In the last 10 years in Russia, network marketing has been rampant with activity. Probably everyone who lives in large cities at least once encountered MLM companies. The most famous and largest of them in the Russian market are AVON and Amway. But there are many other smaller ones as well. Let's take a closer look at what network marketing is.
Network marketing is a strategy for selling goods by building a developed independent distribution network of sales agents who, in addition to selling goods, can attract new partners and give them similar rights. In network marketing, income always comes not only from personal sales of goods, but also from sales made by your referrals (sales agents attracted by you). Network marketing is often referred to as multilevel marketing or MLM (multilevel marketing, MLM).
From the side of network marketing it looks like this - you are looking for customers by all possible ways: through friends, on the Internet, in shopping malls generally use the method of active sales. Your task is to find someone who will buy your product. Moreover, it is desirable that a person “hooked” on this product and bought it constantly, and even better, that he himself began to sell it. The more goods you sell with your referrals, the more you earn. Many people believe that you can work actively for several years, create your own dealer network, and then enjoy passive income. But in fact, reaching a stable passive income is extremely difficult, and the work in network marketing itself implies that you need to always actively offer your product.
What product is sold through the network marketing system?
With the help of network marketing, they usually sell general consumer goods that can be offered to everyone. Through network marketing they sell: cosmetics, food, various bio supplements and vitamins, household chemicals. In general, these products do not differ much from what is in conventional stores. Sales are achieved due to the fact that sellers are result-oriented and well-versed. In addition, some of the goods are bought by the participants themselves and their friends and relatives.
Pros and cons of network marketing for the seller.
What are the benefits of network marketing for the seller himself? And is it worth doing it? When you are approached to work for network companies, you are promised many benefits, but you should not take everything at face value.
Perhaps the main advantage of network marketing is that network marketing is a certain school of life, you will learn to look at things differently, you will have a business approach. You will not only learn how to sell a product, but also acquire the skills to communicate with absolutely different people. You will be much more relaxed in communication, you will not be at all afraid to approach a person on the street and start selling something to him. In general, these skills will be useful to any person who develops himself and wants to achieve something in life. I advise everyone who wants to start their own business to work in network marketing.
You will learn how to manage your own time. You are given freedom, which everyone uses in their own way. Not everyone is able to plan their day in such a way as to achieve maximum sales and have time to relax. You will not have a boss, an alarm clock and a clear schedule. This freedom is naturally not suitable for everyone, if you understand that you do not have the proper responsibility, then you probably should not go into network marketing.
Network Marketing is an opportunity to have additional income. If your job allows, then you can do network marketing in your free time. This will be a good addition to your salary. Most people do just that. Also, network marketing is great for students.
The disadvantages of network marketing include not the stability of earnings. You will not have a salary, sick leave, vacation pay and all the other delights of working on a labor basis. In addition, frequent payments in MLM companies are made informally, without paying tax.
Which companies are engaged in network marketing in Russia.
As mentioned above, there are a lot of companies in Russia that are engaged in network marketing. In total, according to official data, there are more than 500 such companies. Here are the most famous of them:
- Amway (Amway, Amway) - 450 items of high-quality Amway products for proper nutrition, beauty and household.
- Herbalife International RS (Herbalife) - Products for a balanced diet, wellness and personal care.
- Mary Kay - Cosmetics, perfumes, skin care products.
- Nikken (Nikken) - A wide range of products for healthy lifestyle life: system healthy sleep, water filtration and optimization system, air purification and ionization system, magnetic technologies.
- Oriflame Cosmetics (Oriflame) - Natural Swedish cosmetics. Ingredients and inspiration from nature. Face and body skin care products, perfumes, decorative cosmetics, accessories. Formulas of cosmetics are developed using the latest achievements in the field of cosmetology.
- Taperware (Tupperware) - High quality plastic utensils.
- Avon Beauty Products Company (Avon) — Perfumes, cosmetics, accessories, bijouterie.
- AquaSource - High quality natural nutritional supplements and 100% natural remedies skin care without chemical preservatives.
- Siel perfume (Siel) - Perfumes, cosmeceutical products and decorative cosmetics.
- Holding INFINUM (Infinum) - Cosmeceutical and cosmetic products, perfumes, dietary supplements, insurance and financial services.
- Nu Skin Enterprises (Nu Skin) - Cosmetics and dietary supplements.
- Faberlic — Cosmetics, decorative cosmetics, perfumes, bioadditives.
All these companies have enough rich history and extensive experience in online business. The product that they sell is quite popular and is in constant demand. If you decide to try yourself in network marketing, it is better to start working with companies from this list. I must say right away that this does not mean that other companies are worse than that. It's just that these are more personally known to the author of the article.
Where does the "bad reputation" of network marketing come from.
