MLM, 1945, originated in the United States and is said to have been invented by a student of Harvard University. Later it was gradually accepted by some countries in Europe and Asia. In the 1970s and 1980s, pyramid selling became popular all over the world. In recent years, there are 5 million people engaged in pyramid schemes in the United States, with an annual turnover of 9.5 billion US dollars, and there are 65.438 million people in Japan, with an annual turnover of 65.438 billion US dollars. There are 8 million people in the world, with an annual turnover of 654.38+080 billion US dollars, and its strength cannot be underestimated. According to the newspaper, at present, 50-60% of goods sales and services in some European countries and Japan are completed through pyramid schemes.
The full name of MLM is multi-level direct selling, which means that an MLM company conducts direct marketing to consumers. When consumers buy a certain number of the company's products, they can become their pyramid sellers. It spreads the reputation of enterprises by spreading the word-of-mouth of "one to ten" and "ten to hundred", and promotes its own characteristic products through a huge sales network. This new marketing method, which is different from traditional store retailing, is characterized by shortening marketing channels, saving middlemen's fees, and providing consumers with convenient and fast door-to-door service, thus improving the competitiveness of products.
Economists call the profit of reducing material loss and increasing profit in enterprise production the first profit source, the profit of saving working hours the second profit source and the profit of reducing product circulation cost the third profit source. For decades, China's commodity circulation channels are mainly secondary and tertiary wholesale and retail departments. Because there are too many links, the turnover of products and funds is slow, resulting in a huge waste of people and property. Coupled with information failure, enterprises have lost countless opportunities for supply and demand. The phenomenon of "commodity tourism" shows the disadvantages of China's current sales system, and the emergence of pyramid selling is a challenge to the commercial circulation system. In a sense, it is a revolution in the field of circulation in China.
1990l65438+1October 14. Sino-US joint venture Guangzhou Yalao Co., Ltd. was established. As a result, MLM entered the Chinese mainland market, and then, from south to north, Shanghai, Jinan, Beijing, Xi, Urumqi, Dalian, Shenyang, Harbin and other places appeared one after another and blossomed everywhere. For a time, Avon, Yating, Longquan, Amway, Stimmer, Sunrider and other MLM cosmetics, health food, medicines, jewelry, cleaning products became famous.
It is understood that there are hundreds of MLM companies in China, and the number of MLM participants has reached hundreds of thousands. There are over 50,000 people in Beijing and Guangzhou alone. The slogan "the shortest straight line between two points" is still circulating in the streets of Beijing.
However, just as pyramid schemes are surging, some lawless elements are bluffing, selling fake and shoddy products under the banner of pyramid schemes and asking for exorbitant prices. "God" was shocked and the administrative department for industry and commerce was angry, so some news organizations began to take stock of the evils of pyramid schemes. It has caused many consumers to talk about "transmission", and even compared MLM with the "mysterious chain" popular in China earlier-MLM has become synonymous with deception.
To some extent, the formation of the above situation can be said to be the bitter wine brewed by MLM itself. For a time, at various parties, it was often said that they encouraged the lobbyists to pay high admission fees or subscribe for expensive goods, and then join the team of pyramid selling a certain commodity. The lobbyist here is called "online". Once the lobbyist joins the MLM team, he becomes "online" and "offline". The credo of "online" is that as long as he can develop enough "offline", he can get a commission by introducing "offline" (membership fee), thus becoming rich overnight.
Do you want to be a millionaire? Join the XMLM network, and the next millionaire will be you! This is the most common advertisement for pyramid schemes. The appearance of "I can earn thousands of dollars a day now" encourages people to join the ranks of pyramid schemes. This kind of pyramid selling is divorced from the essence of selling products in propaganda techniques, product prices and organizational forms. The use value of MLM products is ignored or irrelevant at all. No matter whether you know the computer or not, you must spend money to buy this product in order to get "online qualification" and participate in the money game to attract people to join the club and earn commissions. As a result, MLM, as the essence of selling products, has gone astray.
