MLM-NETWORK MARKETING - HISTORY & CONCEPT
The world, as we know of today, has evolved through three phase which we call primary, secondary and tertiary economies. Initally, in the primary economy stage, all activities were based on agriculture and related activities. Then came the industrial revolution and people started coming into cities for manufacturing and related activities/ industries. But with the advent of technology, manufacturing has largely automated and manufacturing costs have been consistently dropping over the ages.
Today, you will not find people excited about setting up a manufacturing unit. Today is the time, when everything is oriented around the service industry, where the large sector today is the distribution industry. The No.1 company in the world today is not from manufacturing, or oil, or even software but Wallmart, which is involved in the business of distribution, Let me give you an example.
Earlier, if a product costed Rs.100/-, its manufacturing cost would be 60-70/- Rs. And 30-40 Rs was consumed in distribution. But with emerging technologies and countries like China playing a major role, the product cost today has come down to Rs.30-40 and the bulk cost has shifted to distribution. In fact, even large companies, that used to manufacture and sell, are today outsourcing manufacturing and focusing on just distribution, which is the key to wealth in the future.
There are two ways in which distributions happen. Today, if you go to buy a television / car, the sales man who is promoting the sale is himself most probably not using that product. This is where the difference comes in between network marketing and normal distribution. Network Marketing is done person to person by someone who is himself using the product, unlike the car salesman. The Network marketer is an educated, enthusiastic, experience user of that product. This is an industry that is relatively new and is growing at a pace, which is faster than any other industry. To give you an idea, let me give you an example. The first IBM PC came out in 1981and by 1990 PC sales exceeded automobile sales. In 1990 no one knew what the internet was. By 2000 most of the new millionaires in the US and Europe were being created by the internet.
Today, this industry is worth more than 450000 crore rupees internationally. The population of USA is 30 crore where this industry is flourishing the most and the only thing that determines the success rate in this industry is population. The population of India is 110 crore which is almost 336% of the US. Unfortunately, in India, this industry has been plugged with a lot of misconception that has given it a bad name. There is nothing wrong with the industry. But people are using this industry for their own personal games. Today most of the product being sold in the network marketing industry are actually an eyewash and the real motive behind them is to make money. This shortsighted approach results in shortsighted results, that is, closing down of the company. In Network Marketing today, people are selling product which people don't want / need, at prices they can not afford for reason that are morally and ethically wrong.