Multi-level marketing in Vietnam

In modern life, multi-level marketing brings many benefits and there are many opportunities for multi-level marketing to be developed in Vietnam

Snapshot of Multilevel Marketing:
         
Multi-level Marketing (MLM) is referred as a retailing network in which the distributors (usually self-contained businessmen and women) put the products or services for sale to reach sales goal. It was initially presented together with door-to-door selling in 1945 by California Vitamin Company (renamed in 1939 to Nutrilite) specializing in selling multi-vitamins. Unlike other traditional selling, the independent distributors often choose to build up their “sales force” (usually referred as “their downline”) through recruiting more sales assistants to achieve their expected sales. In other words, distributors’ compensation is not only based on their own turnover but also the entire sales amount of the other salespeople they recruit. The other marketing strategies including network marketing, pyramid selling and referral marketing are also considered as the most popular types of multilevel marketing.
        However, pyramid selling is defined to be illegal by the law when it comes up with its operation schemes. This marketing practice differs from MLM in one aspect, which is the MLM’s means of making money at a separate level with no presence of patronizing representatives at lower level. Moreover, the major products and services put for sale in MLM strategy are usually the home merchandises, which most of households typically use in their daily life such as the tools essential for personal care, pet care, beauty care or home maintenance. Though several multilevel marketing activities are specified as the legal business acts according to the “Competition Act”, there are some definite things described as below for people, who want to join this business form should take notice of:
It would be a great fit for independent businessmen/women if:
     - As for merchandise buy-back, they get to sell the secondhand goods at nearly 90 % or even more of the purchasing price.
     - They can join this business type with no need for paying any additional fees of membership, promotion, training or education.
   -  Their profits are reasonably generated in accordance with how much time and efforts they put in selling products/services.
     -  Its business core is not recruiting more distributors, but focusing on the end-users.
         In short, multilevel marketing bases on one simple idea, which means that if you have a product to put for sale, you will sell it directly to your clients or give the other people a chance to purchase your product and then sell it back to their consumers. In order to perform this duty in the best way, a wider consumer base needs to be built up through combining the relationships expansion and mouth marketing, which are the key factors for reaching the sales goals in such a challenging business industry. 
         Another great feature of the MLM scheme is that recruiting more salespeople as your “downline” does not mean that you will have more competitors in the same industry since you will get a cut of their gains for each time they sell the products/services successfully. As usual, they are not really the ones who purchase and sell your products but also recruit more people to rise up both of their own sales and your entire sales.
Benefits of Multilevel Marketing:
        MLM programs are the great businesses for the independent salespeople to get in and take advantage of their own sales & marketing skills to make not just money but their own business. There are 5 core benefits of MLM program described as follows:
        - Low risk: The start-up cost of opening a business is not as high as that of the traditional ones. Thus, its financial commitment is not a considerable thing.
         - Low overhead: It allows you to run business at a low cost. Most products/services orders are taken through the act of sharing catalogues or online sale.
       - Freedom: It’s also the dream every businessman/woman tries to pursuit since they do not need to come to the office and work full-time for the day.
         -  Portability: No matter where you are, you can use your computers or cell phones to keep doing business.
         - No employees: Unlike the traditional ones, this type sets up an organization, in which independent working people take part and gain profits. 
Multilevel Marketing in Vietnam:
       Back to 1998, this business model made its first appearance in Vietnam and then started to spread out over the country in the next 5 years. Until now, MLM has been growing rapidly throughout Vietnam with the presence of 45 domestic and international MLM companies in many cities and provinces.
        In the next 6 years, 32 MLM enterprises showed up with more than 1000 product lines ranging from household items to cosmetics and food products. The majority of products/services in Vietnam derive from foreign countries such as some popular MLM enterprises like Herbelife, Vina-link Group in food, Oriflame, Avon in cosmetics and Amway in both cosmetics and household items. MLM strategy does not only create many job opportunities for Vietnamese people but also improve massively their life quality and increase considerably the Vietnam State budget.   

By Mỹ Anh on Jun 21, 2013 8:42:56 AM

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