Today I have 5 points to prove that Network Marketing is a fraud in India. These facts and Truths will never be told to you in these Companies.
They are just trying to add people into their Trap. They are just concerned about your Investments in their Companies.
However, if you disagreed to work in this scam then these Network Marketers will call you ‘Low Mentality People’. Let me explain in 5 points that how much Brainless People these Network Marketers are-
5 Points to prove that Network Marketing is fraud
1. Price Fixing/Price Control
Network Marketing companies claim that they give commission to their agents instead of traditional marketing (or advertisement). But the big question is that they are selling low-value products at a high price.
Network Marketing companies set their own prices for every product in the market. The Selling Price of their product varies too much as compare to Cost Price. The price of Products of these Networking Companies is manipulating the Demand and supply of the Market.
They are creating forced Demand by creating forced Sales. These Companies said that this is a Business in which they will give you products in exchange for money. Let me show you the Reality of their Business with the help of an Example-
Vestige and Forever Living are some of the fraud Network Marketing Companies in India, Let’s compare the prices of their Toothpaste with India’s best Brand Colgate.
Colgate Toothpaste Price-35.2 rupees/100g
Vestige Dentassure Price-175 rupees/100 gm
Forever Living Tooth Gel Price-233.85 rupees/100 gm
You can see that we can buy 5-6 Colgates at the same Price. These Companies claimed that they are giving money to their Agents in form of their Advertisement Expense. If these Companies advertise their Products I guess no one is going to purchase their products. The price of their products is 5 times the price of the best Brands(above example) in India. They will give you a 100 rupees cheque on purchasing products of 5,000 rupees which you can’t redeem instantly.
Even Departmental Stores like Dmart will give you a heavy discount of 500-600 rupees. This is the truth of these Companies in India. These Companies will never tell that fact to any agent, the question is Why?
This simply proves that they are Price Scammers.
I just have one line to say-“Do you really think this is the shortcut to become a Millionaire at an early age? This is the way these Companies are making you Entrepreneurs(fake Entrepreneurs)”.
In countries like the United States, Canada, Australia, New Zealand, the United Kingdom, and the European Union. Price Fixing is a Criminal Offence.
Price Fixing is allowed for only specific products like Coronavirus Vaccine. These products need special permission from the Government.
They will tell that their Product Quality is good that’s why their products are expensive? I will answer this question in the next Point.
2.Product Quality Scam
The products of these companies are not even FSSAI approved and the above Toothpaste is not even approved by the Dental Association of India. The burning question is How a Company can manufacture Products of every Product line? Other Companies are fools that they are focusing on Manufacturing of only one Product line.
Good Companies are concerned about Customer reviews and feedback. Good companies will always work on the improvement of their Products. But the focus of Network Marketing Companies is Recruitment of Agent rather than actual Sales. Let’s talk about this in the next point.
3.Focus on Recruitment than Actual Sales
The focus of these companies is on adding more and more Agents. The agents are provided with a script in which there are topics like How to start a conversation with a Stranger, how to Introduce your fake Income and fake Lifestyle to people. Their conversation may start from motivating you to do Business(this is not a business, it’s called Scammed Sales).
They call themselves Entrepreneurs and update it on their Social Media Profiles and tell people that they have a great scheme to earn lakhs of money. They will show you their fake cheques on their Mobile Application or on Mobile messages but they will never show you their Bank Passbooks.
I made a detailed article on this topic-‘Fake Entrepreneurs‘. There is no entry barrier in these Companies, they are always happy to add more and more members/agents if members are Investing money every Month to buy those 3rd Class Products.
4.Exploitation of Personal Relationships
If you are to forcing some to join a business or forcing them to buy unwanted Brand Products then this will definitely impact your Personal Relationship with Friends and Family.
Even there is a website on Google and Instagram Pages where the Victims of Network Marketing share their Stories. They discussed their wastage of huge Investments every month, wastage of time and ruining of their Social Life in the Society.
5.Leading Distributors make major Money
Network Marketing is working on the 99:1 Principle. The top 1% of people are earning 99% of the money. This simply means that the top 1% of people want others to join the Company. The Irony is that the top 1% of people are earning from the money of 99% fool agents of the company.
They are not concerned about your future. They just want your Investment in this Scam. The leading Distributors will show their luxurious lifestyles but remember one thing everyone should not be like them. There are very few success stories and are questionable too because there are no income stats available.
There are very good alternatives available in the marketing for online earning other than Network Marketing. Some of them are affiliate marketing, Video Marketing, E-books, Courses making are some of the most prominent ways to earn passive income.
