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Dear Partners,

This month's Aug issue of "The Graduate" (monthly newsmagazine of NUSS  National University of Singapore Society)  has a front page article on LM - Wave of the Future. Inside are 6 full pgs on this article and Unicity is the only LM company featured -plus interviews with Bobby Chia, Henry Foo and Dr Lee Kay Hoon - all IBOs.  Two of them are Presidential Directors of Unicity Nerwork, from Team Nova .

Implications - This will greatly validate and add credibility to the entire MLM industry here, where many are still either ignorant or skeptical of MLM and liken it to Pyramid selling. In particular, this is great publicity for Unicity. Thanks to  Bob, Henry and Prof Lee.  What is more important is that NUSS (National University of Singapore Society) is a highly regarded and respected institution - with government links, good circulation and influential members (mostly professionals) - therefore this type of endorsement will add tremenduous credibility to our industry and Unicity. This industry has now come of Age. However many here in Singapore still don't know it or believe it.   

LT


The Graduate

Wave of the Future - Multi-Level Marketing

 

Getting onto the multi-level marketing wave.

Multi-level marketing can be an exciting opportunity for many who might want to earn some extra cash on the side. It is a very powerful tool and should not be mistaken for pyramid selling. Lee Yoke Meng gives the lowdown and shares three network marketeers’ experiences. It took the US by storm in the 1980s. In Japan, it is now the biggest market of its kind anywhere in the world, with sales in excess of US$30 billion a year. And it has taken off rapidly in every continent it has reached. This amazing business — which gives ordinary individuals the potential to turn into millionaires — is multi-level or network marketing.


Through multi-level marketing, you can gain both personal and financial freedom through independent business ownership. The concept is simple but powerful: In a multi-level structure, you build and manage your own sales force by recruiting, motivating, supplying and training others to sell products supplied by an established company. Your compensation includes a percentage of the sales of your entire sales group as well as earnings on your own sales to retail customers.


This opportunity has made multi-level marketing an attractive way of starting a business with very little money. And those who have made it have seen monthly incomes rising easily to five digits within less than a year, even if they were working only part-time on it.  The concept is not entirely new, having originated in the US some 50 years ago. But, unfortunately, this form of direct marketing lived in its earlier years in the shadows because of misconception and its being linked mistakenly with the illegal practice of pyramid selling.


Pyramid selling, unlike network marketing, is fraudulent because it makes little to no effort to market products to consumers; instead, its perpetuators make their money on recruiting: One participant recruits 10, and the next 10 recruits 100, and the 100 recruits 1,000, and so on. Ultimately, such schemes collapse as the number of willing recruits runs out. When that happens, participants at the end of the chain who are unable to recruit any more members will suffer considerable financial losses and hardship.


The proliferation of pyramid scams had, in fact, led to a blanket ban in 1973 by the Singapore government on all forms of multi-level marketing and pyramid selling through the Multi-Level Marketing and Pyramid Selling (Prohibition) Act.
Fortunately for genuine network marketeers, the situation is now changing. Last year, after a lapse of more than 27 years, the Act was revised to allow for certain exclusions to the ban. Multi-level marketing companies that fell within the terms and definitions of allowable exemptions under the revised Act are now legitimate businesses.


As Tang Guan Seng, senior parliamentary secretary for Trade and Industry, pointed out at a seminar last year, following the change in the Act: “It is not the government’s intention to discourage legitimate businesses or in any way dampen the entrepreneurial spirit that we are trying to cultivate among our citizens.


“If the government over-regulates, we will stifle innovation and push up compliance costs for businesses.
“So long as a scheme earns revenue not primarily by recruiting additional members, but through legitimate selling or leasing of products, we should allow that business to go on as usual.” Hence the government’s enactment of both a revised Act and an exclusion order to address the policy intentions of clamping down on pyramid selling while allowing legitimate direct-selling businesses to continue.


“The Act has tightened the definition of pyramid selling for a catch-all effect, while the Exclusion Order excludes legitimate businesses from the Act,” said Tang, adding that exempted businesses included insurance businesses registered or approved by the Monetary Authority of Singapore, qualified master franchise schemes and qualified direct-selling schemes. “These schemes do not favour recruitment over genuine economic activities,” he added.


The move by the Singapore authorities has come at the right time.  From established economies to rapidly emerging ones, network marketing has reached what award-winning journalist and best-selling author Richard Poe calls “Wave 4”, in which network marketing is acknowledged as a legitimate marketing tool. It is clearly heading mainstream as even Fortune 500 corporations, from IBM to General Motors, use network marketing to distribute their goods and services.  Data culled from the Direct Selling Association (DSA) in Washington, DC, USA, and other industry sources show that annual sales through multi-level marketing organisations have reached around US$20 billion in the US and US$80 billion worldwide. The DSA conservatively estimates that about eight million people are engaged in network marketing in the US alone.


