NETWORK MARKETING IN MALAWI; RANDOM THOUGHTS

Network marketing in Malawi is becoming popular each passing day with more companies launching their businesses in the country. If you’re contemplating on whether network marketing is a good business idea to start in Malawi or not, then this blog is right for you.  

Network marketing is one of the businesses that Robert Kiyosaki recommends in his book “The Business of the 21^st Century”. It is his book that inspired me to research more on the subject in the Malawian context.

Is network marketing a viable business idea in Malawi?

The first thing to take note is that network marketing is different from many other known businesses. One thing that distinguishes network marketing from other forms of business is the method of advertisement/marketing. Network marketing focuses on word of mouth as their main method of advertisement for their products through the use of volunteers or members.   

Usually, members join the networking companies by paying a registration fee. A practical instance, to join Jamer Life an individual pays a fee of MK6000 while to join AIM Global in Malawi a person pays MK 90 000.

While network marketing is considered one of the profitable businesses elsewhere, I have found that there are many controversies surrounding these businesses in Malawi. In some cases instead of enriching members, it is found that these companies are scams. When joining people are told, they will be earning a lot of money on daily basis. And due to high levels of unemployment, many people quickly join without researching adequately on the claims.   Later on, they regret.

But being scammed in network marketing is should not sound strange because most of them are well-known pyramid scams. As a matter of fact, if you google “network marketing” the next words that will show up wit be “pyramid scams”.  In pyramid scams, the majority members at the bottom level are the ones who suffer most. Few people high up on the company pyramid are the ones who benefit the most.

How do pyramid scams work?      

In order to understand how a pyramid scam works, I will first try to explain how people make money in network marketing.

First, we have company owners on top of the pyramid. These are shareholders who make the products for the company and earn most of the profits. Usually, it is a group of a few people. They make money from the registration fees which members pay to their company. They also make profits on the products they sell.

How members make money?

Many agents for network marketing claim that their members have multiple ways of making money within the system. However, there are three common ways of making money in most companies.

Recruitment commission

Network marketing is about the recruitment of volunteers to promote products for the parent company. This is through word of mouth and audio-visual presentations which they organize.

Here is how it is done, a person X invites person Y to join the company. Person Y joins the company by paying a fee. The company takes a fraction of Y’s registration fee to compensate person X.

In this way the amount of commission X receives is depended on thenumber of persons he/she invites to join the company. More recruits mean more commissions.

Direct sale of company products

Notable pyramid scams do not offer any physical products. But some companies have physical products which they sell to members at a cheaper price. Members then are to sell the products on a price that will give them profit.

The most common products sold by network marketing companies in Malawi are natural food supplements such as slimming teas, weight loss herbs, and cosmetic products like soaps, face creams, and lotions.

The problem with these products is that in most cases they are highly priced compared to the same quality products that can be found on the normal markets. And most of the claims they made are not approved by any internationally recognized testing board. Furthermore, some claims, likehealing claims lacks empirical evidence.

Anyway, this is the second method people make money in network marketing. A challenge with this method is that many people fail to sell since the demand for these products is too low. As a result, some members are forced to use the products.

Bonuses

Almost all networking companies in Malawi promise bonuses to members who recruit more volunteers into the company. The pyramid businesses have levels. The higher the level one goes the higher the benefits.

Network marketing companies promise members that if they successfully reach a certain level they will be given bonuses such as cars, laptops, phones, and international trips. It is, however, known that only a few people attain such levels. The rest are trapped in between.

Some of Network marketing in Malawi

AIM Global – The Company is now under investigation by the Malawi government. The public suspects that thecompany is a pyramid scam. AIM Global has its headquarters in thePhilippines

Oriflamme – It sells cosmetics products such  as soaps, rip bam, body creams and lotions. The company is from Sweden

Avon- one of the oldest network marketing company in the world

 Jammerlife helpers global

Before you join

Before joining network marketing is advisable to adequately research the company and the products they offer. Most importantly find out if the products a particular company offers have sustainable demand. In the spirit of this article, we do not recommend any of the companies mentioned above.

Instead, I recommend you to read the eBook “200 Business Ideas toStart in Malawi” with many good business ideas to explore.