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Direct selling is the action of Marketing and Selling products directly to the consumers in a non-retail environment. This system often eliminates several of the middlemen involved in Product Distribution such as, the regional distribution center and wholesaler. Instead, product goes from manufacturer to the direct sales company, then to the distributor or representative, and then to the Consumer.
There are two types of direct-selling companies.
1) Single level marketing
2) Multi-level Marketing
A direct seller makes money by buying products from a parent organization and selling them directly to consumers. This type of sales is done one-on-one, such as through door-to-door or by doing in-person presentation with the advent of the Internet and catalogues. It can also be said as a PROMOTIONAL TOOL.
Multi-Level Marketing / Network Marketing refers Multiple levels of people are marketing a Product to Consumers. A Sales Representative gets consumers and Recruits and train other Sales Person or Representative to get the end Consumer.
In terms of the guidelines, any direct selling entity conducting direct selling activities is mandatorily required to submit an undertaking stating that it is in compliance with all the aspects of the Direct Selling Guidelines, 2016.
Below is the important information a Consumer should be aware of:
· Name of the Company
· Order Number
· Distributor Id (if purchased through distributor)
· Product Name
· Amount paid/ Mode of Payment
· Account Type- (Company / Personal)
· Date of Booking
· Date of Delivery of the product.
Internal Trade Division, Department of Consumer Affairs deals with the matters relating to Direct Selling and Multi-Level Marketing (MLM).
Department of Consumer Affairs issued an Advisory to State Governments/UT Administrations in the form of Model Framework for Guidelines on Direct Selling on 9th September, 2016, as guiding principles for State Governments to consider regulating the business of “Direct Selling” and Multi-Level Marketing (MLM).
Nodal officers are appointed by State/ UTs Governments under Direct Selling Guidelines, in order to prevent fraud and protecting the legitimate rights and interests of consumers. Details of the Nodal Officers is available - https://consumeraffairs.nic.in/sites/default/files/file-uploads/direct-selling/Direct-Selling_State_Nodal_Officers.pdf
Any direct selling entity conducting direct selling activities is mandatorily required to submit an undertaking stating that it is in compliance with all the aspects of the Direct Selling Guidelines, 2016.
Respective State Government/UT Administration will set up a mechanism to monitor/supervise the activities of direct sellers, direct selling entities regarding compliance with the guidelines on direct selling.
Direct selling suits the sale of almost every category of products that can be found in traditional retail locations and in department stores.
· Cosmetic and personal care products,
· Household items and wellness are the strongest sectors in direct selling.
· Other products categories include food and beverages, nutritional products, jewellery and clothes, books, toys and games, home improvement products, etc.
· Verify the company's contact details like physical address and landline telephone number. Don’t rely on just an email address or a post box number. Check the Website domain.
· Make sure that the web address of the page starts https:// before you enter any personal information or payment details.
· The ’s’ stands for 'secure'. There should also be a small padlock that appears in the bottom of your screen. Avoid entering personal information if you found the website suspicious.
The Grievance Redressal mechanism for the direct selling company –
Tier-1- Written grievance to be sent by post at the Head office address of the Company and wait for 15 days for the response.
Tier-2- Reminder letter to be sent at the registered office address of the company by speed post and wait for another 15 days.
Tier-3- If not satisfied or no response received from the company, a consumer can file a case in the District Consumer Commission, following the procedure prescribed
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