Thinking of joining a direct-selling or multilevel marketing company? Don’t be so quick to jump in. Here are some things to always remember.
[related|post]In the Philippines, there is a general misconception that multi-level marketing (MLM) or network marketing is equivalent to “pyramiding schemes.” MLM is a form of direct selling, where people earn not only from their sales, but also from the sales of the people they recruit to join the selling network.
Two experts in the direct selling and multilevel marketing (MLM) industry share pointers to determine the difference between a legitimate direct-selling or MLM company from pyramiding. Consider the following tips before committing to avoid being scammed or ending up with an unsustainable venture.
Make sure they’re registered.
“Every company or enterprise must be registered with the Securities and Exchange Commission or the Department of Trade and Industry”, says Ador Bonquin, country manager of Amway Philippines. One can simply log on to www.sec.gov.ph or www.dti.gov.ph to check if the company or enterprise is registered.
Also, according to Dr. Ed Cabantog, president and CEO of Alliance In Motion Global Inc., affiliation with respectable direct selling or multi-level marketing associations should also be considered. The Direct Selling Association of the Philippines (DSAP) is the national trade association of direct selling and network marketing companies engaged in the business of person-to-person selling.
Bonquin, who is also the current chairman of DSAP, explains that DSAP follows strict guidelines before accepting companies to be part of the association. While non-membership with DSAP does not mean that the company is not legitimate, membership adds legitimacy to the company.
There must be a product and reasonable joining fees.
Both Bonquin and Cabantog emphasize the need for a legitimate MLM or direct -selling company to have a product that is actually being sold. However, it is not simply having a product. The product must be considered as a “value-for-money” product, which simply means that the product in exchange for the registration or joining fee must have equivalent, if not higher, peso value. For example, if you are paying P10,000 for a product valued at around P2,000, do not join that particular MLM company selling the product.