According to QNET, the direct selling industry is sometimes portrayed in a way that is a little misleading or erroneous. At times, the media conflates direct selling with pyramid scheming, creating the illusion that a direct selling company is some kind of a scam. In reality, of course, just the opposite is true—but making this mistake does damage not only to legitimate direct selling companies, but also to consumers.
Defining the Terms
For those who are not familiar with the concept of direct selling, it is really fairly simple. QNET defines it as selling products to consumers in a face-to-face setting, as opposed to in a traditional retail setting (or online). It is true enough that the selling takes place via a network of distributors, yet, crucially, direct selling is markedly different from pyramid scheming.
- Direct selling is never presented as a get-rich-quick scheme. While there are some who become quite wealthy through direct selling, this only happens over time and through plenty of hard work.
- Direct selling companies have legitimate, high-quality products they can show; pyramid schemes typically do not.
- Direct selling companies offer thorough training to their distributors; however, pyramid schemes do not.
- A direct selling company offers commissions based on sales, not on endless recruiting. Here, the emphasis is on providing consumers with products; whereas, a pyramid scheme is really just focused on bringing in more recruits.
- Direct selling companies have strict codes of ethics. Pyramid schemes are, by definition, unethical.
Despite these myriad differences, there remain many who view direct selling and pyramid scheming as being similar, if not exactly the same. QNET, in particular, has received some unflattering portrayals from members of the press, regarding an incident that happened in Mumbai.
Here is what happened, in brief: A woman in Mumbai alleged that representatives from this company sold her a product, claiming it would cure her son’s brain damage. She never actually paid for—or received—the product; in fact, she bought an entirely different product, and even then her husband cancelled the check before the product was dispatched. The representatives in question vigorously deny that they ever made claims about a product’s ability to cure brain damage.
The entire matter was dropped, and the police deemed it a non-crime with no true victim. Yet, somehow, the case was re-opened in August of last year, despite no changes to the original legal complaint. The re-opening of this complaint has resulted in no small amount of media uproar over this company, and the direct selling industry in general—despite no sign that any wrongdoing occurred. The company is now fully cooperating with the ongoing investigation.
QNET Responds to the Allegations
At the same time, the company does wish to clear the air with regard to these allegations. The company has responded to the scam accusations with a statement to the press. “The situation surrounding [our company] in India, and Mumbai particularly, suggests there is some form of orchestrated sustained attack on the company, designed to undermine our reputation and prevent us from fair open business and competition in India,” the company has stated.
“The manner in which an alleged unmerited claim of fraud, which itself has not fleshed out and investigated, has been used to arrest distributors, freeze assets and threaten criminal proceedings simply does not stand up to scrutiny,” the company continues. “We are confident that as the true facts emerge, the aggressive and calculated attack on [our company] will be apparent to all, with the suitable vindications following.”
QNET also notes that it “is carrying out its own independent investigations and is making rapid progress in understanding the true circumstances and motivations in what we would term as this ‘corporate raid.’ We will take immediate and strong legal action against those who have sought to harm the company and will pursue the parties for damages wherever we find due cause.”
Representing the Direct Selling Industry
While this strong statement is a big step in the right direction, the question remains: What else can be done to protect the interests of the direct selling industry in the long run? Direct selling employs more than 91 million people across the globe, and it offers a number of excellent products to consumers—so certainly it is worth protecting.
One step is for more nations to regulate the industry. It is important for countries to crack down on pyramid scheming while allowing direct sellers to flourish. This will give consumers more confidence that direct selling companies can, in fact, be trusted.
Beyond that, education is essential. It is vital for direct selling companies to continue informing the public about what the industry actually is and what it does. On this front, QNET is leading the way.