Sunday 27 July 2008

That is exactly the point my friend

That is exactly the point my friend. People in the top of the pyramid only make money. And Raja Naren is no different. After enrolling a couple of members he passed on the baton to his downline members and they continued to bring commissions to him. That is why the Chinese government banned receiving commissions and naturally Amway could not continue its operations there. The company survives solely on high prices and makes millions if not billions. The tall claims of superior quality of Amway products was proved wrong when a district consumer forum of Krishna district in Andhra Pradesh fined heavily after it was conclusively proved that Nutrilite, is an adulterated product, misbranded and high priced.
The Amway claims that it is resorting to direct sales. Any direct salespersons never collect membership fee. Direct sales means the company directly selling its products eliminating the middleman. Here is the upline members are middlemen who collect huge commission.
Referring to the Andhra Pradesh High Court's comment on vicious circle, the induced members are compelled to buy products and sell them to the downline members in an attempt to garner more commission. They try to induce more members to join the scheme. If that is not vicious circle what else is my friend. I agree that it is easy to come out but the lure of huge commissions and inducement and above all, the 'attractions' of holiday trips and others force them to hook to the scheme.
Everyone refers to the 2003 circular of Union Ministry of Consumer Affairs and conveniently ignore the rejoinder sent by the same Ministry contradicting its earlier circular.
And the Supreme Court of India clearly stated that it is the clear case of multilevel marketing and the police could continue their investigation and file the report in six months. It is another matter that the police have taken more time to file the chargesheet in Amway case. The case is pending in a Hyderabad court.And it is anyone's guess what would happen to that case keeping in view the High Court judgment in this regard.
It is rightly pointed out that the Amway has to up its game, since it is the game of deceit.
People have learnt that Amway has the dubious distinction of pioneering the most deceitful model in India and it is being followed by many such fraudulent companies like Herbalife, GoldQuest, Tianshi, V-Can Network and many more. People are now realising the fraudulent operations and slowly coming out of it.
People who garner easy and quick money never accept that it is a fraud pulled on people. And no wonder they try to justify their acts.
The easiest thing in the world is to convince oneself that one is right.

1 comment:

IBOFB said...

So let me get this straight. You believe it is wrong for someone to earn an income from a business they spent years developing, if they are no longer significantly working that business personally?

As for your other points, you clearly have little understanding of the business model if you believe Raja Naren "enrolled a couple of people". He would have had to do an awful lot more than that.

As well as not understanding the business model, you apparently have very little understanding of the company itself. It's revenues exceed US$7billion. The largest market of which is China, a country where you claim it couldn't continue operations!

What else have got wrong?

1. You claim "upline members are middlemen who collect huge commission". Huge commission? Raja Naren's "commission" on most of his business is less than 4%, and a substantial portion less than 1%. Not exactly huge.

2. "members are compelled to buy products". False, there is no compulsion and the statistic clearly show most do not buy many products. Reality proves that claim wrong.

As for Nutrilite, it's quality is unparalleled. The Krishna consumer forums was regarding some issues with only a small number of Nutrilite products. To put the "seriousness" of it in perspective, the fine was a whopping 1 lakh. Of note of course is that in India, Amway is forced to manufacture many of their products through third party manufacturers, where they have less quality control. This as done because of government requirements, not of choice. Nutrilite has won many independent consumer awards. It would appear however that to your mind a minor fine in a minor court outweighs the opinions of the hundreds of thousands of people surveyed about Nutrilite throughout Asia, and the research of many respected independent companies such as Consumer Labs in the United States.

But still, I think your first point is the most revealing, and it's the one I'd like you to address. So I'll repeat the question.

Do you believe it is wrong for someone to earn an income from a business they spent years developing, if they are no longer significantly working that business personally?