Direct Selling Ethics eBook

Page 1

Professional Marketing

Overview “QNET strives to provide transparency and ensure that its business model is properly associated and related to a proper framework. Our commitment to instill professional business practices into each Independent Representative remains of paramount importance to us. We have carefully created the following three modules because we believe that business ethics and social responsibility are the building blocks for success in network marketing – a business based on trust and cohesive relationships.� Mr. Timothy Harney Senior Legal Officer

Ethical Marketing Module 1:

QNET as a Legal Direct Selling Company

Direct Selling It is the sale of a consumer product or service away from a fixed retail location, marketed through independent sales representatives. Taken from the website of the Direct Selling Association of Singapore (DSAS), “Direct selling is recognised as a dynamic marketing approach in the distribution of products and services directly to consumers in their homes or work places�. An important component of Direct Selling is Network Marketing (NM). Network Marketing is where the company and its products are marketed directly through word of mouth.

What is Network


“Network marketing has proven itself to be a viable and rewarding source of income. There have been some remarkable examples of success, earned through diligence, enthusiasm and the right product combined with timing. As with so many issues, there are tangibles and intangibles involved, but success is not a total mystery, and that applies to network marketing as well”

Donald Trump Leading American Entrepreneur

“Network marketing is a legitimate business. First, it's based on providing people with real, legitimate products they need and want at a fair price. While some people do make a lot of money through network marketing, their financial benefit is always the result of their own dedicated efforts in building an organisation that sells real products and services.”

Entrepreneur Magazine

“Network marketing is the big wave of the future. It's taking the place of franchising, which now requires too much capital for the average person”

Jim Rohn

(millionaire mentor of Anthony Robbins)

Understanding Direct Selling

Network Marketing vs. Pyramid Scheme Regular NM is not a ‘get rich quick’ scheme.

Regular NM companies provide business tools.

Regular NM companies have a solid training system.

Regular NM companies have proper policies, procedures and ethical marketing codes.

Network Marketing vs. Pyramid Scheme Regular Network Marketing Companies deliver quality products or services. NM Distributors can earn commissions by selling the company’s products & services.

NM companies have restrictions in their compensation plans. NM companies don’t encourage product overloading.

Case Study India 23 April 2013 Mail Today reported on Friday that TVI Express (Travel Ventures International) had cheated lakhs* of online investors after luring them with attractive holiday packages and incentives. The members were initially required to pay an amount of Rs 15,000 each (about USD 270), and they were promised good returns for adding new members. *A hundred thousand in Indian currency.

What Travel Ventures International Express Distributors failed to see? Travel Ventures International Express intentionally misquoted celebrities like Sir Richard Branson, Warren Buffet, Donald Trump, Bill Clinton, etc. to make them appear as endorsers. Travel Ventures International Express did NOT explain what are their products / services. Travel Ventures International Express did NOT protect its name or domain name. Travel Ventures International Express did NOT answer any questions about law compliance. Travel Ventures International Express did NOT list any of its officers or owners. Travel Ventures International Express claims to be "next big giant in the direct selling industry". Yet its own FAQ says "You don’t need to sell any products."

Without product sales, how can it be called a "direct selling" company?

PROTECT YOURSELF – Do Your Homework!  Beware of investment schemes that claim to guarantee income or winnings , particularly where you need to recruit new members to make money.

 Beware of investment schemes that don’t involve the sale of genuine products or services of value and make money only by recruiting new members.  Remember that family members and friends may try to involve you in a scam without realizing it is a scam ; you should seek independent advice.  Do not let anyone pressure you into making decisions about money or investments.

“Pyramid selling schemes are not legitimate businesses but scams promising rewards of easy money that never arrives. People who are tempted to take part in pyramid selling should note of the serious penalties they could face.� Rod Sims Australian Competition and Consumer Commission Chairman

QNET is a member of the Direct Selling Association in the Philippines, Malaysia and Singapore and the Business Ethics Institute of Malaysia (BEIM).

The DSA has defined a pyramid scheme as an endless chain scheme which does not include an actual product/service.

QNET India is a member of the Forum for Direct Selling Companies and Consumers in India (FDCI )

The Best Products in the Right Business

QNET provides a reasonable cooling-off period which is beyond the standard regulatory requirement and industry practice.

Policies & Procedures, Compensation Plan, Terms & Conditions of purchase are clearly presented to IRs and available for easy retrieval in Virtual Office.

QNET require the sales field to use only approved descriptive materials, and to offer prospects/IRs full disclosure of return policies, after-sales services and delivery dates which are all in the IR’s Virtual Office.

QNET provides comprehensive training materials and continuous personal development trainings to the IRs.

Ethical Marketing Module 2: Understanding Ethical Marketing

Ethical Marketing Ethical Marketing is a process that generates customer interest in products/services while building strong customer interest and relationships. It creates value by incorporating social and environmental considerations in products and promotions.

