NMart Review: Why does a shopping mall need MLM?
Shopping Malls. We arrive at them, buy stuff and go home. We meet people for a cup of coffee. Or perhaps we need some inspiration for a gift and hope that a few hours wandering around aimlessly will provide some much-needed inspiration.
Whatever the reason, if I attempted to draw a relationship between MLM and shopping malls you’d be right to assume I’d be drawing a pretty large bow to compare the two with.
Enter India’s NMart, who attempt to do just that and today we’re going to take a full review of the NMart MLM business opportunity.
So why does a shopping mall need MLM? Let’s find out.
Founded in 2008, Nmart is the MLM arm of parent company ‘New Look MultiTrade’, which itself was founded in 2007.
The CEO of New Look MultiTrade is a Mr. Akil Patrawala (photo right) with Gopal Shekhawat as acting Chairman and Managing Director. The company claims it is involved in ‘real estate, commodity trading and retail stores‘.
Commonly abbreviated to just NMart, ‘NMart Retails’ is the actual name of New Look MultiTrade’s retail division. This division handles both the shopping mall side of the business as well as the MLM home based business opportunity.
Upon launching the company in 2008, NMart projected it would build 11,000 stores in 5 years. Currently, almost three years into this projection the company has managed to open 70 NMart stores (0.6% of it’s target).
I’m not sure of the exact financial relationship between the two divisions operating under NMart Retails but they do intrinsically rely on eachother via retail sales.
For all intents and purposes, it can be considered that the MLM side of NMart Retails is membership program utilising the company’s retail offerings as a product line.
The NMart Product Line
With the seperation of the retail arm and MLM arm of New Look MultiTrade above, it’s important to note that on the retail side of things, the NMart business opportunity itself offers no retail product.
Products can be bought at retail from the stores, but NMart members themselves have nothing to actually sell other than NMart memberships.
Commissions are paid out on instore purchases by members, but it is the company that makes these sales, rather than NMart members.
The NMart Compensation Plan
NMart offer binary commissions and this is done by creating a binary organisation underneath you when you join the company. A binary organisation starts with you at the top and then branches out two legs under you. These two legs branch out into two new legs and so on and so forth.
As you grow your NMart binary organisation, it should start to look something like this.
As you fill your binary organisation, each week NMart tallies up the amount of new pairs of members (taking one new member from your left leg and one from your right) and for each new pair that you have, NMart will pay you a commission of Rs. 600 ($12.30 USD).
This weekly earning is capped at 100 new pairs of members (meaning you’d have recruited 200 new NMart members for the week).
Note that once a new member has been counted in a paring, they cannot be used again to make a new pair.
I’m not 100% sure on this bonus (couldn’t find an English explanation and the compensation plan documentation is woefully unclear), but NMart’s retail bonus appears to be a Rs. 200 ($4 USD) commission paid out everytime someone is placed in your binary organisation via your upline.
Spillover occurs when your upline recruits members and they are placed within your binary organisation. These members don’t count as your directly recruited members (for binary pairing) but they do count to your overall commissions within the binary.
Jupiter Royalty is a bonus pool paid out each month and consists of Rs. 100 ($2 USD) for each new member brought into the company for that month.
At the end of the month this pool is divided by the total number of qualified Jupiter Royalty members for that month and paid out.
To qualify for the Jupiter Royalty bonus, members must recruit a minimum of 100 pairs (200 new members). I believe the Jupiter Royalty qualification process is a once off requirement and is not per month.
Like the spillover income, this one took me a while to get my head around as it’s not evidently clear what this part of the compensation plan is about.
From what I can gather, the Repurchase Income is a commission paid out on the actual purchases of members in your downline (I don’t believe they must have been personally sponsored by you).
The payout ranges between 0.16% to 1% of the total cost each item sold and is grouped into four categories. As far as I can see, NMart do not divulge what products in their retail stores are in which categories.
The Repurchase Income is paid out monthly.
