7 January 2013

Rwanda: Network Marketing Turns Dreams Into Reality

After reading the success stories of people who have made it through network marketing, recruits usually start dreaming about becoming millionaires.

Network marketing consists of independent distributors who register with a company to purchase and distribute the company's products while recruiting a new chain of distributors, and registering them under their names as partners from whom they get bonuses.

Those partners also recruit new distributors and so on, making a chain or pyramid.

Gilbert Mizero is a member of Forever Living Products (FLP), an American company selling food supplements and other pharmaceutical products.

While planning a wedding worth about Rwf 7m two years ago, Mizero realised he could not raise this amount of money while earning Rwf 300,000 monthly, because for three years he had been working, he had saved less than Rwf 1m.

He decided to venture into business but still failed to raise half the sum.

Mizero decided to shift to the network marketing in February last year on an invitation of a friend and got married in September having earned a quarter of the money he had planned for his wedding.

For Mizero to register, he paid Rwf 135,000, corresponding to two case credits and he obtained products to start up.

According to the FLP principles, distributors get ranked following the number of case credits they have earned and the ranks of the distributors who are registered under their names.

A distributor has to start as new distributor, then becomes supervisor and goes through all the other ranks until they become manager, a level of experienced distributors.

One million jackpot

"In June I was already a manager, with 166 case credits," Mizero said, adding that in that particular month, he earned about Rwf1,215,468.

"Since I became a manager, the average I get per month is Rwf1.2m," he said.

This money is obtained by purchasing FLP's products available from a shop in Kigali and distributed to interested clients, plus three different bonuses.

Personal bonus is earned every month when someone reaches the second rank of the distributor, the new distributor bonus is granted for every new distributor one brings in the chain, while a group volume bonus is granted every month according to the volume of four generations under a distributor's name.

Having a generation of 200 distributors, Mizero's vision is projected in five years where he dreams of owning a house worth Rwf 300 million and a car priced at Rwf 50 million.

Mizero believes that just like his role model, Rolf Kipp, who allegedly makes an estimated Rwf 25m every month, this dream will come true if he keeps working six hours per day.

His daily work involves building a team, holding business opportunity meetings and moderating sessions around the country to attract new distributors.

So far his clients are brothers, parents, his church members, former classmates and friends.

Like Tianshi and Questnet, FLP started network marketing in Rwanda between 2006 and 2007 but were banned shortly after by the Ministry of Health over inefficient distribution.

They resumed operations after fulfilling requirements.

Standards of food supplements and other pharmaceutical products are regulated by task force of pharmacies in Ministry of Health.

Patrick Mwesigye, the head of this task force disclosed that "the companies had been banned because they were confusing the community, calling their products medicines, while they are food supplements".

"We have a strong network today and are in good terms with the regulatory organs in the country," says Gilbert Hakizimana, the managing director of FLP in Rwanda.

The Ministry of Health also requires that these companies trade from identified shops.

Given that the business welcomes any one regardless of the level of education, they should also make sure that all the distributors are well trained so that they do not confuse locals.

According to the Minister of Trade and Industry, Francois Kanimba, the system exists in various countries and some companies prefer it when they do not want to open branches in a given country.

"I do not mind as long as they do not break the trading rules in Rwanda," he told The New Times recently.

Athanase Ruhumuriza, from 4Life, another networking company told new distributors at a session organised to teach them about the business that there is no selfishness in this business.

"One needs to help his predecessors to go forward because the more your partners achieve, the more bonuses you get from them," Ruhumuriza, who is ranked 'Diamond', one of the senior ranks , said.

Other ranks in the company that started operations in Kigali in September last year are leader, presidential diamond, international diamond, gold and platinum diamond.

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