Multilevel Direct Selling
All you need to know about the success of our business model.
What is Direct Selling?
First you have to know how the difference between Distance Selling and Direct Selling. While in the first the sale is done without personal contact the second is done through a dealer or agent through the personalized demonstration of the products.
It is a business model based on the personalized attention directly to the consumer outside a commercial establishment, by a distributor or brand agent who works independently.
What is Multilevel Selling?
It is a business model regulated in Spain by law, with a network of agents, distributors and / or independent sellers that can create teams, and will always be coordinated under the same business brand.
This type of business model is governed by a Code of Transparent Ethics, recognized by the Law 7/1996 of Retail Commerce (B.O.E. No. 15 of January 17, 1996) and its amendments. Essential for the credibility of the agents, distributors and customers that take part of the network.
Direct Selling IS NOT Piramidal Selling
Two terms that are often confused, since both work with a network of distributors and sales teams. The main difference is that Pyramid Sale is just an excuse to attract people who will pay large amounts of money to enter a network. Its objective is focused on the initial sale and there's where it ends.
LR Health & Beauty is a transparent brand, whose model of Multilevel Direct Selling is very far from this type of models that are not only prohibited in Spain but throughout the world. Our transparency and ethical code ensure strict compliance with the law and good business practices.
What is the difference between direct/multilevel sales and pyramidal sales ?
Direct / Multilevel Sales
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Pyramidal Sales
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System regulated by lawOur model of Direct Selling is regulated in Spain by the Law of Ordinance of Retail Commerce.
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Illegal practice and modelThe Piramidal Sale system is an illegal model in Spain (and in most countries of the world) according to articles 24 of the Law on Unfair Competition and 23 of the Law of Ordinance of Retail Commerce. |
Transparent business modelThey obey strictly with the current legality. It does not hide economical and legal corporate information. |
Opaque companies model
Difficult to identify, and rarely is clearly defined. |
Affordable start-up expenseTo enter the network of distributors a very affordable purchase has to be made, which also includes training manuals and information related to the activity. |
Income with very high paymentsThere are usually very high initial fees, with lots of products and promotional material. The pyramid sales business focuses exclusively on these sales. |
High quality products
The basis of the Direct Selling model is in the quality of the products and the investment in research and development of their own products. Quality product = Satisfied customers. |
Misleading and dubious quality productsThis model focuses on recruitment exclusively. The product becomes a secondary element as an excuse in order to close the first purchase. |
Guaranteed ReturnsThe law states that if you are not satisfied with the product the customer can return it. |
No product return guarantee.
The return of the product is not guaranteed because it is an illegal base model. |
Business Growth OpportunityThis model offers continuous training and support with promotional and training material. With the backing of a consolidated brand and products of guaranteed quality, and high chances of success in the medium and long term. |
Fraudulent business modelThey offer to earn money exclusively with quickly recruitment. Members of the base of the pyramid have few opportunities to reach the top. Unsustainable in the long term. |
Income from the sale of productsThe success lies mainly in the sale of quality products. |
Revenue only for recruiting peopleSuccess comes exclusively from recruitment. The product is secondary and does not generate profit margins. |
Balance sale/storageCompanies that obey with this model recommend ordering as the sales are made, in order to avoid stocking. |
Accumulation of productsEntering the system involves paying a very high initial fee, with an unnecessary amount of low quality product with little or no market exit. |
Development
Globally, around 70 million people are actively involved in direct sales and generate sales of over 100 billion US$ per year.