Mr. Luo from Guangdong-Hong Kong Information Daily once visited an intellectual woman engaged in pyramid selling business. In the first month, MLM personnel earned tens of thousands of yuan. It is thought-provoking that the price of the so-called "magnetic mattress" sold by this intellectual woman is as high as 10,000 yuan. Who would believe that a mattress can cure all diseases? Under the premise that the quality of the mattress is not trustworthy, why does "online" drag "offline" into the water by hook or by crook? Isn't the relationship between online and offline at this time the relationship between cheating and being cheated? In order to gain profits or pass on losses, the deceived person does not cheat the next "offline", thus forming a cheating link.
This kind of pyramid selling is commonly known as "mouse club", which is also called "hierarchical marketing". The profit source of each level of MLM products is the commission charged by introducing others into direct sales, while the main profit source of companies that produce MLM products is the admission fee of newcomers at the bottom.
Someone calculated an account for the "head-pulling" MLM company. As a company, only 1 person is allowed in the first month, and only 1 person is allowed to be introduced every month thereafter. Then there were 2 people in the second month, 4 people in the third month, 8 people in the fourth month ... By the 24th month, it became 8,388,608 people. If there is no sustainable retail profit, but a one-time admission fee is used to distribute it layer by layer, then the huge membership group at the bottom will be wiped out. However, the people in it have never thought about calculating this account.
In this way, it is inevitable that a jewelry company in Shenyang has developed 1 300 MLM staff after three months of opening. Among them, MLM personnel who did not receive bonuses or lost more than 3,000 yuan accounted for 93.77% of net users, with a net loss of 30 million yuan, while jewelry companies made millions of yuan. In Shanghai, Harbin, Beijing and other places, overseas MLM personnel absconded with money, and MLM personnel lost all their money.
This kind of "pseudo-pyramid scheme" which uses the principle of multi-level pyramid scheme to cheat money has appeared in the United States, Europe, Japan and Taiwan Province Province of China. At present, these places have explicitly prohibited such unfair pyramid schemes. What should China do? Faced with this complicated pyramid scheme, there are different opinions in the society.
Some experts and scholars believe that, first of all, it is necessary to distinguish pyramid selling from pseudo pyramid selling. As a new product marketing method and channel, MLM will play an important role in China's economic development.
However, people who hold different opinions think that pyramid selling disturbs the normal order and is an act of unfair competition, which should be resolutely banned. There are three reasons: first, it is difficult to collect taxes according to law, which has become a "black hole" for national tax collection and management. Because pyramid schemes are mainly cash transactions, many pyramid schemes companies do not issue invoices, and most of the income tax payable by pyramid schemes is deducted by only a few companies. In this way, the income of individuals and enterprises is a "black box", which is difficult for the national tax authorities to check; Second, it is easy to escape the constraints of quality laws and regulations, which is not conducive to the quality supervision of industry and commerce, food and health departments. MLM is relatively secret, and most of them are not sold in stores, which makes the "three noes" products and counterfeit and shoddy products take advantage of it; Third, the price of products is high, and normal commercial profits are often robbed by people. In addition, MLM products are not sold in stores, which is beyond the control of the state. For example, some MLM companies raise the retail price of goods to 2-3 times the cost and make huge profits.
Different people have different opinions, so let's not compromise.
While experts and scholars are arguing endlessly, local governments and relevant departments have taken substantive actions:
-1993, Foshan municipal government of Guangdong province banned Sunrider pyramid scheme;
-1June 1994, the Ministry of Health issued a notice to investigate and deal with Sunrider according to law, because the drug was imported and sold without the approval of the administrative department.
-1In August 1993, the relevant departments of Beijing ordered Beijing Longquan Jewelry Co., Ltd. to close down, believing that it disturbed the gold order.
