This is the result of a survey published in 2023 by the Brazilian Association of Direct Sales Companies (ABEVD).
In other words, multilevel marketing is a sales model that generates profit. Otherwise, Brazil would not be ranked 7th in the world in direct sales and the leader in the segment in Latin America, according to the World Federation of Direct Selling Associations (WFDSA) .
In short, multilevel marketing is a network-based business model (no pyramid scheme, calm down!), in which all people involved in resale earn a share of the profits within the business, depending on their sales performance.
The cosmetics company Jequiti is an example of how multilevel marketing works and how successful this business model can be.
In this article, we will cover several important topics for those who want to undertake in the MLM area, such as:
what is multilevel marketing;
how multilevel marketing works;
how to grow in multilevel marketing;
main characteristics of multilevel marketing.
Are you interested in the subject? Enjoy reading!
What is multi-level marketing?
Multi-level marketing is a business model based on the concept of a network made up of independent distributors who work with direct sales and form partnerships with new sellers.
From this perspective, distributors' profits and remuneration occur at levels, depending on sales performance and commissions. The more a distributor sells, the more he earns and encourages people in his network.
In other words, multilevel marketing is an efficient format for boosting sales, based on the combination of business strategies such as:
incentive and reward systems;
possibility of promotion and growth based on performance;
“win-win” model not only for distributors, but also for people associated with their network.
Although multilevel marketing is very common today, it is worth remembering that the sales model emerged in 1940, in the USA, with the doctor Carl Rhenborg, protagonist of a successful trajectory with multilevel marketing .
How does multi-level marketing work?
MLM works with direct sales, through the marketing of products distributed to the end consumer. People who wish to expand the network and invite other members receive a bonus.
Contrary to what many people think, multilevel marketing does not work like a pyramid scheme — an illegal practice in Brazil, according to Law 3.706/202 . You probably thought “so, how does multilevel marketing work and what are the main differences in relation to other models?”
The main feature of multi-level marketing is that the bonus scheme for distributors is limited. The focus of the business is not to attract more and more people, but to provide a healthy growth scheme for the company.
In this way, a distributor can become a leader and earn more according to his skills in the business world.
What are the main characteristics of multilevel marketing?
Doing business in a network and thriving in the world of sales, independently, is a challenge.
If you are considering investing in multilevel marketing, it is important to understand the main characteristics of this sales model. Below, we provide more details!
1. Productivity-based earnings system
Achieving a fair salary, in accordance with the efforts made in winning new customers and retaining existing ones, is the dream of many people who work in sales. With MLM (Multi-Level Marketing), it is possible.
The earnings system is based on each distributor’s productivity, at different levels. In the case of the company doTerra, which specializes in essential oils, the career plan ranges from entry-level to “diamond president”.
In addition to the remuneration corresponding to the number of direct sales, distributors earn commissions in relation to the sales of people they refer to the network.
Each level offers competitive advantages to the entrepreneur, ranging from prizes and training to trips.
2. Sales without intermediaries
To join a multi-level marketing company, you need to be willing to serve the end customer.
The business model is similar to a franchise system. Generally, you need to invest in a product kit and resell it to your customer base, based on a suggested price and the brand's quality standards.
There are also companies that work with catalog sales, but the initial investment is very common.
If this proposal interests you, get ready to study the company, delve deeper into content on branding, customer service and financial management.
After all, you will be acting independently, but you are part of a network and represent a brand. Don't forget!
3. Marketing the nests
There is no magic formula for how to grow in multilevel marketing without considering the network model. To reach a level recognized by the brand, earn high commissions and make the business worthwhile, you need to keep in mind that success is also collective.
In other words, everyone you refer to your network needs your support and encouragement to win clients, recruit salespeople and increase their profits. When someone in your network is successful, you win too!
Building a solid sales team and reaching a high level in MLM doesn't happen overnight.
It is important that you learn to work well alone and also seek constant development to deal with partners and clients.
How to grow in multilevel marketing?
If multilevel marketing is definitely a business that fits your professional plans, you need to learn how to grow in network marketing. We have put together some tips that can help you. Check them out!
1. Nurture the entrepreneurial spirit
There is no way to succeed in multilevel marketing if you are a person who is not willing to take risks and overcome daily challenges.
Mary Kay is a brand that has become well known in recent years for its incentives for consultants who earn everything from trips to cars.
To grow in multilevel marketing, all resellers and their teams need to hit targets and increase points through:
direct sales;
registration of new partners;
ability to manage and encourage the team, among other functions.
It's not an easy routine, so you need to italy business fax list nurture your entrepreneurial spirit if this is the path you choose. Invest in free courses , look for inspiring stories to understand if this is your profile and go for it!
2. Study the company and its strategies
You need to master the business model of the multi-level marketing company you have decided to represent. Without strategic knowledge, there is a risk of sales stagnation and you may become demotivated on this journey.
Therefore, accept invitations, attend launches, contact other distributors in your network and seek knowledge about the company's branding strategies, as well as its strengths and weaknesses, and get to know the competition. This perspective will make a difference in your results. Believe me!
3. Invest in promoting your business
As the saying goes: “out of sight, out of mind.” Therefore, if you want to stand out in multilevel marketing, invest in content marketing and strategies to promote your products and build relationships with your customers and partners in your network.
Read also: How to promote a digital product? 5 tips (and 1 bonus )
Learn how to stand out and earn more!
There is no sales model that guarantees 100% of targets will be met every month. The success of any entrepreneur lies in persistence and investment in strategies and knowledge that improve their journey.
On the EAD platform blog, we have a variety of content aimed at those who want to stand out in the market and make more profit. Learn about online sales platforms , investing in digital marketing or how to set up a complete structure for assembling and marketing courses and training.
Multilevel marketing can be very successful, as long as you follow market trends and have the desire to grow in entrepreneurship. You can never have too much knowledge.
Want to learn more about how to increase sales and which business models are best suited to your needs? Check out other content available on the EAD Plataforma blog .