1. The connection, difference and related understanding between direct selling and pyramid selling.
With the continuous development of China's economy and the continuous improvement of social and economic level, especially since China's entry into WTO, the market economy has been in line with international standards, and a scene of prosperity has emerged, but there are also some unavoidable problems. Among them, the dispute between direct selling and pyramid selling is getting bigger and bigger, and because of lack of understanding and certain discrimination ability, more and more people are deeply involved in it and become victims or even victims. In view of such an event, as contemporary college students, it is necessary for us to understand and analyze it, so as to analyze and distinguish it in the future life journey, resist temptation and realize our own life value.
First of all, as far as its definition is concerned, there are some similarities between direct selling and pyramid selling, but there are also essential differences.
The best definition of direct selling is to sell products and services directly to consumers in a face-to-face manner, usually in the home, workplace or other places different from permanent retail stores of consumers or others. Direct selling is usually explained or demonstrated by independent direct sellers; These salespeople are often called direct sellers. The advantages of direct selling lie in its independent tradition, its service to consumers and its commitment to the growth of entrepreneurs in the free market system. Direct selling provides another source of income for people, who can join the industry regardless of gender, age, education and experience.
MLM refers to the behavior that organizers or managers develop personnel, based on their direct or indirect number of personnel or sales performance, calculate and pay remuneration to the developed personnel, or require the developed personnel to obtain the qualification to join on the condition of paying a certain fee, in order to seek illegal interests, disrupt economic order and affect social stability.
The former is established and sold on a just, fair and legal platform, and there is no fraud. Moreover, because direct sellers and consumers can contact directly, without going through dealers and middlemen, the cost is reduced and the price is relatively low. They believe in zero inventory and high turnover, which can attract consumers and be more competitive. The latter is conducted on a fraudulent, coercive, threatening and illegal platform. Organizers brainwash them by organizing a series of training activities and closed training, instilling some unrealistic and illegal ideas, and they also ask the developed personnel to pay fees or pay fees in disguise by subscribing for goods, so as to obtain the qualification to join or develop other personnel and seek illegal interests; (that is, defrauding entry fees, entry fees or inventory burdens in exchange for entry qualifications or developing others' qualifications). Simply put, direct selling is an important and effective means of commodity circulation, which is legal. MLM is an illegal activity, which aims at deceiving people to join clubs, attracting people and developing offline. It is illegal and prohibited by the state.
Secondly, the quality and performance of the goods sold are different.
In direct selling activities, the products sold by direct selling practitioners usually have a fair price system, which is specially approved by the price department to reflect the fairness in the sales process; Moreover, its products have regular manufacturers and advanced production equipment and their technological processes. In the process of ex-factory sales, manufacturers are equipped with various complete production procedures and excellent quality assurance.
However, in MLM activities, because employees themselves are selling an investment behavior, they do not pay attention to products. What they care about is the proportion and speed of return on investment. The product is only a negotiable prop in the process of pyramid selling.
The products sold by the former are of high quality and can be trusted by consumers, and the quality and price of the products are enough to reassure consumers; The goods sold by the latter can't guarantee the quality, and it is a kind of fraud simply as a tool to make money, regardless of consumers' own interests.
Third, the organizers have different sources of income.
In direct selling activities, selling products is the organizer's only source of income. The organizer allocates funds from the total sales revenue as working capital to pay the salaries and bonuses of the sales staff. In MLM activities, the organizers' income sources are registration fees, training fees, information fees or compulsory purchase of products. The organizer pays the former participants with the fees paid by the later participants to maintain the operation.
The former relies on sales performance and level to get labor remuneration, which is the income of personal hard work; The latter is an illegal act of defrauding income through fraud.
Fourth, the training methods, training purposes and sales purposes of pre-sales personnel are different.
In direct selling activities, direct sellers usually receive systematic training, including product training, marketing technical training, customer service training, policy and legal training, etc. Its purpose is to better sell products and provide better and better services to customers. So as to establish a group of more and more loyal customers, who trust the company and its products, are willing to consume the company's products for a long time, and are loyal to the company's brand.
