All multilevel marketing schemes, whether it is Amway, Herbalife, Tianshi, GoldQuest, or V-Can Network, are money circulation schemes being conducted in the guise of product sales. The camouflage may vary from scheme to scheme and company to company but they are illegal attracting the provisions of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978.
For instance, Amway claims that its business is direct selling. It promised to the Government of India that it would bring in foreign direct investment into the country. As per the information furnished by the Reserve Bank of India, from 1994 to 2006, the Amway has brought in only Rs. 18 crore of foreign investment. But it stated in the affidavit filed by it in the writ petition before the Andhra Pradesh High Court that it invested in excess of US$35 million (151 crore) in India which is patently false.
The term direct selling presupposes that there is no intermediary between the manufacturer and end-consumer. Commencing its commercial operations in India, the Amway, instead of selling goods direct to the end-consumer, has floated this multilevel marketing scheme of enrolling members by sponsoring and introduced many intermediaries in the name of distributors, encouraged its members to sell the articles with retail profit of 20 per cent apart from other performance bonuses. In fact, the Amway is not selling the products direct to the end-consumer. The truth is that the consumer cannot purchase products direct from Amway without becoming its distributor.
Let us explore more of its exploitations in the next instalment.
For instance, Amway claims that its business is direct selling. It promised to the Government of India that it would bring in foreign direct investment into the country. As per the information furnished by the Reserve Bank of India, from 1994 to 2006, the Amway has brought in only Rs. 18 crore of foreign investment. But it stated in the affidavit filed by it in the writ petition before the Andhra Pradesh High Court that it invested in excess of US$35 million (151 crore) in India which is patently false.
The term direct selling presupposes that there is no intermediary between the manufacturer and end-consumer. Commencing its commercial operations in India, the Amway, instead of selling goods direct to the end-consumer, has floated this multilevel marketing scheme of enrolling members by sponsoring and introduced many intermediaries in the name of distributors, encouraged its members to sell the articles with retail profit of 20 per cent apart from other performance bonuses. In fact, the Amway is not selling the products direct to the end-consumer. The truth is that the consumer cannot purchase products direct from Amway without becoming its distributor.
Let us explore more of its exploitations in the next instalment.
1 comment:
Oh dear. Now you've resorted to making up your own definitions of things and then attacking others for not fitting your definitions.
To quote from the Indian Federation of Direct Selling -
WHAT IS DIRECT SELLING ?
The sale of a consumer product or service through personal contact, away from a fixed retail location or shop.
It does not "presupposes that there is no intermediary between the manufacturer and end-consumer."
So you've made up your own definition and now blame direct selling companies for not fitting yoru definition!
Ignorance or arrogance?
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