“If the government over-regulates, we will stifle innovation and push up compliance costs for businesses.
“So long as a scheme earns revenue not primarily by recruiting additional members, but through legitimate selling or leasing of products, we should allow that business to go on as usual.”
Hence the government’s enactment of both a revised Act and an exclusion order to address the policy intentions of clamping down on pyramid selling while allowing legitimate direct-selling businesses to continue.
“The Act has tightened the definition of pyramid selling for a catch-all effect, while the Exclusion Order excludes legitimate businesses from the Act,” said Tang, adding that exempted businesses included insurance businesses registered or approved by the Monetary Authority of Singapore, qualified master franchise schemes and qualified direct-selling schemes. “These schemes do not favour recruitment over genuine economic activities,” he added.
The move by the Singapore authorities has come at the right time.


From established economies to rapidly emerging ones, network marketing has reached what award-winning journalist and best-selling author Richard Poe calls “Wave 4”, in which network marketing is acknowledged as a legitimate marketing tool. It is clearly heading mainstream as even Fortune 500 corporations, from IBM to General Motors, use network marketing to distribute their goods and services.


Data culled from the Direct Selling Association (DSA) in Washington, DC, USA, and other industry sources show that annual sales through multi-level marketing organisations have reached around US$20 billion in the US and US$80 billion worldwide. The DSA conservatively estimates that about eight million people are engaged in network marketing in the US alone.
What’s not ‘pyramid’ in the Act.


With effect from 1 June 2000, legitimate multi-level marketing can operate in Singapore under certain conditions.
This is because under the revised Multi-Level Marketing and Pyramid Selling (Prohibition) Act (Chapter 190), the definition of “pyramid selling scheme or arrangement” will no longer apply to approved insurance businesses, qualified master franchises and anydirect-selling scheme or arrangement in Singapore in which: the benefit received by any promoter or participant in the scheme or arrangement accrues as a result of the sale, lease, licence or other distribution of a commodity to any other person, and not as a result of the recruitment of one or more persons to be additional participants in the scheme or arrangement; the promoter of the scheme or arrangement shall not knowingly make, or cause to be made, any false or misleading representation relating to the scheme or to the commodity, or withhold material relevant to it; the promoter of the scheme or arrangement shall not make, or cause to be made, any representation to any person that benefits will accrue under the scheme or arrangement in a manner other than that specified above; and the commodity shall be distributed with a buy-back guarantee that is exercisable on commercial terms.


In Japan, network marketing may have begun only about 20 years ago, less than half that of thehistory of the US business, but it is already hitting high notes. The Land of the Rising Sun is now the biggest network-marketing market in the world: With US$31 billion of network-marketing sales in 1999, it leads what the industry calls the “Billion Dollar Club” — countries with more than a billion dollars in network-marketing sales a year.
That club is growing: Apart from Japan, the US is the next biggest, with 1999 sales of US$23.17 billion, followed by Argentina, Australia, Brazil, Canada, France, Germany, Italy, South Korea, Malaysia, Mexico, Taiwan and the UK.


What makes multi-level marketing so attractive and powerful?
The reasons are compelling. First, network marketing is an ideal form of direct marketing in this age of the Internet, of a borderless global market, and at a time when downsizing has become a buzz word for many companies everywhere. As Poe said in his book, Wave 4: Network Marketing in the 21st Century: “As jobs vanish, millions of multi-level marketing opportunities rise to replace them.” He calls it the wave of the future because more people than ever before are now realising that it is a viable financial alternative, one that has brought wealth and personal freedom to people, from ordinary men in the street to retirees and high-income-earning professionals.  Given an interest in the product and the concept, practically anyone can do it.
It is also the wave of the future because the perception of multi-level marketing today is considerably different from that of the past. According to Poe, corporate America had, for a long time, kept a watchful eye on the network-marketing revolution. Most blue-chip companies, however, hesitated to involve themselves directly.


However, since the late 1990s, a quantum shift in perception has taken place. What brought that on was that corporations were beginning to realise that conventional advertising and marketing strategies no longer worked as well as before. Market share was evaporating before an onslaught of interactive media, proactive customers and global competition.