In MLM activities, although MLM practitioners may also receive various kinds of education and training introduced in direct selling activities, they are often empty in form and prefer large-scale incentive activities and sharing activities in the course of their employment. Their content is relatively simple, and most of them are inspiring concept changes. Their purpose is to induce participants to pay for their work or increase their strength. The ultimate goal of enterprises and pyramid schemes practitioners engaged in pyramid schemes is often to "escape with one vote and get rich quickly", so they often take the opportunity to "change one place with one shot". They do not emphasize the repeated consumption and development of products, maintain loyal customers, and do not publicize the concept system of loyal consumers.
The former is positive and indispensable in the sales process, while the latter is "brainwashing" of employees, which is a disguised form of fraud and cajoling.
Fifth, the flow patterns and prices of products are different.
In the process of direct selling, the unit sells its own products in one direction and sells them at the company's unified price.
In the process of pyramid selling, the flow of products is that pyramid sellers resell products to each other. When selling products from online to offline, their prices are increased layer by layer, and there is no unified selling price.
The former is standardized and conforms to the law of economic development; The latter has no unified form and organization, and the sales will be more chaotic. Moreover, because there is no unified price, the price of products will continue to increase from online to offline, and the difference in profits will lead to the disparity in prices, which will inevitably lead to a series of potential problems, uneven distribution of benefits and poor sales. In order to get a lower batch, we will increase sales from our own pockets, thus forming vicious competition.
Sixth, the after-sales service quality and service attitude are different.
In direct selling, if consumers find that after-sales products are defective or dissatisfied, sales staff are allowed to exchange goods and return them within a reasonable cooling-off period, and the service quality is relatively good. In pyramid selling, if such problems are found, the salesperson is not allowed to return the goods, or sets harsh conditions for the return of the goods, so as to achieve the purpose of not returning the goods.
The former can provide exchange service because it can guarantee the quality of products. From the beginning, they can guarantee the quality of products from the interests of consumers. From the beginning, the latter only regarded commodities as a tool to make money, and did not pay attention to the quality and performance of products, so they could not provide such services and tried their best to avoid responsibility.
Two. Personal views and corresponding measures
With the continuous development of society, the organizers of pyramid schemes have penetrated into all walks of life, and even college students have been involved in this terrible whirlpool. So how should we deal with such an increasingly serious problem?
Why are so many people trapped in the shackles of pyramid schemes? After consulting relevant materials and analyzing and studying, I think it is mainly caused by the following reasons.
First of all, most people know little about direct selling and pyramid selling, so they can't accurately analyze and judge their nature, legality and illegality. It is easy to be captured when faced with the rhetoric of MLM organizers. Secondly, driven by rich and speculative psychology, some people give up a stable but not rich life and are willing to take risks, hoping to satisfy their desire for material life in a short time, thus ignoring the possible serious consequences; Third, out of trust, I was bewitched by my relatives and friends and fell into shackles; Fourth, forced to join by violence, intimidation or coercion; Fifth, college students are deeply involved, mainly because they fail to deeply understand the deception and harm of pyramid schemes. Because they are eager to find a job, they are easy to believe in the rhetoric of pyramid schemes and destroy their ideological defense lines in pyramid schemes such as training, lectures and speeches.
In view of the above reasons and referring to the analysis of many researchers, I personally put forward some views, hoping to help them.
First of all, the state should vigorously publicize the dangers of pyramid schemes, and make use of all available social forces such as newspapers, magazines, television and the Internet to popularize relevant knowledge in all fields and at all levels, so that the broad masses can fully understand the dangers and illegality of pyramid schemes;
Secondly, pay attention to the laid-off workers with low living standards, give them care, solve their real-life problems, actively help them find jobs, and make them have a relatively stable living environment;
Third, vigorously publicize the negative impact and harm of pyramid schemes, crack down on speculation and carry out supervision by the whole people;
Fourth, formulate and improve the corresponding laws and regulations (which have been promulgated), crack down on pyramid schemes in strict accordance with the laws and regulations, especially severely punish pyramid schemes organizers and completely disintegrate their organizations;
Fifth, aiming at college students, primary and secondary school students, we should actively publicize and resist unhealthy tendencies by making use of teaching advantages. Colleges and universities can make an in-depth analysis of this economic "cult" with the help of the advantages and support of economics and psychology, and analyze pyramid selling activities from the aspects of marketing and marketing psychology, so that students can understand its true face.
