Amway demands legislation on direct selling

Amway India, a wholly-owned subsidiary of the US-based Alticor Inc, has demanded a legislation on direct selling to ensure that consumers are not duped by the fly-by-night operators and the business model of direct selling is not viewed with suspicion.

"There is a need for the government to come up with a legislation on direct selling in the country. Gujarat has had its fair share of scams involving direct selling companies. That has shaken the confidence of people in this business model," said Stephen Beddoe, director - distribution relations and marketing for Amway India Enterprises.

Listing down the major differences between fly-by-night direct selling companies and genuine ones, Beddoe said that good direct selling companies worked on strong ethics, unlike their lawless counterparts.

"Also the monetary gains in fly-by-night companies depend on the stage that a person enters the chain, while in the case of companies like Amway, it depends on the amount of work and effort that one puts in," Beddoe said.

He added that another point is the costs involved at the start up stage.

"In case of fly-by-night companies, the start up costs are indeed huge, while they are very low in case of genuine companies. Also, direct selling companies that dupe people often do not have any products to offer, while genuine companies have a huge portfolio of products on offer," the Amway official said.

The Amway sales and marketing plan is a low risk, low start-up cost business opportunity that is open to everyone, Beddoe stated.

"It allows people to build their own business through retailing products and sponsoring other people who, in turn, can retail products and offer the business opportunity to others", he said.

By passing sales and marketing knowledge to the team that one develops, an entrepreneur not only builds his own business network but also enable others to build one of their own, the Amway official said. He added that the core of the Amway sales and marketing plan's income opportunity is the sale of quality Amway products.

Beddoe said that the direct selling model offers greater benefit to both the independent business owner as well as the consumer because in case of FMCG products, the conventional marketing has the manufacturer earning a 30 per cent profit, the clearing and forwarding agent making a 10 per cent profit, the wholesaler making a ten per cent profit and the retailer making another ten per cent profit.

"In the case of direct selling, the manufacturer makes a 20 per cent profit and the independent business owner another 20 per cent before it directly reaches the consumer," Beddoe said.