Direct Selling, Network Marketing, MLM Guidelines

Direct Selling, Network Marketing, MLM Guidelines:-

Direct Selling Network Marketing, MLM Guidelines are issued by the Ministry of consumer affairs, Food & public distribution and Department of consumer affairs on 9, Sep 2016. These are issued as guiding principles for State Governments to consider regulating the business of “Direct Selling” and Multi-Level Marketing (MLM) in India.

Note: This document is a simplified version of guidelines released by the government in Hindi. The purpose is just to educate our visitors about MLM & Direct Selling Guidelines. There may be a certain difference in this simplified version. But, our only aim is to provide accurate information 

Direct selling Guidelines

If we see the history of direct selling, there is nothing significant. Years ago, when direct selling was entered into the market, people ignored it. First, when some people started direct selling and started earning, then slowly people started to do it.

What is direct selling?

Direct selling is a marketing model, a marketing model whereby a company communicates its products and services to the people. There is a marketing model to spread among people, the fastest way a company can reach its products and services between people. This is called network marketing/direct selling.
If you want to know more about direct selling/network marketing in details then see our beginner guide on direct selling/network marketing.

When direct selling came in the market or started, there was no guideline in the direction of direct selling. All companies used to bring their plans to the market and ford with the people and ran away. Then on 10 September 2016, some guidelines came from the Government of India regarding direct selling, MLM marketing, network marketing. Many companies had to shut down after the introduction of these direct selling guidelines.

On September 10, 2016, according to I Direct Selling Guides, all the companies giving returns, Chid fund, Money Circulation, pyramid and Ad Clicking, etc. were closed and many other companies were given legal notice.

Conditions Or Direct Selling Guidelines:-

    • The identity of the product/service provided by the company will be the responsibility of the owner, trademark mark, service mark and other marks of the licensee.
    • The company will be required to issue an identity card for its direct seller.
    • The company will have to keep complete information about the product/service, contact form, price, income plan, a direct seller of its business, either manually or electronically.
    • The company will have to update its seller information from time to time.
    • The information of the direct seller should contain the verified certificate, identity card, and PAN card information.
    • There should be a company website, which should contain the company’s contact information, product and product information, product quality certificate, price, income plan, company policy.
    • The problem of direct seller and user should be resolved in 45 days only through this website.
    • The company will have to inform its direct seller from time to time about its business including commissions, sales, bonuses, purchases.
    • The company will have to keep a monitor on the direct seller, how many purchases have been made in the month. If the amount of purchase is more than Value Added Tax, then it will be informed for Value Added Tax payment.
    • The direct selling company cannot get the customer to join the company by giving incorrect information.
  • The company cannot make such promises to the direct seller, which does not have a full percentage expectation. That means the company cannot attract people by showing such false dreams.
  • The company cannot say the goodness of direct selling in the wrong way.
  • The company cannot express income plans and products/services.
  • The company cannot even give its direct seller the right to show the company in the wrong way and befriend.
  • The company cannot take money in the name of providing benefits from the direct seller, entry fees, renewal fees or bringing equipment for direct sale.
  • The company can take money from its direct seller only on the purchase of the product/service.
  • The company cannot pay money to add a direct seller to the company. The company can only pay if a product/service has been sold by the new direct seller.
  • The company cannot take monthly contributions or renewal fees.
  • The company will be responsible for the system used for sale by its distributor and direct seller. Whether that person is added directly or indirectly.

So these are the guidelines of direct selling { network marketing }  you should have knowledge about these guidelines and if you are already in MLM you should follow these direct selling guidelines.

I hope you like this post and it provides the required information which you want. 

Do like, share, comment.

Leave a Comment