In addition to the binary commissions paid out on new member pairs, NMart also provide incentives to members to reach specific pair targets.
These incentives range from real estate, computers, cars, gold and home theatre.
Pairing bonuses start at 10 pairs and work their way up to 5000 pairs. In order to claim these incentives however, it’s not made clear whether or not these targets have are a running total, or whether they need to be met monthly, weekly or daily.
Given that 5000 new pairs equals a new house, I’d be inclined to say these are most likely daily or weekly targets, however I’d welcome clarification on this.
Those wishing to join NMart must pay a membership fee of Rs. 5,500 ($112 USD). I believe this is a two year membership fee and is renewable thereafter.
Included in your membership is Rs. 10,560 ($216 USD) worth of product vouchers (paid out at Rs. 220 ($4.50 USD) every month for 48 months) and a loyalty bonus of Rs. 11,000 ($225 USD) after 48 months.
Note that in order to qualify for the loyalty bonus members must spend a minimum of Rs. 72,000 ($1475 USD) in the 48 month waiting period.
Additionally in order to maintain your NMart membership and participate in the compensation plan, members must spend a minimum Rs. 1000 ($20.50 USD) in NMart’s retail stores a month.
The concept of combining a series of retail stores with MLM and offering no online options, as if often the case these days, is certainly an interesting one.
When I first looked at the NMart opportunity I imagined that the MLM side and retail sides of the business were separate but it appears that they are one in the same.
That said, it is disappointing to see that so much emphasis is placed on recruitment of new members via the binary pairing commission and fact that you cannot sign up NMart members outside of the MLM business opportunity.
That said, the membership monthly minimum spend does ensure that people will be going to the company’s stores and purchasing something. I guess the idea here is that NMart are banking on people covering commission payouts with their retail purchases (whether they aim for the loyalty bonus or not).
You do have to recruit people to earn decent money (the repurchase bonus) with NMart but I guess it’s not in the traditional sense as you’re recruiting more in an affiliate capacity, but with a MLM residual backend. You and the company are actually banking on members to actually purchase products from the stores, whereas the pairs and spillover commissions are just small bonuses.
It is noted that with such low percentages on product sales paid out (1% and lower) you are going to need a lot of members in your binary to start earning a decent commissions.
Personally I believe if the company is to be a success the pairing and spillover bonus should be gotten rid of altogether, but I guess it’s harder to sell a long-term residual income without some sort of immediate upfront commission.
Given this of course, prospective NMart members need to take into consideration whether or not they’re actually going to be saving money with NMart malls (which in all honesty just sound like traditional supermarkets, not malls).
If NMart winds up being not competitive, people aren’t going to shop there and then you enter the dangerous territory of people just signing up for the recruitment bonuses with no intention of spending more than the monthly minimum spend (effectively autoship).
With nobody spending at a retail level the system naturally doesn’t work and then the company has a real problem.
I figure the best way for prospective members to verify this is to swing by one of the listed ‘operational’ stores on NMart’s website and do a price comparison.
Smart existing NMart marketers should already be taking prospective members on tours through the stores, as this should be your strongest selling point.
Retail is notoriously run on thin margins so it’ll be interesting to see how a a supermarket goes combined with a MLM plan. Traditionally these sorts of opportunities are bundled with an online store with a central distribution warehouse which means high shipping costs for members who don’t live near the warehouse.
Or worse still the company charges a flat shipping rate and penalizes all members.
NMart’s localised stores do for now mean you’ve got a bit of a limited audience to market to, but as the company expands new markets open up. Not that you can’t target nearby areas already, but you will of course obviously need to appreciate how far people are willing to travel for their shopping.
Expansion wise I do note that 70 out 11,000 is a bit slow in the progress area but if the opportunity is making money for those involved and the retail sales are there, expanding at this rate perhaps isn’t such a bad idea.
With a slightly high membership fee (more expensive than Costco) and physical retail storefronts, I don’t see NMart doing a runner (unless the retail side of things falls apart) any time soon either.