-65438+1In April 1994, the relevant departments of Shanghai jointly issued a notice to stop "multi-level direct selling" and banned the "Merlot" pyramid selling company in Shanghai.
However, this simple administrative order ban did not resist the spread of pyramid schemes. After the above-mentioned "Longquan" company was banned in Beijing, it moved northward and changed its name and surname in Harbin and Dalian, and its business was still booming; After Merlot was banned in Xujiahui District, Shanghai, it was moved to Zhabei District to continue its business. The great momentum of wildfires never completely devours them.
Reality forces us to seriously think about this question: when we throw the dirty water of improper pyramid schemes out of the door, will we also throw out the "baby" in the basin-legal pyramid schemes?
In fact, when more people are skeptical about pyramid schemes, there are still a group of people who can't be ignored who are using actions to show what is legal pyramid schemes.
Throughout the country, there are millions of self-made entrepreneurs. According to their own personal experience and successful experience, they always think that MLM is the warmest and most intimate sales method and the fastest way to success. With her irresistible temptation, MLM quickly moved to many cities in China. 1995 1 6, at the inaugural meeting of Guangzhou Direct Selling Association, the first direct selling association in China, the representative of Zhuhai Giant Group, who is famous for producing and selling Chinese character typesetting system and "brain gold" health care products, said that the company not only supports the establishment of direct selling association, but also plans to set up a company with direct selling as its main business mode to promote products. Not only that, in Guangzhou, Shenzhen and Beijing, some direct selling legions began to appear black and pink. ...
Last year, thousands of salespeople in the product direct sales center of China Association for the Promotion of Regional Development wore cultural shirts and wandered around the streets of Beijing. It is said that the center is signing cooperation agreements with more than 0/000 manufacturers at home and abroad, and its direct sales products include more than 2,000 varieties such as electrical equipment, large machinery and clothing department stores. Haikou Tongda Trading Company has 15o 00 direct sellers, and some university professors, government officials, company employees and workers have also quietly started pyramid schemes. Let's take a look at the following example:
Mr. Xiao was one of the first people to sell Sunrider in Guangzhou. At the party, he didn't hide a lot of wealth (such as cars, villas, etc.) ) through pyramid selling, but he thinks that Sunrider's pyramid selling is not for profiteering, but for persistent labor (selling products and developing "off-line"), which is "more work and more, less work and less".
Mr. Xiao hasn't been doing pyramid schemes for a long time, but he is very popular. Why?
The answer points out the real charm of pyramid selling. Experts believe that there is a multiplier effect in pyramid schemes. When "online" A develops three "offline" B, C, D, B can develop EFG, C, D, and it is also possible that the MLM network below A will be immeasurable. According to the distribution rules, "online" A can get rich profits from the retail performance of the whole network. But it can't be said that the development of "online" to "offline" will be done once and for all. Developing "offline" is a chore in itself. In order to ensure that "offline" is not lost and help "offline" sell products, "online" must always stimulate the enthusiasm of "offline". Of course, the hard work of "online" A will be compensated in the profit multiplication effect of MLM network.
Mr. Xiao chose this promising job, he made a fortune, and many of his "off-line" also made a fortune.
Qin Shuo, the author of Brainstorming, was an early person who studied direct selling with a rational attitude. In his forthcoming monograph on direct selling, he explains the loveliness of direct selling in this way: "Direct selling is a business with personal connections (like blood). You give him a chance, and he gives me a chance to circulate among people and let each of us develop. "
In view of this, how should we treat "MLM" and how to foster strengths and avoid weaknesses?
Of course, it is the easiest way to "stay away", but this arbitrary approach has made China's economic construction pay a high tuition fee. How can we make the same mistake again? A rational attitude should first make clear whether the MLM industry is suitable for China's national conditions. Should the MLM industry in China or the whole bank be banned? ! Furthermore, it depends on whether it is conducive to the liberation and development of productive forces, whether it meets the needs of the socialist market economy, whether it promotes the development of the market economy and whether it can develop people's creative spirit. We shouldn't give up eating because of one thing at a time.