Ethical SALES PRACTICES Do not use false, misleading, deceptive or unfair sales practices. Treat your prospects/customers the way you want to be treated as one.

On VERBAL PROMISES Do not make verbal or other overpromising presentations concerning the products and services. Do not oversell.


Fast and easy business.

Recruit PEople

Invest! I'll build for you.

You’ll only need to work in the beginning.

I'll put people under you.

Get rich quick.

Case Study IR A sold a QVI Club package to IR B. As selling script, IR A mentioned:

“We have great 5 star hotels and resorts in any country you want to go. You’ll get cheaper rates for very good quality because you are a club member.” It sounds so good. IR B immediately bought and used the service. He filed a serious QVI complaint after usage because of false promises and high expectations .

What Went Wrong? IR A does not understand QVI.


QVI Club is a hospitality product of QNET. It is NOT a travel agency but a vacation club promoting its own Home Resorts, Limited Collection Resorts and over 2,000 hotels and resorts of its affiliated vacation clubs around the world. QVI is not NOT a timeshare business. Hotels and resorts of QVI Club do not emphasise on star rating. CHEAPER? It is appealing to someone who values holidays that can be enjoyed within 5 to 30 years at today’s price.

Ethical ADVERTISEMENTS Promotional literature and advertisements shall not contain any product, description, claims or illustrations that are offensive, deceptive or misleading. No lies.

On INCOME EARNINGS Do not guarantee, promise, represent or warrant to prospects a certain level of income.

You will reap what you sow.

On PRODUCT & COMPENSATION PLAN PRESENTATIONS Product and Compensation Plan presentations and demonstrations shall be accurate and complete in particular with regards to product descriptions and benefits.

No more, no less.

On PROSPECTING Downlines from outside your Line of Referralship should not be enticed, in any way to sign under your organisation. Respect and be respected.

4 Important Traits of a Professional QNET IR

QNET Independent Representatives must at all times observe, adhere to and strictly follow QNET’s Code of Ethics and Ethical Marketing Guidelines.

Ethical Marketing Module 3: The QNET Code of Ethics Let’s understand it together‌


Code of Ethics

As a QNET Independent Representative, I will‌ Present the Compensation Plan accurately and honestly, clearly portraying the level of effort required to achieve success

Present realistic income possibilities only, and solely in relation to the appropriate effort involved.


Code of Ethics

As a QNET Independent Representative, I will‌ Present the benefits and information of the business as stated in the Company’s official literature and from my own personal experiences; Accept and carry out to my best effort all duties expected of an IR and Referrer, including training and supporting the Downlines in my organisation.


Code of Ethics

As a QNET Independent Representative, I will‌ Abide by all Policies & Procedures that are applicable to the operation of my business; Strive to ensure that my Downlines are satisfied with my service and leadership;

Answer the questions and queries of prospects and Downlines fairly and honestly.


Code of Ethics

As a QNET Independent Representative, I will‌ Refer only those people that I have developed as my own Downlines and/or business prospects; Always encourage prospect(s) developed by their initial referrers to be referred by them as well.


Code of Ethics

As a QNET Independent Representative, I will‌ Be clear that QNET is a network marketing opportunity in which my income is related to my marketing and leadership skills as well as my own personal efforts; Treat all prospects, Downlines and associates with respect, goodwill and professional courtesy.


Code of Ethics

As a QNET Independent Representative, I will‌ Not entice Downlines from outside my Line of Referralship to sign under my organisation; Not misrepresent the QNET business in any way; Not use any advertising that I know may be false or misleading;


Code of Ethics

As a QNET Independent Representative, I will‌ Be fair and just to my Downlines and associates, and not engage in practices that may reflect unfavourably on myself, my organisation, the Company, and/or the industry;


Code of Ethics

As a QNET Independent Representative, I will‌ Conduct myself in such a manner as to reflect only the highest standard of integrity, frankness and responsibility because I recognise that my actions as an IR with QNET have far-reaching effects;


Code of Ethics

As a QNET Independent Representative, I will‌ Use the information contained in all QNET websites for my personal, non-commercial use only.

Not create any unapproved or illegal websites, which may tarnish the image of QNET and its related companies.

“Professional Marketing is the basis for a stable, long-term growth of your business. You always have to act according to the QNET’s Code of Ethics to secure a prosperous future for your business and the business of all IRs worldwide.” Gary Nehra

Legal Counsellor of the QNET Legal Advisory Board

SOURCES: What is Direct Selling Video – Direct Selling Education Foundation Direct Selling Definition – Pyramid Scheme Definition – The Free Dictionary online Case Study on Pyramiding – What TVI Distributors failed to see? -- See: Protect Yourself – Do Your Homework – On Ethical Sales Practices – On Advertisements – Selling Do’s and Don’ts – QNET Code of Ethics

IMAGE CREDITS: Slide 12: Jim Ron image Case Study on Slide 17: Ethical Sales Practices Case Study on Slide 22: Ethical Advertisements