Advice You - Business

Introduction

Multi-Level Marketing (MLM) is a system of marketing that has been around for some time. Also known as Network Marketing, it is a method of distributing products that involves little or no mass advertising. Instead, marketing o

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

f the product is spread by word of mouth of its users.

Of course, word-of-mouth marketing is around even longer than MLMs, so what makes it different? Unlike traditional word-of-mouth marketing, the users who spread the word for the company, and gets others

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

to buy the products, gets a commission for doing so. The person who spreads the word is called the Sponsor or Upline, while the person whom he sponsors is called his Downline.

To make the deal even sweeter, the company gives the Sponsor a commission for pro

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

ucts the Downline of his Downline buys! Many companies allow each Sponsor a network up to 6 levels deep. Hence the name for this style of marketing - Multi-Level Marketing or Network Marketing.

Legal Concerns

Legally speaking, MLMs have be

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

n legal in Singapore since June 2000, when the government finally recognised it as a method of product distribution, rather than a Pyramid Scheme. The U.S. government (the land where MLMs first originated with a company called Amway) has slapped a whole list

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

of conditions on an MLM system to set it apart from Pyramid Schemes.

Ethical Concerns

To me, many MLMs toe a very thin line to Pyramid Schemes. The problem does not lie with the marketing system (which actually represents a very cheap meth

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

d of product distribution for the parent company). Rather, it lies with the people who promote the products. In some cases, the way the system is run by the company also makes it a form of legalised Pyramid Scheme (if there is such a thing).

Why do I say th

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

t the problem lies with the people who promote the products? The problem is with the fact that it is promoted as a means to get rich. Its promoters want the downlines at all costs - it means more money for them. In order to get the downlines, they push the ‘

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

usiness model’ and use hype and emotional draws to appeal to those who are looking for more income.

More often than not, the products are very expensive and marketable only to certain segments of the population (e.g. health products). In addition, many who

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

re drawn to such MLMs are actually not prepared for the kind of sacrifices and time required for the business to work. It can take as long as 1-2 years, and thousands of dollars in expenditure before a profit can be turned in. These are the ‘hidden’ stuff th

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

t many promoters did not mention, in their push for more people in their downline (and hence greater wealth for them).

Another practice many companies have (that makes for high dropout rates) is that of a ‘maintenance’. Each month, their distributors must b

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

uy a certain amount of their product to keep their downlines. With increasing expenditure and of both money and time (especially time) and sometimes alienation from friends and family (due to overzealous promoting of the products to get a downline), the dist

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

ibutor gives up - and all their work goes down the drain.

The final point that personally bugs me is the fact that the promoters always harp on the fact that MLM is a sure-win business model. They insist that everybody can succeed in having the MLM as a bus

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

ness, to attain financial freedom.

Let me put it across very plainly. Is it possible for everybody to earn money from MLM? In order for a person to earn money from MLM, you need a critical mass of downlines (as little as 256 persons or as many as 1024, if n

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

t more). Mathematically, it is a folly to assume that there is no bottom of such a pyramid network. For those near the bottom, where are their critical masses coming from?

Ultimately, there must be somebody who is taking money from outside of the MLM struct

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

re, and pumping it into the network of sponsors above. Now, I have no problem with that. There might be those who buys the products without taking it as a business (also known in network marketing circles as ‘consumers’). I was one of them (my money comes fr

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

m outside of the MLM structure). However, to push MLM as a business where everybody can make money is simply unethical.

Conclusion

I personally do not have an anti-MLM pose (I used to be a consumer, but not an active MLM business leader).

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

o me, it represents a distribution system that takes away the wealth from the big boys (the advertisers, the warehousing systems, the transport systems, etc) and put it in the consumers themselves. For those who went in early and helped the company market th

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

ir products, their income will increase.

For those who come in later, however, it is a different story. My desire, for those who read this article, is to warn against the hype and emotional traps that comes from a desire to get rich quick. I also hope (agai

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

st hope, perhaps) that those promoters who have been pushing that mathematically-impossible model will at least tell the truth to their potential downlines.

I welcome all feedback on this article. Till then, may you find health and wealth in your endeavours

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.adviceyou.org.ua/article/18765/adviceyou-MLM--Legal-And-Ethical-Concerns.html">MLM - Legal And Ethical Concerns?</a>

BB link (for phorums):
[url=http://www.adviceyou.org.ua/article/18765/adviceyou-MLM--Legal-And-Ethical-Concerns.html]MLM - Legal And Ethical Concerns?[/url]

Cleaning services are a vital investment for any business; after all, there's nothing like clutter to get in the way of running a business efficiently.

Business plans are filled with projections of what a venture might be able to achieve in the future. They should also be filled with facts about the venture’s past and about the market in which it operates.

Tags

Links

Advice You - MLM - Legal And Ethical Concerns?

Related Articles: