over five years since the law was
amended to allow legitimate multi-level-marketing (MLM) firms to
operate here came into effect, but the direct selling industry
remains dogged by the negative image many associate with pyramid
selling.
"In the early tough days, legitimate direct sellers were held back
by suspicion. But sadly, this scrutiny of legitimate direct sellers
continues till today; it is uphill still for us," said Mr Benjamin
Tan, a founding member of the 30-year-old Direct Selling
Association of Singapore (DSAS).
To improve its image and win public confidence, the body - which is
made up of 22 of Singapore's biggest direct-selling companies - is
calling for tougher self-regulation.
It is drafting rules to tighten loopholes in the industry -
currently the association doesn't step in if any of its member
firms collapse. With the new rules, it will step in to help
affected consumers.
Also, it will step up on checks on its members: Those who
repeatedly don't abide by its code of ethics and conduct will face
expulsion.
"We will look into how we can better protect consumers' interests,
whether through further collaboration with the Consumers
Association of Singapore, or through local regulatory and industry
partners," said Mr Nicholas Chia, chairman of DSAS.
The association is setting up a one-stop information centre for the
public next month.
This centre will allow consumers to check - for free - the
legitimacy of any direct-selling company, and help organise public
education forums to inform the public on the differences between
direct selling and pyramid selling (see box).
"However, if the negative mindset about the industry persists, we
are under severe threat of losing a large pie of the potential
multi-billion revenue that the global industry will generate," said
Mr Chia.
While one in every 10 Singaporean buys from direct selling
companies now, Singapore is still falling behind the rest of
South-east Asia in grabbing a share of the US$101 billion ($160
billion) global direct selling industry, he said.
Last year, Singapore generated US$330 million in direct sales,
compared with Malaysia's US$1.4 billion and Taiwan's US$2.1
billion.
Said Mr Chia: "We need a big mindset shift fast or we will be
outstripped by other stronger direct selling markets in Asia for a
large share of the global industry pie."
Multi-level marketing (MLM) and single level marketing (SLM) are
the two forms of direct selling practised in Singapore. Consumers
still tend to confuse the two forms of direct selling with pyramid
selling, which is prohibited in Singapore.
"Direct selling is the sale of a consumer product or service,
person-to-person, away from a fixed retail location. It is a
popular alternative to traditional employment for those seeking to
supplement their household income, or whose responsibilities or
circumstances do not allow for regular part-time or full-time
employment," said Mr Tan.
Pyramid selling on the other hand, requires participants to make a
lump sum payment upfront to join the scheme, and the driving force
to recoup the initial fee is the recruitment of more members,
rather than the sale of goods and services. Many participants lost
huge amounts of money under the scheme, and subsequently an Act was
passed in 1973, declaring pyramid selling illegal in Singapore. -
TODAY
http://sg.news.yahoo.com/060927/5/singapore232742.html
with reference to the above text, some so-called MLM seems like
pyramid selling rather than MLM companies... 