I hope more and more people will pay attention to these problems, constantly resist and eliminate the bad social atmosphere and economic operation mode in society, so that our life and market economy will develop in a better and better direction, and our great Chinese nation will stand among the nations in the world with a positive and healthy image!
Answer 2: There is a boundary of 10 between direct selling and pyramid selling.
Although the legislation of direct selling is getting closer and closer, many enterprises are gearing up to catch the first bus of direct selling. However, whether this new marketing model of direct selling can take root and flourish in the soil of China depends on how China people view this new marketing model. Influenced by the shadow of the "mouse club" in the past, quite a few people still have the understanding that "direct selling is pyramid selling, and pyramid selling is the" mouse club ". Therefore, correcting this concept is an important prerequisite to ensure the smooth introduction and healthy development of China's direct selling legislation. To this end, we have extracted the chapter on the difference between direct selling and pyramid selling from the book 18, the core problems of China's direct selling legislation and its solutions by Professor Hu Yuanjiang, a Chinese marketing expert, for the convenience of readers.
10 Distinguish between direct selling and MLM
Hu Yuanjiang pointed out that as an important mode in international marketing practice, although the basic concept of direct selling has different versions of definitions, it can all be expressed as "sales behavior with measurable response outside any fixed place (including home, office, etc.). ) with a carrier. " In this concept, there are three elements: first, it must rely on some kind of carrier (either people or things); Second, its sales behavior takes place anywhere other than the fixed place; Third, its sales results can be measured and predicted. All marketing models that contain the above marketing elements can be collectively referred to as direct sales. The so-called difference between direct selling and pyramid selling actually refers to how to distinguish the operational forms of the two from the operational substance in theory and marketing practice.
MLM in the international marketing system is a form of international direct selling, which refers to a kind of store-free sales behavior based on the basic principle of market diversification through independent distributors and their orderly organizational system. In China, since 1998, due to the nonstandard operation of pyramid selling enterprises and the immaturity of domestic consumer psychology, various social problems caused by pyramid selling have also intensified, and the China government finally banned pyramid selling as a commercial form. From 1998 to now, pyramid selling in China is generally considered to have the following characteristics: First, it is explicitly prohibited by the government; Second, it is economic crime; Third, some will turn into "cult" behaviors in the economic field. Its manifestations are various. Obviously, applying the concept of direct selling in international marketing and letting it develop freely will seriously endanger social stability and unity, national market economic order and national security.
Hu Yuanjiang believes that it is more complicated to distinguish between direct selling and pyramid selling in practice than in theory. Specifically, there are the following differences:
First, in direct selling activities, direct sellers and direct selling enterprises are usually oriented to selling products, and their whole sales process will always put selling products to consumers in the first place. However, MLM activities are different. In the process of pyramid selling activities, pyramid sellers and pyramid selling enterprises are usually oriented to promote investment opportunities and other opportunities. Throughout their employment process, they always put "communication and promotion of opportunities for starting a business to get rich" in the first place. Completely different from legal direct selling activities, they don't pay attention to and admire the sales of products.
Second, in direct selling activities, dealers are not required to pay high entry fees or buy products with the same price as high entry fees when obtaining qualifications. In pyramid selling activities, pyramid sellers generally need to pay high entry fees or buy products equivalent to high entry fees when obtaining qualifications.
Thirdly, in direct selling activities, the products sold by direct selling practitioners usually have a fair price system, which is specially approved by the price department, reflecting the fairness in the sales process; Moreover, its products have regular manufacturers and advanced production equipment and their technological processes. In the process of ex-factory sales, manufacturers are equipped with various complete production procedures and excellent quality assurance. However, in MLM activities, because employees themselves are selling an investment behavior, they do not pay attention to products. What they care about is the proportion and speed of return on investment. The product is only a negotiable prop in the process of pyramid selling.
