Average income 2.7 million/year, multi-level marketing is not the way to get rich

The Ministry of Industry and Trade said that the number of multi-level marketers is currently about 360,000, their average income is 2.7 million VND/year, so multi-level marketing can hardly make everyone rich.

According to a report from the Ministry of Industry and Trade, recently multi-level marketing has decreased sharply in both the number of businesses and participants.

The number of multi-level marketing businesses with operating certificates is 36, down 46% compared to the end of 2015. The number of participants is about 360,000 people, down 276,000 people (43%) compared to the end of 2016.

Income 2.7 million VND/year, hard to get rich from multi-level marketing

In the first 6 months of the year, the total revenue from multi-level marketing sales of enterprises was 3,067 billion VND. The total commission and other economic benefits they paid to participants was 986 billion VND. Thus, the commission rate on revenue was 32%.

The Ministry of Industry and Trade calculates that the average income of 360,000 people participating in multi-level marketing is about 2.7 million VND/person/year. Therefore, multi-level marketing is not a business method that can make all participants rich.

According to the Ministry of Industry and Trade, there are only about 360,000 people participating in multi-level marketing nationwide. Photo: Tien Tuan.

Of the 35 enterprises currently operating with certificates, 11 enterprises have incurred obligations to buy back goods from participants with an estimated total value of about 6 billion VND.

The Ministry of Industry and Trade has also received many complaints from multi-level marketers, but most of them do not actually sell products but only give money to others and hope to receive high profits.

In particular, 100% of profit agreements are not recorded in writing, so when disputes arise, state agencies have no evidence to handle them.

Multi-level marketing "boss" Thien Ngoc Minh Uy occupies 165,000 people

According to the Ministry of Industry and Trade, the largest multi-level marketing enterprise in the country, Thien Ngoc Minh Uy Company Limited, ceased operations in April. At the time of cessation of operations, Thien Ngoc Minh Uy had 165,000 participants, over 20 branches, and 41 business locations in localities.

The Ministry of Industry and Trade has reported to the Government to direct the Ministry of Public Security and local People's Committees to ensure security and order because Thien Ngoc Minh Uy's suspension of operations could lead to complaints and lawsuits, potentially affecting security and order.

The Ministry also established a working group with the participation of the Ministry of Public Security to work with Thien Ngoc Minh Uy Company Limited to monitor and supervise the process of this company liquidating contracts with participants, to prevent situations where Thien Ngoc Minh Uy is no longer able or refuses to refund people's participation fees.

Some multi-level marketing companies were fined in 2016. Graphics: Hieu Cong.

Since the beginning of the year, 4 businesses have been fined 490 million VND.

To date, 15/63 provinces and cities (Hanoi, Ho Chi Minh City, Quang Ninh, Lang Son, Yen Bai...) have directed competent authorities to handle issues arising from Thien Ngoc Minh Uy's termination of multi-level marketing activities.

In addition to handling the suspension of Thien Ngoc Minh Uy, since the beginning of 2017, the Ministry of Industry and Trade has also completed the investigation and punished 4 multi-level marketing enterprises that violated the law with a total fine of 490 million VND.

The inspection has been completed and the procedures for handling violations against two other multi-level marketing companies related to violations of business laws in this field are underway.

The Ministry of Industry and Trade is also developing and completing a draft Decree amending and supplementing Decree 42/2014/ND-CP to effectively manage operations as well as have sufficient legal sanctions to manage multi-level sales.

According to Zing.vn