Multilevel marketing business model gaining popularity in Latin America

Global Business

Multilevel marketing business model gaining popularity in Latin America

The promise of an independent life, working from home and making big money are all part of the sales pitch used by multilevel marketing companies to expand their sales forces. This business model has become popular in Latin America.

CCTV America’s Michelle Begue reports.

Multilevel marketing business model gaining popularity in Latin America

Multilevel marketing business model gaining popularity in Latin America

The promise of an independent life, working from home and making big money are all part of the sales pitch used by multilevel marketing companies to expand their sales forces. This business model has become popular in Latin America. CCTV America’s Michelle Begue reports.

Diego Sanchez had his own used car sales business with his wife when he was offered the opportunity to join Zrii, a multilevel marketing company operating in Colombia.

“They approach you not so much through the product but through your emotions. They tell you ‘Listen, you can achieve economic independence, you are going to get to travel and acquire cars and houses because your income will be without limits,’” Sanchez said.

Plenty of successful multinational corporations, like health and wellness brand “4Life” or cosmetic giant Avon, are designed as MLMs. Products are sold by independent salespeople who are encouraged to recruit and train their own sales team under them and they will earn a percentage of the sales.

In developing nations like Colombia, the prospect of making quick, easy money is appealing, especially when the alternative is unemployment or low paying jobs.

The Colombian Superintendent’s office said these MLMs are legal in Colombia but they are closely monitored to sniff out those that may be operating as a pyramid scheme.

In Colombia an MLM must have a physical office in the country and a webpage that fully discloses the types of compensations members will receive for the sale of products, not recruitment into the network.