Direct Selling Industry Exposé: The Truth About Multilevel Marketing

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Direct selling is one of the oldest known forms of commerce, but critics have been very successful in opposing the industry. Unfortunately, rumors spread like wildfire, and many people now confuse direct selling and multilevel marketing with pyramid schemes.

To be clear, pyramid schemes are illegal, and it’s important to avoid falling prey to their manipulation. They rely on salespeople investing in the company and recruiting more members.

Direct selling is a legitimate and legal business method that includes multilevel marketing (MLM).

Direct sales is defined by the World Federation of Direct Selling Associations as “a retail channel…to market products and services to consumers”.

The three main types of direct sales are as follows:

  1. D2C sales
  1. Single-level marketing
  1. Multi-level marketing

Single-level direct selling is sales with a one-to-one ratio of salesperson to consumer.

Direct-to-consumer selling involves getting your product seen by as many eyes as possible, usually through a website or social media.

Multilevel marketing is the same as single-level sales with one notable exception: sales representatives and distributors also earn money from enrolling more distributors. Similar to referral marketing, multilevel marketing makes use of the power of word of mouth while leveraging social networks.

Misinformation and disinformation about direct selling are bad not only for the economy, but for future entrepreneurs as well. We will explain what we mean by “direct selling industry”, and hope that in doing so we can answer any questions you may have about the industry.

The Indian Direct Selling Association

A man in a black suit arranging icons into a pyramid shape.

Direct selling is a channel of commerce for the exchange of goods or services. Direct selling is a highly regulated industry that encourages ethical commerce at every step of the supply chain.

The direct sales supply chain is small, because the sales model eliminates the need for intermediaries or middlemen. You purchase the product from your company and then sell directly to your consumers.

The Indian Direct Selling Association (IDSA) works to regulate our industry along the “highest global standards for responsible and ethical conduct”. This autonomous association maintains communication and ethical conduct across the industry as a whole in India. IDSA representatives are the liasons between the policy-makers of the government and industry representatives. The IDSA ensures credibility, clarity, and confidence for our industry.

The Direct Selling Industry

The two factors that make direct selling such an attractive industry are:

  1. It’s customer focused.

The goal of direct sales is to get your product or service into the hands of your consumers. This means less intermediaries in the supply chain and more income for you. This direct selling marketing strategy also gives you the chance to build relationships with your clients, rather than being a faceless corporate entity. We cannot overstate the trust and authenticity that direct selling can build.

  1. Anyone can do it.

The direct sales industry is massive, because it’s for everyone. How massive, you may ask? In 2023, direct selling companies were projected to earn over $750 billion in revenue.

This industry is equal opportunity and there are few start up costs. Direct selling also requires no overheads, because you are the business and you can work from wherever you are. You are your own boss, you set your own schedule, and you can market and relate to your consumers in whatever way feels authentic to you.

Get Involved

There are many direct selling companies on the market today, and not all are created equal. Our mission is to end the disinformation about direct selling and help steer readers to trustworthy sources. We encourage you to follow our tips for spotting disinformation. Please contact us if you find something of concern.

As always, we encourage you to be wary of disinformation and illegal pyramid schemes.  Understanding the difference between legitimate methods of direct selling such as MLMs vs illegitimate methods like pyramid schemes is, therefore, crucial!

Learn more about how direct sales could benefit you now.

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Fighting Disinformation, with Awareness, Knowledge, and Action