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The Good and the Bad of Multilevels. Are They for You?

A multilevel consists of selling different products (often from transnational companies), and for each one of the sales, receiving a commission.

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This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process. Opinions expressed by Entrepreneur contributors are their own.

When you enter the business world and your main dream is to be an entrepreneur , you may come across different barriers. Create a new model, hope it works, start up capital, etc.

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As an alternative, one of the most common modalities is multi-level business or catalog sales, direct or networking .

As a result of the pandemic , several people have approached me asking about multilevels, as they are considering them as an option to generate extra income or as a part-time job.

A multilevel consists of selling different products (often from transnational companies) and for each one of the sales, receiving a commission. In addition to generating income from new people that you help to enter the network.

Sounds good right?

But, just as there are pros to this modality, which is perfectly legal when it comes to a direct sales model backed by a recognized brand and not a pyramid scheme, there are also cons and I'm going to talk to you about each one.

The good

  1. To enter, some companies do not ask you for a lot of capital, or only buy the catalogs.
  2. Anyone can enter this modality (without limit of age, schooling, etc.)
  3. In some companies they offer valuable training to their salespeople.
  4. The more you sell, the more you earn.
  5. You are your own boss, you can sell to whoever you want and at your own pace.
  6. In some companies they reward you for reaching a certain sales range.
  7. You can exit this mode whenever you want.
  8. If you already have a job, it can be your second income.

The bad

  1. There is no fixed salary. If you don't sell, you don't lose money, you just don't make money unless you have developed a network that generates constant flows.
  2. You can get in trouble for people who don't pay you on time, or just don't pay you.
  3. There will be many times that you meet people who do not want to buy from you and you have to be looking for new customers.
  4. Many of your prospects will think that it is the same as a pyramid.
  5. The quality of the products does not depend on you, so if there are any complaints, your reputation as a seller will go down.
  6. You require a lot of perseverance, perseverance and patience, the results are not immediate.
  7. They will never be your own products, so you will not be able to advertise as if they were yours or modify them. You will have some limitations when it comes to marketing.

One of my recommendations is that before entering this business model, you investigate the company's reputation.

Not all multilevels are from transnational companies and as in everything, you can find frauds or poor quality products.

I can list a lot of good and bad points for you, but you are the only person who will make this business model work for you.

If you have an entrepreneurial attitude, you are constant and you always persist, any business model will be for you.

Do not stop looking to train yourself on how to improve in what you do and sell more, it is the only way that you will be able to excel in this business model.

And above all, fall in love with what you sell, if you don't like the products, how are you going to sell them?