Many residents of our homeland consider network companies to be scammers and are not inclined to trust their business. First of all, this is due to the fact that network marketing began to develop actively after the 90s. When a lot of scammers with financial pyramids passed through the country. For many years on TV they show how the population is robbed, those who offer to earn extra money from the beginning by buying something or attracting friends. Indeed, the channels for disseminating information about financial pyramids and network marketing are very similar, but there are also distinctive features. First of all, a financial pyramid cannot exist in the long term (maximum 3-5 years, usually less than a year), network companies have been successfully existing for decades.
How to distinguish network marketing from a financial pyramid?
Recently, the creators of financial pyramids are increasingly trying to disguise themselves as network marketing activities. Unfortunately, Russian legislation and the executive branch stop the activities of such companies, as a rule, when there are already hundreds, and sometimes thousands of deceived people. How to distinguish network marketing from a financial pyramid:
- Product. Look at what product the company is selling, be especially wary of companies that sell intangible products. The product must be useful to the client, it must have all the relevant certificates.
- Product price. The price of the goods should not be overstated several times. For example, if you are offered to sell a certain program, there are many free analogues in terms of functionality and properties. And in order for you to start selling it, you yourself must buy it from the beginning for 15 tr. Here on the face is a clear sign of a financial pyramid.
- Is it possible to sell your product over and over again to the same customer. All MLM companies rely on long-term cooperation with the client, and not on a one-time sale of dubious goods.
- If initially your goal is not to sell the product, but to look for new referrals and you can receive profit only from their involvement. In financial pyramids, as a rule, they don’t devote much time to the product at all, they tell more about how and where to look for new referrals and about your future profit from them.
- company lifespan. If a company exists in the market of your country for more than 5 years, then most likely it is not a financial pyramid.
- White ZP. In a pyramid scheme, they will never offer to whitewash your income. Moreover, often the organization itself is not registered in any way or is registered under the guise of other activities. Though this is rare these days.
Network marketing or MLM business has existed for a long time, but they don’t talk about it in schools and universities, so this topic is still covered with a veil of myths and stereotypes. I wrote this article for those who themselves have encountered network marketing and are considering it as an option to earn money, become an entrepreneur and reach passive income. I will try to reveal the truth so that you are not hostages of myths and stereotypes, and I will share my vision of how to make the most in this business. If you think that I'm wrong about something, write about it in the comments.
MLM business what is it decryption
For those who are not in the know: MLM is MultiLevel Marketing, which translates as multi-level marketing. This is a distribution scheme in which a company recruits distributors who have the right to recruit new distributors for a fee.
1. Divorce for suckers, pyramid scheme
Network marketing or MLM business - what is it really?
4.1 (81.67%) 24 votesHello, dear readers of the financial online magazine "RichPro.ru"! The topic of today's material is network marketing (MLM): what is it, which MLM companies in Russia have a high rating, how does the network business work, and so on.
After all, for many centuries the model of distribution of goods and services " manufacturer – large wholesale. – small wholesale. – retail – buyer' was the only possible one.
Butin30s years XX century in the United States, a product distribution system was born and subsequently developed " manufacturer – distributor — buyer».
At the same time, the activities of MLM companies have been covered with various rumors, comparisons with financial pyramids and ambiguous public opinion for many years. Based on this, for an objective look at this type of business, you should consider in more detail all aspects and nuances of network mlm marketing.
So, from this article you will learn:
- What is MLM - the history of the network business industry;
- The main advantages and disadvantages of network marketing;
- What network companies of MLM business are the most popular (ranking by sales volume in the world).
After reading this article, you will determine for yourself whether it is worth doing network multilevel marketing, find out which companies are better to choose and why, read the reviews of "experienced" mlm marketers.
What is network marketing and how it works, what is the basis of the scheme of cooperation with MLM business, which MLM companies have high ratings and much more, read below in the article
Network marketing is a system for the sale of goods and services from the manufacturer to the buyer, which is carried out through recommendations from person to person.
The core of the MLM business is in non-store retail, in which the distributor independently establishes contact, advertises and sells the product to a potential buyer.
In addition to earning from retail sales, a sales agent offers consumers, for a percentage of sales established by the company, find new buyers , which, under similar conditions, "attract" regular customers. The result is a multilayer network.
Network Marketing Tasks
- Product pricing optimization. Before 70% the retail price of everyday goods is the cost of the distribution network and advertising. Changing the distribution structure allows you to reduce costs.
- Providing the customer with quality, genuine products. With traditional product promotion, there are obvious prerequisites for the emergence of fakes on the market, and they are absent in the direct sales method: the product is not as widely known as its analogues from the traditional market, the manufacturer, distributor and buyer are not interested in the appearance of counterfeit products.
- Improvement of the product delivery system. The manufacturer's control over the logistics and storage of goods allows us to provide the consumer with a product of the proper quality and in optimal timing(Read the link in the article).
- Improving the distribution of profits of the manufacturing company. Reducing costs allows you to direct financial resources to incentive programs for sales agents, various bonuses and incentives, as well as improve product quality.
Let's take a look at how network marketing works.
