Direct sales sector reported revenues of more than $6.2 billion over the past year

Direct selling or multi-level marketing is a form of marketing that companies use to sell their product and bring it to the place where the customer is located. But direct sales is also a retail distribution channel, which bases its business on the personal contact of sellers with the end consumer.

In Colombia, the Superintendency of Companies and the Colombian Association of Direct Sales (Acovedi) are the ones who ensure the rigor and ethics of this sector, because on many occasions, people fall into fraudulent schemes or pyramids, which are sold as a multilevel sale, end up being cheated and losing their money.

After the case of DMG, an entity that massively and illegally collected money from the public in 2008, amounting to more than one billion pesos and affecting nearly 200,000 citizens, Colombia enacted Law 1700 of 2013, aimed at regulating the development and exercise of so-called multilevel marketing activities.

This type of sale has consolidated itself as an income option for the Colombian household and family. In an interview with Infobae Colombia, the executive director of Acovedi, lawyer Elizabeth Acuña Ayala, said that this sector grew by 14.5% between 2020 and 2021. “This, translated into revenue, yields figures greater than 6.2 trillion pesos. This sector brings together the 28 most important companies and multinationals in this industry,” said Acuña, who has more than 15 years of experience in the sector.

To date, this association informally occupies more than two million Colombians, of which 84 per cent are women and 16 per cent men. The 2013 law stipulated that multilevel companies may not include permanence or exclusivity clauses in their contracts persons who wish to resell the products that are linked to Acovedi.

Acuña Ayala also expressed in his interview with this media that direct sales are a concrete, solid and legal option for the country's economic recovery. “We are a guild that believes in Colombia. Today we celebrate the enormous growth we are reporting and this commits us with all the judgment, to continue doing the task of bringing to Colombians an alternative of quality, sustainability and economy.”

But he also recognizes that it is very easy for people to fall into criminal schemes disguised as legality. From her position in which she was recently appointed by the board of directors of the association, of which she was the only woman, Acuña Ayala set herself two goals. The first is to promote education about this type of direct sales and the second is to pursue fraudulent initiatives without consideration.

At this point, it is important to note that the Financial Superintendency of Colombia, through Resolution 0469 of May 18, 2021, ordered eight natural persons to “immediately suspend the promotion and advertising of products or services for carrying out operations specific to the stock market of the foreign company. Omegapro”.

The promotion of Omegapro products had been carried out under a “referral” scheme, something similar to the technique of direct sales. But with the difference that in the latter, you don't have to give money when entering, nor is it monetized when your “referrals” decide to market the products.

The Financial Superintendency established that the promotion carried out by Sebastián Ortiz Pion, Hugo Fernando Hernández Rodríguez, Daniel Leonardo Velásquez, Angie Vanessa Pineda Amaya, Katerine Carlozama Castro, Harol Alfonso Alvarado Galván, José Rolando Rodríguez Loaiza and Esteban Pinto Salazar in the national territory “was aimed at purchase of investment packages to carry out complex transactions with financial assets”.

For his part, the director of DANE, Juan Daniel Oviedo, highlighted the role of Acovedi and assured that this association “contributes positively to solving equity problems in the country. The workforce that directly depends on the affiliated companies, corresponds to 60.8% female staff, and 39.2% to men,” he said.

With her mission of continuing to educate the population about direct sales, the executive director of Acovedi, said that on April 19, the first Latin American Direct Selling Forum will be held, which can be viewed virtually and free of charge, through the association's social networks.

“This is a strategy to seal a regional alliance, where we want to strengthen the sector not only in Colombia, but in all countries. It'll be exciting. It is the first event after the lockdown and we are motivated,” concluded the executive director of Acovedi, Elizabeth Acuña Ayala.

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