Companies follow many ways to sell their products, Advertisements, Branding, Promotion, Campaigning etc. Direct Selling or Network marketing is also one of them. In this, company use their customers as sales representative and if they help them for their product sell, they will get commission. To earn big money, people sell the products to their friends and relatives, which in future create a problem. Although, this kind of marketing is very much successful in other countries but why this model get failed in India. Let me explain with some factors
Friend is Customer: We are making friends on our own and when we start any business or anything new, we share with our friends first. Sometimes it is for financial benefits or sometimes for appreciation only. Friends, with whom we cherish foods, studies, games and many more. Now after getting into Direct Marketing, we start seeing them as prospects. To gain financial benefits, we used to try every trick to get him into business. Many times we do Emotional Blackmail. In India, people are ready to kill their time with friends but do not like to give any financial benefits.
Lacking of Self Believe in Product: It has been observed that product sold through Direct marketing are not common products or many times it is not very useful for common man. If they are consumer products also, they are highly priced compared to their competitors. In India, people never get into it for products, they are very much interested in commission by selling products. This is the main disadvantage that they are not able to sell the product with confidence.
Wrong Approach: If we observe the company instruction or procedure to selling is quite very good, but many people never go through it completely. People think that it is quick rich scheme. The more you sell, the more you get. So they are trying unconventional approaches to sell products. Like, emotional blackmail, forcing people, mentally torture, keep calling people. New salesperson, who get into this, used to have some experience person to provide info. The only job of salesperson is to call his prospects. As there is lack of self belief, they call their friends by hook or crook. They call them for lunch, dinner or drink and surprise them with business plan. This make prospect as cheated or fooled.
Greedy for Financial Freedom: There is another reason for which people get into this type of marketing, i.e. Financial Freedom. What is financial freedom, that is if you do not work also, you will get money. People will work for you by adding hours. Simple concept, if you have 10 people, who work 8 hours daily along with you then cumulatively, it is 88 hours per day. It is in theory but in direct marketing, it is not the case. There are many people who do not work as they get into it because of force or fear to lose friendship. Also nobody likes that if he is working and his friend is getting benefit without doing anything.
If I take example of any organization, we might feel that we are doing all the work but our boss is getting benefit, but in actual he is doing some other task as his role is changed. Same with CEO of the company, his job is to get work for his people. So in my terms there is no term called “Financial Freedom” in that perspective. According to me “Financial Freedom” is that if you are sick for one week or you are on vacation for few days, then too, your earnings are not going to stop. In that case every person who is doing job is financially free for few days. We all have casual, sick leaves. If we are on vacation or sick, our salary does not get deducted. Today, Ratan Tata, Ambani, Aditya Birla, they are financially free, but not sitting idle. We need to understand this.
Bad Investment Procedure: You have heard many people that they lost a lot of money in Direct Marketing may be 10 times of the cost of product which they purchased to get in. How? The answer is that they approached their friends and show them that if you work for 1 year, you will (instead of can be) get X amount of income. Many friends say that you invest for my behalf and I will return once I get my money back through commission. We invest for them and he will never come back or stop picking up your call. Many people think that it is Pump and Show business. We buy car, house or any expensive things and tell our friends, relatives, colleagues that you got it from direct selling. If you get into this, you can also get all these things in very short span of time.
If you ask me that whether direct marketing is good or bad, I can say that it is good but not in India because people are not understanding it correctly. It is successful in other countries because relations are not that much strong over there or they do not do hook and crook method to sell products. They walk slow, took it as business and know that return will come after investing good amount of time. When we open a shop, we can not expect that in few days we will have multiple franchisee in all cities. It may take years or sometimes never happened, depending on the efforts we put.
“Direct Marketing can be Financial Freedom, if it does in correct way else it is Financial Trap”