I’ll post more videos about ways to earn online on this website so please subscribe.
Is Network Marketing free of Cost?
NO, Multi-level Marketing/Network Marketing is not free of cost. To follow their Scheme, You have to buy their products even if you don’t need them. Now let’s assume that you agreed to buy their Products. Their Products cost 2-3 times more expensive than the best products in the market(proof). You have to invest in their products every month.
For example, if you are purchasing products of rupees 5,000 every month then you are actually purchasing products of rupees 2,000 according to Market Price. Now the agent MLM will suffer a loss of rupees 3,000 (5,000-2,000) every month.
If you continue this business without adding members for a year then your yearly loss will be rupees 30,000 (excluding the 3rd quality products).
If you add members to this chain then they also have to suffer loss. The scheme promotes the loss of money on a big scale for the agent and profits to the Company only.
Because of this, maybe the member added by you will leave the company early and you have to suffer the same losses again.
This is how MLM extracts money from innocent people and of course, it is not free of cost in monetary terms.
You also have to face so much criticism from your friends, family, and Society. As everyone considers MLM as a scam as it is a scam. So, MLM will definitely hamper your personal relationships. People even want to go away from you if you approach them again and again.
Cashkaro is a referral marketing program in which you have to invest 0 money. You will earn money only by online shopping and online recharge. The best part is that if you refer to anyone else then you will get 10% lifetime commission for your referral’s earning.
If your referral has 10 person under them then his earning will be very high. Therefore, your earning will also be high.
Adding more and more people after explaining to them the scheme will help you get very high profits without any investment.
Cashkaro is also a passive income source and it is totally free of cost then why should I join MLM? Why you are wasting money every month for the thing you are getting for free.
There is no compulsion of buying products of a particular brand. You can do any kind of online shopping and you will get cashback.
Why Network Marketing Companies do not advertise their Products?
According to MLM company’s business model, They do not advertise their product because it incurs a very high cost. Every company spends around 6% of its total revenue on marketing and advertisement activities. But MLM companies suggest that they are directly distributing advertisement expenses to its agents directly.
The reality is that MLM wants to just promote its scheme to add more and more customers and agents. The product quality is so poor and the products are so expensive that they can’t advertise their products anywhere. It’s just a wastage of money for them. Their Scheme just promotes to buy their expensive products.
One of the examples is-:
Rate of Toothpaste by Best brand (Colgate) in the Market (per 100 gm)- 35.2 rupees
Rate of Vestige(MLM) in the Market- 175 rupees
Rate of Forever Living(MLM) in the Market- 233.85 rupees
Rate of Amway(MLM) in the Market- 113 rupees
I think this is just an excuse that MLM companies are distributing advertisement expenses to its agents because a product that costs 5 times the best brand in the market then It’s like you are promoting their product by giving them your own money.
JIO advertises its SIM for free in the initial days. They are taking no money to promote their products. People themselves advertise JIO Sim, This is called Mouth marketing. JIO did this for free because they know that their product has to potential to sustain in the market for a long period of time but MLM Companies take money for the same thing.
Is Network Marketing a Business?
Entrepreneurship is the formation of a new Business by Innovation and Creativity.
But Networking Marketing proved it wrong. The agents of network marketing call themselves as Entrepreneurs. That agent is just a sales employer of that Company. Is there any Innovation or Creativity given by the Agent? Is there any role of the agent in the decision making of the firm?
This means every seller near me is an Entrepreneur. So may I start calling the Tea seller near me as an Entrepreneur. But there is one thing Tea seller is earning more than a Network Marketer.
The products by these network Marketing companies are not even FSSAI marked. They are making products of every product line. How we can trust them? How we can consider their products as hygienic?
They say that they do not advert sees their Product on TV and newspapers. They say that they give that money directly to their agent. The truth is that the quality of their product is that much poor that it can’t survive in the market. They force their agents to buy their products so that the agents can earn just a 100 rupee cheque.
The thing is that the agents are purchasing the products of rupees 20,000 from the network marketing company’s store. The value of the same products in the market is rupees 15,000.
Why you don’t understand that you are suffering a loss of rupees 5,000. Is that 100 rupees cheque worth for you?
Now let’s talk about their Cheques. The agents get their Cheques on their company’s Application. You will get the amount debited in your account after deducting the tax. Also, the earnings for the network marketer is not fixed. Their income is dependent upon how much impact they did on the sales turnover of the company. The commission they get is also very less.
They are not Entrepreneurs, they are agents who are doing performance-based Sales Jobs.
Now, I can say that MLM is a Scam.
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