The 21st century can also expect profound changes in shopping. Instead of going to the store, the store will come to the customer. Billions of dollars have been diverted from conventional retailers in the US to catalogue sales, televised home shopping and virtual stores on the Internet.
Views and tips on how to succeed Three Unicity Network marketeers share their experiences on what’s so hip and great about network marketing
Bobby Chia, Henry Foo and Dr Lee Kay Hoon are only three of thousands of Singaporeans who have gotten into network marketing within the past 12 months or so. But their experiences tell a similar story. Said Chia, who joined Unicity Network a year ago when it was then known as Enrich: “So far, I find the network-marketing business an exhilarating and challenging one. It is a people’s business and you get tremendous satisfaction building your organisation. It is a totally different experience, compared to traditional businesses”. In that time, he has seen his income jump to a point where he is now in the top five-per cent bracket of income earners in Singapore. And he has only been working part-time on it.


Chia’s high rate of individual growth, to a great extent, reflects exponential growth in the industry as a whole. “Our network-marketing business in Singapore has grown by more than 300 per cent over a six-month period. Likewise, I believe the industry in Singapore is growing at a similar or a greater rate. It’s increasing beyond expectations; it’s very product-driven and, for example, the orders for Unicity’s nutritional products have been fantastic,” he said.  But do not expect quick bucks. Chia says that in this business, it’s not “get rich quick” but a case of “get rich slowly at the beginning”.
“You don’t see a great deal of income in the first few months and you need time to build up your organisation,” he said. “But if the business takes off, the exponential effect kicks in and you can experience huge jumps in income month after month. A top producer can achieve a six-figure monthly income within 24 to 36 months.”


Starting with a few people, he now has more than 3,000 people in his downlines, which are already more than 10 levels deep. ‘Downlines’, ‘levels’ and ‘generations’ are typical multi-level marketing terms that allude to the people recruited and structure of the network distribution chain.
Like many other professionals who now make up a growing portion of the pool of network marketeers in Singapore, Chia, who is a law graduate from the University of Singapore (now called the National University of Singapore), is adamant about taking the right step — from the very beginning.
“My advice to would-be network marketeers is that once they see the merits and become converts to the concept, they must choose the right company to join. Or else, all their efforts will come to naught. One can evaluate a multi-level company by examining its products, compensation plan, proven You don’t need any specialqualification in this business, but it is definitely an advantage to have connections. That’s why I believe this business is best for those in their 30s and 40s who have established connections in the course of their personal and working life. It’s also important to leave favourable impressions — to be serious about what you are doing and the products you are distributing.


Henry Foo track record, whether the operation is international and ‘seamless’, and its growth potential. It should also have a strong financial backing and have been in the business for 20 to 30 years.


“On the product side, one should raise questions like whether the company has its own manufacturing plants, whether it has a strong R&D department (if this is relevant), whether the products sold are consumables and affordable, the range of products and whether the products are proprietary in nature.”
The product, in fact, is a very important starting point as one must be convinced about its efficacy. “Try the products first. Once you’re convinced, marketing it would be much easier. Draw up a list of relatives, friends and contacts, and then begin to introduce them to the products and the marketing concept,” he said on how to make a start in this line.  Chia also believes that network marketing is ideal for people who are already established in their careers, in particular, people who are in their 30s and above.


Foo, who was a former CEO in a Hong Kong-based international real-estate developer, agrees.  “You don’t need any special qualification in this business, but it is definitely an advantage to have connections. That’s why I believe this business is best for those in their 30s and 40s who have established connections in the course of their personal and working life. It’s also important to leave favourable impressions — to be serious about what you are doing and the products you are distributing,” he said.


Foo’s is another success story. Since starting with Unicity in July last year — by sheer coincidence, he said — he nowhas around 2,200 people in his downlines, created from an original 50 he signed on (of whom 10 were active). His monthly income has grown from three to five digits after nine months and, most of all, he is pleased with the excellent response he has received for Unicity’s products.


There is no mistaking the products’ importance. According to Dr Lee, former associate professor in biochemistry at the NUS, most of the health products from Unicity are scientifically proven and tested. Otherwise, he would not have been interested.  He advocates network marketing to everyone, including fresh graduates. “It’s a beautiful and fantastic concept,” Dr Lee said. He likens it to planting a seed, from which springs other plants and seeds, all of them growing to provide future income for you.


“I wish I’d known it earlier,” added Dr Lee who learnt about network marketing at a seminar.
“When I retired a few years ago, I experienced personally what it was like to have no more income coming in and seeing your expensescontinuing to run on and on. But with network marketing, you can retire, enjoy life and still get paid.


