Hi, i have been invited to a MLM company to be a biz partner. i
do have some question wrt the legitimacy of the biz.
Please refer to
https://app.mti.gov.sg/data/pages/81/doc/MULTI-LEVEL%20MARKETING%20AND%20PYRAMID%20SELLING%20%28EXCLUDED%20SCHEMES%20AND%20ARRANGEMENTS%29%20ORDER.htm
This question is wrt paragraph 2(c)(i)
story: This MLM agent told me that i needed to pay a one-off sum
of money to buy their products to sell. Subsequently, if i needed
to sell more products, i will just have to being the customer to
the warehouse/shop to buy it. She claims that the purpose of this
one-off payment is so that i prove myself, to the company, as a
serious entrepreneur who is willing to work hard to succeed. She
also says that this money represents a start-up capital that every
biz will have to pay.
Q: is this the above practise legal? Do most other MLM companies
practise this as well?
This question is wrt paragraph 2(c)(iii)
Story: the agent said that part of my mission is to recruit and
train more biz partners into the company. After training a certain
number of people, i will be promoted to a rank which promises
passive income. She claims that this income will continue coming in
regardless if i or those that i recruit, make any sales at all.
Q: Is the above legal? Do most other MLM companies practise this
as well?.
This question is wrt paragraph 2(c)(vii) and 2(c)(viii)
Story: The MLM company that i was invited requires no contract
whatsoever. There is also no mention of this gurantee.
Q: Do other MLM company practise this law? Is there a contract
that all you (MLM agents) signed before you are considered an MLM
agent?
1. The practice of Bulk Purchase for network marketing companies
is a standard practice international, unless you are exceptional
lucky to meet 100% ethical independent distributors who only
encourage you to buy just 1 bottle/unit of product inclusive of
membership fee.
Bulk purchase serves a couple of purpose.
I - Shows individual capabilities/commitment
II - Allows both upline (the person who recruited you) and the
company to make profits from your bulk purchase (sales of
products)
III - You with lots of products, will be pushed/financially
motivated to push for sales, in order to recoup your 'Investments',
thus fast forward your learning curve.
2. Mission/Job Scope of Independent Distributors are as follows
(across all network marketing companies)
I - Sell more products to end consumers (create active/recurring
clients who like the products)
II - Recruit and train more downlines to sell more products
III - Train up more sales leaders to expand group sales, in return
for each respective leader's advancement into the higher rank or
hit quota for company incentives.
IV - Over the years of exploring companies, all compaines are only
FOCUSED ON SALES TRAINING, only 0.000001% will concentrate on
actual Business & Personal Development as an Entrepreneur.. |
I'm the exceptional case, thus I don't earn from Network Marketing
due to being too ethical.
V - Never do what they tell you to do (Don't follow blindly)..Join
them only if you see/ can align the company's direction in the same
direction as yours..don't try to fit into a company that force
their will/goals onto you..>> This spells incomptability/Job
Mis-Match
3. MLM Agent VS Independent Distributor
Read the clause clearly..no company/business in the right mind
will immediately declare and allow new recruits without going
through the training and proof themselves to represent the company
and as such increasing their risk of unable to deliver.
That is why majority of the company sales are made
in-house..where senior trainers/sales leaders can make sure correct
representation/message are carried across.
All "MLM Agents" are legally classified only as Independent
Distributors, thus they cannot handle Counter Sales, Admin,
Management documents, which are handled by Full-Time staffs.
The term is used because they are considered
A) Full timers
B) Part timers
C) Free Lance Basis
D) Clients & Members
The word INDEPENDENT states he/she cannot represent the company
in anyway BUT they can help to sell the company products in return
for a commission for every single sales made, which is why all
agents push for SALEs to the extent most become Black Sheeps which
consist of 95%.
4. Guarantee
Network Marketing like any other businesses, doesn't promise any
guarantee with the exception of financial investment products,
which they still have to sign agreement to undertake and risk
involve and discharge the company/bank of the risk involved.
Nobody/company will provide any guarantee.
The best guarantee you can get is to learn how to select the
0.0001% Good Leaders/Mentors/Coach to show you the ropes with
practical examples and hand-holding of coaching.
Disclaimer: I didn't even read the clause
of the link you provide, as I know how the industry from the inside
out (excluding the management/financial/admin side - full time
employees)..from the perspective of a Independent
Distributor.
I hope my replies answers your questions..Feel free to ask more
questions if you're still in doubt.