However, she is not alone as thousands of people, especially women, sign up for direct selling companies every year. While some people have made a fortune from this industry, others have become prey to fraudulent schemes. In the past, companies such as Ebiz.com, and Qnet have duped thousands of gullible savers by running a pyramid fraud in the guise of direct selling.
But there are several companies that work on a direct selling model and Amway is the most renowned example of it, with the brand existing in Indian markets for almost 25 years now. The other direct selling companies include Modicare, Avon, Tupperware, Oriflame, and Herbalife Nutrition, among others.
Recently, the Enforcement Directorate (ED) froze assets worth over ₹757.77 crore of Amway India for running a pyramid fraud in the guise of direct selling. But Amway said that “The action of the authorities is with regards to the investigation dating back to 2011 and since then, we have been cooperating with the department and have shared all the information sought from time to time”.
How do you differentiate between a genuine direct selling firm and Ponzi schemes?
According to the Indian Direct Selling Association (IDSA) Director Rajat Banerji, “Direct selling is an operation or sales of a product through a network of sellers”. Calling it a chain of human networks, Banerji said the industry’s sole motive is to provide a livelihood to…
