Last week police raided the offices of the Amway India Enterprises Ltd,

The state was the first in the country to come out with detailed guidelines for the direct selling industry, which is evolving globally with rapid technological development.
However, the guidelines that incidentally are being relied upon by the federal government to enact a national law to regulate the industry have not helped law enforcement agencies in the state to make a distinction between genuine direct selling firms and fake multi-level marketing (MLM) companies.
While about 10 multi-level marketing companies, most of them headquartered outside the state, have robbed people of millions of rupees in the last three years, the direct selling companies that have been providing jobs to thousands of people in the state, especially women, have been finding the going tough in the market vitiated by the fly-by-night operators.
Last week, the police raided the offices of the Amway India Enterprises Ltd, the leading direct selling company in the country, across the state, closed down its four direct selling centres and arrested their area manager. All India Trade Union Congress (AITUC) leader, Kanam Rajendran, said the action was based on the wrong perception that Amway was a money-chain operator.
He said the trade unions representing direct selling companies had recently met Chief Minister Oommen Chandy and Home Minister Thiruvanchoor Radhakrishnan and explained the business models followed by the direct selling companies. In the light of the latest crackdown on Amway he has urged the government to frame a legislation to protect employees and distributors of direct selling companies.
Amway India Managing Director William S. Pinckney said the company has been selling its products directly to the consumers in their homes through a network of salespersons offering commission for the sales only. He said there was no compulsion on the sellers to buy products unlike in the case of MLM companies that permits drawing of commission by the direct sellers/distributors from their downline direct sellers/distributors at multiple levels in depth.
Pinckney said Amway was also refunding payment for products that the seller could not sell. Not many direct selling companies have this provision, he added. He said a federal law for governing the direct selling industry would be of immense benefit to not only the industry but also the country since it offers significant economic advantages.
Apart from the tax they pay; the direct selling companies significantly contribute towards self-employment generation. In India, Amway alone has over a million active sellers. Over 50,000 people in Kerala are engaged in the industry. As over 60 per cent of sales force comprise of women, the industry has been facilitating women empowerment in a big way. Besides providing equal opportunity, they create a source to increase the family income.