Tuesday, May 17, 2011

Money Trap.....

Network Marketing or technically known as MLM or Multi level marketing is not a new concept in India. It came into prominence after the advent of US direct selling company Amway. The company’s plan ensured huge return on investment to all the individuals enrolling in the scheme. The plan worked simply on a tree structure, the more the tree grows better would have been the returns. In addition to the commission (and this is a significant statement which will become important later), company also provided a huge set of products which the investor can procure and sell to earn profit. Thus the company benefitted two ways as it was getting the enrollment fee as well as instant market and advertisements for their product lines. This happened by eliminating the whole retail chain in between and the finished product came from warehouse to a number of selling agents on field. If cynicism taken out of context, this is an excellent business model to generate revenue. In the model, the company can have a foothold in market with absolutely no initial investment and will save on advertising front, supply chain management, commissions to retailer etc.

But the model itself generated opportunities for a lot of people to use it for their own interest. A lot of companies emerged, peaked and then disappeared leaving the investors in dismay. It is not that people have not earned from these companies, they have and they have earned considerably well. But not everyone had a piece of pie, a potential number of investors have also lost a fare amount of money. These companies usually operated on the philosophy of luring the investor by promising them quick money and easy money is always the best trap.

A similar company which came to existence a few years back was Gold Quest, it swept the whole nation with its tide. The company did not had any line of product, other than a minted gold coin which was provided after initial investment of around 30K INR and that’s it, the remaining model was completely MLM. A major chunk of the investor actually belonged to IT industry. The best question to gauge the credibility of the organization is what they were marketing for. As expected, one day the company went out of existence and many people lost their money. Still this is a very small aspect of a bigger picture.

Money is a very interesting concept, it is dangerous to keep money still at one place as it will lose its value, it is also dangerous to have uncontrolled flow of money. We seldom give a thought that money transfer from one place to another is not an easy thing, which is why we have ‘hawala scams’. When an investor is providing the initial investment, he is making a legal transaction of that amount from one account to other. Imagine the same scenario with half million investor. The money is now with the company at its disposal to be used in any place, might be financing terrorism, might be….

No firm other than Amway has been proven legitimate as of date. Recently another company by name Speak Asia came into existence. Still I am not sure of it being legitimate as questions have been asked about its credibility and company is in self defense mode. Though undoubtedly, this company has gone in media more than its preceding firms, still there’s always a thought until the verdict is passed.

Money is a biggest trap that exists, it is always preferred to have easy money, but whenever provided with the opportunities, we should surely think and assess it once.
As there is nothing like "Easy Money" that exists and is devoid of any sin.

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