Though the network marketing is getting very popular around the world, yet it is criticized by many people. And it is not considered a good business at all.
From the point of view of a company
- The company faces difficulty in sales forecasting leading to increased risk of under or over stocking of various items.
- Establishing close relationship with the customers is difficult, though this is one of the strongly required strategies of successful network marketing.
- Brand building is impossible without advertising.
- Distributors often become largest customers and hence take over control of the company.
- The company cannot keep control on its large sales team’s actions.
From the point of view of a distributor or a network marketer
- The network marketing is not easy at all.
- It causes concern and frustration because of flattened sales graph or low sales turnover in the absence of training and marketing skills.
- It is based on contradictory belief, that earning money needs investment of money, time, and energy and on the other hand it is believed that network marketing needs very little investment.
- The network marketing/MLM industry has a very shady reputation. Many people feel it is a scam or just a ponzi scheme. And most of the relatives or friends do neither want to get involved nor indulge in any such purchase or selling.