“Some people decide to start a small business when they retire. But you need thousands of dollars to do that and you can still run the risk of not even being able to break-even. But in network marketing, the outlay is so little — I spend as much on such health products even before I started on this line with Unicity. And there are no headaches over inventory, staffing, expenses and the like. Where in the world can you find a business like this?”
Where indeed. vNetwork marketeers play an ever-increasing role in this shopping revolution and as an ideal distribution freeway for companies because it makes use of the human touch.


A “Wave 4” network-marketing company would be someone like Amway Corporation, said Poe.
What began as a tiny enterprise selling a biodegradable all-purpose cleaner called Frisk is now an almost US$6 billion transnational corporation, with three million independent distributors worldwide offering more than 6,500 different products and services, and managing one of the largest websites on the Internet.


Amway has sold cars for GM, Chrysler and Ford; appliances for Whirlpool; and long-distance services for MCI. With its virtual mall on the Internet, and its huge catalogue of products and services, it is an example of how multi-level marketing companies have evolved over the years.
Even Citigroup has sold mutual funds and life insurance through a network-marketing subsidiary called Primerica.
And today’s leading network marketeers are huge in financial resources and capabilities. Unicity Network is an example.
Ranked seventh in the industry, Unicity is a mega-merger between Enrich and Rexall, two of the most respected names in direct selling. The merger in April this year has been hailed as one of the biggest developments in the network-marketing business.
The new entity forms the network-marketing arm of Royal Numico, a century-old infant-and-clinical nutrition manufacturer based in the Netherlands with 28,500 employees, 300 scientists and annual worldwide sales of more than US$4 billion. Together with another Royal Numico acquisition — General Nutrition Companies (GNC), the leading nutritional supplements supplier in the US — the Dutch company is now one of the world’s most powerful nutrition-based corporations.


According to Paul Frampton, managing director of Unicity in Singapore and Malaysia, the combined sales of Enrich and Rexall is around US$350 million, and a US$400 million is being projected for their first year as Unicity.  The name of the parent company, Royal Numico, also adds further legitimacy to the new entity, as the word “Royal” is given by the Dutch monarchy only to the most reputable Dutch companies (like Royal Dutch Shell) which have been around for more than 100 years. 


With companies like Amway and Unicity in the Wave 4:
Network Marketing in the 21st Century
Review by Lee Yoke MengIf any book can lay claim to being one of the most widely read on the subject of network marketing, it must be Richard Poe’s Wave 4: Network Marketing in the 21st Century.


The latest in Poe’s series of Wave books, Wave 4 reports on the unprecedented spread of network marketing — or multi-level marketing as it is also known in the industry. It tells of its influence on the economy, of its uniqueness and how it is exploding across borders and business frontiers to become probably the ideal distribution channel for the new millennium.


It is hardly surprising, therefore, to find practically every serious network marketer sprouting praises about this book. And it does give those less enlightened about the subject an ideal starting kit as Wave 4 is chockfull of information, including all you need to know about network marketing, how to go about it and how it can help people achieve their financial objectives in the new millennium.
region taking big leaps forward, there is no mistaking that network marketing is here to stay. In Singapore, the development, though still at an early stage, is already moving fast. In fact, observers say this ‘early’ stage is an excellent time to get into this business as it offers the most potential, and one gets to choose the best companies to work with.


The networking companies themselves have been quick to grasp the opportunity. Since the exclusion order and revised Act took effect in June, a number of these companies, including Unicity and Nu Skin Enterprises, have already made their presence felt. While statistics are not possible to arrive at, there is no doubt that thousands of Singaporeans are venturing into it.


As Bobby Chia, director of Insurite and a participant in network marketing with Unicity, said: “The Singapore market is just beginning to open up to multi-level marketing and there are tremendous opportunities out there for those who can recognise early the opportunity of a virtually untapped market and are willing to act on it.


“Moreover, international Wave 4 multi-level networking companies subscribe to the ‘seamless’ concept, whereby the world is regarded as one big market. This allows a networker in any one place to cross-sponsor another person in a different country who can then build his organisation, assuming the network-marketing company has a presence there. Singapore is in an enviable position as it is a global city. People here have wide contact with many nationalities around the world and they can capitalise on their network.


“In the US, surveys estimate that 60 per cent of households purchase goods and services through network-marketing channels. This gives you an idea of the size of the value of goods transacted. Imagine, Singapore going on this same path and the opportunities that will open up in the coming years as people catch on to this worldwide trend.”


But as Chia and other networkers also emphasise, there will always be some wolves in sheep’s clothing. So, never throw caution to the wind. Network marketing can create significant spin-offs — but only if you are working with a genuine networking company, not a pyramid set-up. Note that qualifier and you certainly cannot lose.

 

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