Africa, is a growing economy where the consumers believe more in what they see and can feel, coupled with the fact that the internet is still not as popular and trusted as it is even in London alone. Many Multi Level Marketing companies like “GNLD”- an American nutritional company and “Tianshi” – a Chinese nutritional company, even the “Forever Living Products” and many more have been in Africa for a long time. How profitable have these businesses been to Africans and how profiting could Network Marketing business in Africa be in an Environment like this especially on the Internet Marketing platform?
What is Multi Level Marketing?
Multi level marketing is in other words called network marketing. In this kind of business, franchising and direct selling are combined. There is an independent transaction approach between the individuals and the companies involved. In this approach, the company creates a contractor relationship to the person who wants to expand his business.
In this kind of business, the members make their earnings based on the sales they have accumulated in that particular product or service. It also includes the sales of the person that they have recruited to join the business. Most of the time the individual who has recruited more members and provided a good sales output on the product compensate higher because of the effort to transact in two different fields.
The “pyramid schemes” or Ponzi schemes.
There are “pyramid schemes” or Ponzi schemes, which are considered illegal. Most people associate Network Marketing to these kind of schemes because they also recognize themselves to be a legitimate networking business. Because of the bad image brought up by these schemes, many prefer to use their names for their businesses as “home based business franchising” or “affiliate marketing”.
Commissions and criticisms.
Commissions are earned in the process of selling a particular product or service in a legitimate network marketing. There can be no earnings in what they call as a “sign up fee” or for just recruiting yourself alone. This kind of marketing is always criticized because of the questionable recruitment process where they get their revenue and profit. They get their sales from members and new members, which are considered the end users of the product and as the distributors.
These criticisms led to the major changes in Network Marketing in the early 1980s when many companies have started to allow their members to concentrate only on marketing and not on distributing or stocking the product. Most Network Marketing businesses now act as fulfillment firms by taking the tasks of shipping the product, paying the commissions and taking orders from their clients.
Many people who are victims of the illegal schemes in Multi level marketing are required to buy expensive products, but most of these schemes do not last long because most of the sales are not easily resold.
Let us know your Experience.
However, any Network Marketing business in Africa that pays well to the affiliates and promoters is highly needed in Africa to create more jobs and reduce unemployment. So, if you have experienced any profits or loss in this kind of business in any part of Africa; Nigeria, South Africa, Ghana, Kenya etc let us know your experience by living a comment bellow. If you have Multi Level Marketing business that really works in Africa, let us know.