After a calm analysis, economic experts pointed out: China's market mechanism is not perfect, the market is immature, the laws and regulations are not standardized and imperfect, and the social culture and people's concepts are lagging behind, which has caused the development trend of pyramid selling. The administrative department for industry and commerce pointed out that the MLM business model is still in the pilot stage in China, and the relevant national and local laws and regulations are still being proposed. At present, there is no perfect method for the management of direct selling organizations ... The two coincide with each other and point the finger at laws and institutional norms.
It should be affirmed that proper pyramid selling will play a positive role in the development of China's socialist market economy. The key to the problem lies in the lack of corresponding regulations and management, which makes the domestic MLM industry mixed. Therefore, bringing MLM into the legal track is the fundamental guarantee for the healthy development of China's MLM industry and stopping "fake MLM" activities, and it is also eagerly awaited by many MLM companies. The urgent task is to formulate laws and regulations as soon as possible with reference to international practices, standardize pyramid selling behavior, define the qualifications of pyramid selling subjects, set the prices of pyramid selling products, the rights and obligations of pyramid selling personnel, the types of pyramid selling products, and penalties for violations.
Fortunately, according to this idea, in August last year, the State Administration for Industry and Commerce issued the Notice on Stopping Illegal Activities in Multi-level MLM Activities, demanding that the multi-level MLM activities be cleaned up and inspected, and resolutely banning the multi-level MLM activities carried out without authorization.
This law clearly stipulates that pyramid schemes will be prohibited under the following circumstances: participants mainly introduce others to participate, and their income mainly comes from the entrance fees paid by newly introduced new members; Paying a high membership fee or paying a high membership fee in disguise on the condition of subscribing for goods; Make false or misleading propaganda for multi-level pyramid selling activities and invite people to join clubs; Commodity prices are higher than reasonable market prices, profiteering; No return is allowed or the return conditions are harsh, and so on.
The foreign MLM industry also has a process from chaos to governance. 1975, American law recognized pyramid schemes and began to regulate pyramid schemes; From 65438 to 0993, Malaysia implemented the "Direct Selling Order" to manage the direct selling industry, including pyramid selling.
It is reported that the Ministry of Internal Trade, the State Administration for Industry and Commerce, State Taxation Administration of The People's Republic of China and other departments have held seminars to control pyramid schemes, with a view to issuing legal documents to control and regulate pyramid schemes as soon as possible.
Shanghai Administration for Industry and Commerce issued the Interim Measures for the Management of Multilevel MLM in Shanghai (Discussion Draft).
A group of young and middle-aged scholars, such as Associate Professor Yang Qian from Beijing Commercial Cadre Management College, are studying the topic of "Development and Management of Direct Selling Industry in China".
Shenzhen Administration for Industry and Commerce, Bureau of Taxation and Legal Affairs also put the research and formulation of strengthening pyramid selling supervision on the agenda.
There are laws to follow, so that MLM companies can operate normally under legal norms, and the legitimate rights and interests of MLM and consumers will also be protected by law, which is the premise for the legal track and healthy development of MLM activities in China.
As the forefront of reform and opening up, Guangzhou's attitude towards pyramid selling is becoming more and more moderate. At the beginning of this year, Sunrider, Amway and Newman, three world-renowned direct selling companies, have been approved by the industrial and commercial department of Guangzhou and officially landed in Guangzhou. Earlier, the head of Guangzhou Industrial and Commercial Department also gave Amway a beautiful and pure statue of goddess, and said meaningfully that Amway would like to "retire from the world like a goddess".
For pyramid selling, China people have experienced the process of scrambling for support, but they hate it and regard it as a basin of dirty water. Now it is time to rationally pick up the scattered "treasures"-just pyramid schemes.
The dark clouds are about to disperse, and the MLM industry after pathological removal is about to step off the operating table and get back a fair treatment.