Direct selling is widely misunderstood and confused with pyramid schemes. Thus, companies like QNET Scam who apply the model face unfounded allegation which may damage a company or brand. Hence, there is a dire need to differentiate between direct selling and pyramid schemes.
Direct selling is one of the existing sales models like traditional retail, online selling, consultative selling, and business development. Unlike conventional models, direct sales aim to reduce intermediary costs by selling directly to consumers.
Products sold through direct sales are usually not found in retail stores and are comparably cheaper. Statistics indicate that approximately 100 million individuals across the globe are involved in direct sales in both part-time and full-time capacities.
Direct selling uses sales representatives to market and makes sales to consumers in a non-retail setting. Hence, they organize sales and marketing events through network marketing activities or party plans. Sales representatives are paid a commission according to the number of products they sell. Additionally, sales representatives don’t get a base salary, reducing overall operating expenses for the company.
Multi-Level Marketing (MLM) is often confused with direct selling. While MLM is a type of direct selling, not all direct sales utilize the MLM model. With MLM, sales representatives receive a commission for their direct sales and those made by salespeople recruited into the firm.
Differences Between Multi-Level Marketing and Pyramid Schemes
Pyramid schemes are illegal schemes where individuals at the top of the pyramid gain income by recruiting people into the scheme. Over the long term, this business model is unsustainable and eventually bottoms out. Conversely, network marketing focuses on selling products rather than recruiting new people.
Is QNET a Scam?
QNET is a legitimate business that has been in operation for 20 years in more than 25 countries. It utilizes the direct sales model to market its products while creating businesses for entrepreneurs.