The direct sales system (Multi Level Marketing), almost unheard of in Romania until several years ago, will gain solid ground once international companies endorsing this system enter the Romanian market.
Gabor Szocs, 37, general manager of Forever Living Products Romania, has for 7 years headed one of the few businesses in the natural products and cosmetics market relying on a MLM sales system.
“There already are strong signals that the MLM industry will witness strong expansion through the emergence of several competing firms. To stay in the game, you must find the niche you”re the best in,” explains Gabor Szocs.
It is difficult to explain that the MLM system is not a system of salespeople, he says.
Internationally, many companies have embraced the MLM direct sales system, including Zepter International and Amway.
“Gains are primarily based on the volume of business registered in the set-up network, and not on individual sales. Theoretically, a Forever distributor presents a business to interested parties and promotes the company”s products, while distribution or sales do not come first,” Szocs also said.
On the other hand, the company operates as a limited liability firm (SRL), but the monitoring of the distribution system is also necessary.
“This is a strictly necessary activity for the company to operate legally, starting from import procedures and the payment of taxes and obligations to the state budget, going through the management of the seven warehouses countrywide and last but not least, our responsibility for of our 50 employees,” states Szocs. “At the same time, intense management activity is needed to handle the MLM network developed over the last seven years,” he concluded.