With Chennai Police opening investigations on QuestNet/Goldquest MLM company, and over 10000 victims filing complaints, operations of
such companies which promise an easy wealth creation for everyone involved, are again under scanner. Hundreds of network marketing companies are operating in India, each calling itself unique, genuine and best. Each of them may have their pros and cons and while we may not have specific legal backing to term their operations illegal, caution is advised before getting associated with these companies. I’ve already published two reviews on this issue and in this post, let us see why most of these companies face trouble over a period of time.
During early stages, all goes well and it will be difficult to sense the trouble ahead. Because most of the companies will have some products to cover their money schemes, because there’re no laws which declare this kind of operations illegal, because MLM promoters manage to get some high profile persons on board to show their credibility all goes well during early years. As the idea is new it spreads like wildfire and thousands of people would sign up every day. Obviously few early joinees make huge money in this process and seeing them buying luxury homes and cars only propels the greed of new joinees who start promoting the scheme with all new energy and aggression. But then, market reaches a kind of saturation and it won’t be possible to enroll new people, at the rate it was possible in the early years.
This is when the trouble begins. The concept of MLM survives on the belief that the chain continues to grow sine die in a never ending fashion and existing people do not leave. But unfortunately this won’t happen. As the saturation is neared, desperate members start resorting to unethical practices with a sheer greed of making quick money. Some examples of unethical practices are as below:
Continue reading at www.enidhi.net/2008/05/11-reasons-mlm-companies-go-bad.html