Direct Selling vs Online E-commerce Platforms

Back in 2nd September 2021, my husband and I together with my business mentor had a Zoom meeting with one of the top multi level marketing (MLM) leader in Malaysia.

Zoom Live

His name is En. A and he was in the MLM industry for more than 10 years promoting water filter equipment.

He had a disagreement with the direct selling company he was part of and they parted ways leaving his +RM200,000 monthly income from his MLM business.

When I heard his story, I was quite surprised but En. A does not seem too bordered with his past.

He was looking for a new direct selling company to join so that he can rebuild his 6 figure monthly income business quickly.

En. A had found me through the content I published on my blog and he wanted to know which direct selling company I am with.

The four of us had a discussion in Zoom for more than 90 minutes.

En. A was very clear on the type of product he wants to sell in his new MLM business venture.

His focus is on the “health and wellness” niche.

Me and my husband are partnering with BE International and all the company’s products are in the health and wellness market.

BE International seems like a good match for En. A.

Online e-commerce marketplaces illegal sellers

During the discussion, En. A brought up an issue faced by all MLM and network marketing business leaders in the country.

“How does the company deal with illegal sellers of direct selling products on online e-commerce marketplaces?”

Some of the online e-commerce platforms discussed were Lazada, Shopee, Qoo10, Ebay etc.

Most people do not that the issue of illegal sellers on online e-commerce platforms is faced by all direct selling companies in Malaysia, Singapore, Indonesia, Hong Kong, Brunei etc.

It is an industry wide problem.

En. A did mention, in his previous company, they also face issues of illegal sellers listing their water filter equipment on online e-commerce platforms and under cutting the selling price.

This has created a problem with all the MLM industry leaders because the illegal sellers are taking sales away from legitimate Independent Business Owners and Distributors of direct selling companies in the country.

En. A wanted to know what are the steps taken by BE International to counter this problem.

Firstly, let me explain why illegal sellers on online e-commerce platform (OeCP) is a problem for the direct selling industry.

Direct selling method

Direct selling companies are engaged in the business of manufacturing, marketing and selling of skin care products, functional food, nutrition and supplements and other related products and services.

Direct selling companies sell these products using a system where the products are sold through Independenent Business Owner (IBO) or Independent Distributors.

These IBOs and Independent Distributors are authorised by the direct selling companies with a Distributor’s Contract to market, distribute and sell the company’s products.

They are then required to provide customer service directly to their customers.

IBOs and Independent Distributors are provided with training periodically to carry out these tasks.

The direct selling industry in Malaysia is governed by the Direct Sales and Anti-Pyramid Schemes Act 1993 (DSAPS).

DSAPS was enacted in order to regulate the Direct Selling industry and in the interest of protecting consumers.

DSAPS defines what Direct Selling is and has certain limitations to safeguard the industry and consumers particularly with the following:

Section 19A Sales Through Electronic Transaction:-

1) No person shall supply by sale, or advertise for the supply of, through electronic transactions, and goods or services except in accordance with this Act or the Regulations.

Section 4 Direct Sales Business To Be Carried Out Only Under License:-

1) Subject to sections 14 and 42, no person shall carry out any direct sales business unless it is a company incorporated under the Companies Act 1965 and holds a valid license granted under Section 6.

Direct selling companies also sell through online channels via their websites and other social media sources.

Online e-commerce platforms (OeCP)

Online e-commerce platforms (OeCP) are platforms provided for individuals to market and sell their products.

Direct selling products are sold on these platform without authorisation from the direct selling companies.

What OeCPs offer are:

  • Logistical support
  • Delivery services
  • Payment services
  • Collection gateways
  • Listing of the products
  • Promotion of products

The OeCPs make money by charging a percentage on all sales transactions on their platform.

This makes the OeCP an essential part of every sale.

The solution

The issue of illegal sellers selling direct selling companies’ product on online e-commerce platform has been around ever since the existence of online marketplaces.

All direct selling companies are taking active action to take down their product listings on online e-commerce platform including BE International.

BE International has issued notice to warn the public not to buy the company’s brand product from online e-commerce platform.

Solemn Declaration

The above is a Solemn Declaration issued by the company.

However, most of the actions are ineffective because when the listings have been taken down and the illegal sellers’ Distributor’s Contract terminated, a new batch of illegal sellers will list the products again the following month.

Legal letters have also been sent to the online e-commerce platform owners demanding all the direct selling products to be taken down but unfortunately the platforms are slow to take any effective action.

En. A understood the situation because he faced the same issue with his past water filtration equipment business.

However, I told En. A a “lucky break” come to BE International in the month of August 2021.

One of the top selling functional food product from BE International is Belixz Shiruto from Japan.

Due to the popularity of Shiruto in the market, there are scammers trying to cash in on the situation.

The scammers started to produce fake / imitation Shiruto and selling it as original product from Japan at very cheap prices at online e-commerce platforms.

BE International started to investigate and collects proof on fake Shiruto in the market.

In August 2021, they have the proof they needed on fake Shiruto and made an official police report.

Subsequently, BE International issued the notice below.

Fake Shiruto Notice

You can read the notice on BE International official Facebook page here.

Now with the police involvement, any illegal sellers of BE International brand product on online e-commerce platforms will be exposed to bigger risks.

The illegal sellers don’t just risk having their Distributor’s Contract terminated, the company will also take civil action against them.

BE International now has a strong and definite solution to the issue of illegal sellers of direct selling product on online e-commerce platforms.

After our Zoom meeting, En. A was quite pleased and he decided to register as a member of BE International and become of my direct frontline team member.

Welcome En. A and we look forward to building an amazing network marketing business with you locally and internationally.

Have you been a MLM business leader and looking to partner with a new and dynamic network marketing company?

If you are, click the link below to contact me on WhatsApp and we can discuss how we can work together.

Click here for WhatsApp chat

By | 2021-09-06T13:13:08+08:00 September 5th, 2021|Business|2 Comments

About the Author:

2 Comments

  1. Edmund T. 13/09/2021 at 1:16 pm - Reply

    This has always been an issue not only in Malaysia, but in Singapore also. All the sellers on places like Shopee, Lazada..are trying to undercut each other. It’s like a cowboy town on those platform.

    • Lynn 13/09/2021 at 2:30 pm - Reply

      Hi Edmund, thank you for your comment. I can really understand how you feel. What I can say is, you should not buy premium items on online e-commerce sites because it’s cheap. There are reasons why the items are cheap…usually because it is fake or imitation product.

Leave A Comment