Fourth, in direct selling activities, the income sources of direct selling practitioners are mainly in two aspects. One is the sales commission obtained by direct selling employees selling their own products, which is the long-term fundamental income of direct selling employees, and its income is completely determined by the sales performance of direct selling employees; The second is the management bonus given by the enterprise according to the market expansion and marketing organization construction of direct selling employees. In MLM activities, the income of MLM employees mainly comes from the high admission fees charged when they expand the marketing organization (develop offline MLM employees), rather than from the normal commission obtained from long-term product sales.
Fifth, in direct selling activities, direct sellers usually have systematic pre-service, in-service and post-service training, including product training, marketing technical training, customer service training, policy and legal training and so on. In MLM activities, although MLM practitioners may also receive various kinds of education and training introduced in direct selling activities, they are often empty in form and prefer large-scale incentive activities and sharing activities in the course of their employment. Their content is relatively simple, and most of them are inspiring concept changes. Their purpose is to induce participants to pay for their work or increase their strength.
Sixth, in direct selling activities, direct selling practitioners and direct selling enterprises usually firmly emphasize the principle of "distribution according to work and getting rich through hard work" in the construction of their direct selling system culture, regard direct selling activities as a normal wealth creation and sharing activity, spread all income from their own efforts, and advocate the improvement of marketing technology. In MLM activities, MLM practitioners and enterprises engaged in MLM activities usually firmly emphasize the values and principles such as "once and for all" in their MLM system culture construction.
Seventh, in direct selling activities, the ultimate marketing goal of direct selling enterprises and direct selling practitioners is to build a group of more and more loyal customers, who trust the company and its products, are willing to consume the company's products for a long time, and are loyal to the company's brand. In pyramid selling activities, the ultimate goal of enterprises and employees engaged in pyramid selling activities is often to "get a ticket and get rich quickly", so the way they take is often to "shoot for a place". They do not emphasize the repeated consumption and development of products, maintain loyal customers, and do not publicize the concept system of loyal consumers.
Eighth, in direct selling activities, the work of direct selling practitioners is mainly to develop consumer customers and sell products to these customers in the early stage. However, with more and more consumer customers, their work focus has gradually changed: that is, from the early development of consumer customers to the management of consumer customers, in the process of managing consumer customers, timely and accurately provide various consumer information products and sales services to various consumer customers. However, in MLM activities, the work of MLM practitioners will not change from beginning to end, that is, they will always focus on developing offline organizations in the mode of "finding offline and taking the lead".
Ninth, in direct selling activities, direct selling enterprises usually require their direct selling employees to know all kinds of national policies and regulations on direct selling, consciously abide by all kinds of policies and regulations, and pay all kinds of taxes according to law, especially personal income tax. In pyramid selling activities, companies engaged in pyramid selling usually cut off all kinds of policy information flow systems leading to employees, do not encourage employees to know too much about all kinds of policies and regulations, and do not repeatedly emphasize their responsibilities and obligations as citizens.
Tenth, in direct selling activities, direct selling enterprises and direct selling practitioners usually formulate and implement a good system for protecting consumers' interests. This protection system generally has three ways: one is to provide consumers with excellent products and excellent service system; Second, in the process of consumers buying enterprise products and consuming enterprise products, formulate a moderate cooling-off period and implement the system of returning goods without reason during the cooling-off period; Thirdly, in view of the damage of enterprises to consumers' rights and interests, enterprises have formulated a good compensation system, that is, once consumers' rights and interests are damaged, direct selling enterprises or direct selling practitioners must take various forms to compensate consumers. In MLM activities, because people engaged in MLM usually use products as props to win people's hearts and develop offline, once the transaction is completed, they are not allowed to return goods, often accompanied by various harsh conditions. In MLM activities, enterprises basically do not set up a formal cooling-off period system in accordance with international practice. Even if they do, various obstacle systems will be derived in actual implementation. Therefore, in MLM activities, the legitimate rights and interests of consumers are basically extremely difficult to safeguard. (Li Heping finishing)