Multi Level Marketing: Does it Lead to Exploitation of Relationships?

Abstract

The Multi Level Marketing, first popularised by Amway, in 1950s in USA is gaining momentum in India. The India Direct Selling Association (IDSA) has projected that the Multi Level marketing industry will be around Rs 53,200 millions by 2012. Studies have shown that consumers often have negative perception of direct selling organisations and Multi Level marketing organisations in particular. The aggressive selling techniques, exaggerations of facts in recruiting, pyramiding scams and unethical way of exploiting relationships all together form a basis for this negative perception. The paper presents the reports evidence from a survey of respondents who work in MLM whether the relationships are frequently exploited in MLM. The evidence suggests that relationships i.e, friends, relatives and colleagues constitute main clientele base and network in Multi Level marketing in India.

Keywords: Multi Level Marketing, Pyramid Schemes, Negative Perception