2. How network business (marketing) works - the principle of operation of MLM companies 🗺
Multi-level marketing is an interaction between a manufacturer, an entrepreneur and a buyer.
How multilevel network marketing works - 3 sides of profitable cooperation with MLM
2.1. Network marketing by MLM company
An MLM company manufactures products in its own factories. She also develops a marketing and sales plan, based on which the proceeds from the sale of products are distributed.
As a rule, a business plan motivates distributors in several ways:
- a) consume the products themselves;
- b) sell goods to customers;
- c) create a network of entrepreneurs.
Manufacturers organize the delivery of products to their own warehouses in different countries and cities, as well as ensure that distributors receive goods at home.
For proper efficiency, entrepreneurs receive all the necessary materials for products, master classes, seminars are held aimed at developing various skills.
2.2. Consumer Network Marketing
The hallmark of the direct selling method is the creation of comfortable conditions for the buyer:
- Delivery. Entrepreneurs, as a rule, bring goods to their homes.
- Service. Before buying, the buyer receives all the necessary information about the product. Also during the operation it is possible to consult with the distributor.
- Quality Assurance. Most MLM companies guarantee the quality of the products, with the possibility of a full refund if the client is not satisfied.
2.3. Network Marketing by the Entrepreneur
Multilevel Marketing - a very attractive activity for people who do not have a lot of initial capital and business experience.
The entrepreneur has the opportunity to independently plan his employment based on his capabilities. Most employment in this type of business is observed among students, housewives and pensioners.
Some terms and definitions used in the network marketing business:
Distributor - a sales agent who has an agreement with a direct selling company and receives a commission for the sale of products, as well as a percentage of commissions for the turnover of the network created by this entrepreneur.
Sponsor (partner) of the 1st level - a sales agent who introduced the consumer to the possibilities of this business and helped to conclude an agreement with a network marketing company.
Sponsorship (affiliate) line - a list of entrepreneurs directly interested in the success of the distributor, which includes a 1st level partner, his sponsor, etc.
Side businessmen – a set of distributors that are not part of either the sales agent's subnet or the sponsor's line.
Bottom line partners – a list of agents included in the distributor's network.
Organization Width - a set of partners of the 1st bottom line.
Depth of organization — all agents of the 2nd and subsequent bottom lines in the distributor's subnet.
Active income - monetary compensation for the work performed by a person. Income depends only on the quantity and quality of labor invested.
Passive income- profit received by a businessman constantly, for one-time work performed. For this income prerequisite is the presence of assets, which can be real estate, bank deposits, stocks, etc.
8. Advantages and disadvantages of network marketing - an overview of the main pros and cons of MLM business 📃
MLM - business has a number of advantages and disadvantages. The assessment of this type of activity in the media, among reputable businessmen, and politicians varies greatly.
Advantages of MLM - business and its advantages
Let's consider the main ones:
- Low entry barrier to the market. When opening any business, an entrepreneur evaluates the resources that he needs to start in the market. In a direct selling business, little money is needed to start a business. Also, there are no costs for renting premises, warehouses and other fixed costs.
- Possibility of doing business on the Internet. Since the end of the 20th century, more and more consumers, manufacturers, and businessmen have been making purchase and sale transactions on the World Wide Web. Doing business online is an indisputable advantage of business.
- Product quality. Due to the peculiarities of MLM marketing plans, companies are able to allocate large sums for the manufacture of quality products compared to competitors who use traditional marketing to promote their goods.
- Tutorials. To develop the skills of sales agents, direct sales companies are implementing training programs that include books, CDs, seminars and a variety of trainings and presentations. This information allows you to develop not only in sales, but also contributes to personal growth, improvement family relations etc.
- Part-time employment. Opportunity to work in your free time and at the same time have an income from your main activity.
- affiliate program. Sponsorship (partnership) line is interested in the success of the distributor. More experienced partners support, help and advise newcomers in every possible way. Relationships are built on equal terms, regardless of income.
As you can see, there are significant advantages for which you should start this business. We also suggest reading the article - "", perhaps you will find useful information there for yourself.
Disadvantages and cons of network marketing
Consider now the main disadvantages:
- Reputation. Due to the lack of restrictions and selection of agents, sometimes new entrepreneurs conduct business incompetently: they impose products and the business itself, give false information and thereby compromise this type of activity in every possible way.
- High likelihood of worsening relationships with friends and loved ones. Most of the population prefers employment. In the case of doing business without an office, warehouse and employees, friends and relatives have a negative attitude towards this business.
- Slow or no business growth. As a rule, the entrepreneur receives the first significant results in the period from six months to two years, subject to systematic work and training. A very large number of distributors have not been successful in this business.
- The vast majority of proposals for cooperation are rejected. Active participation in business building 80 — 95% of the work does not bring results.
- Only a few entrepreneurs achieve significant success. On the way to success, a sales agent encounters a lot of difficulties, overcoming which requires perseverance, education and work on oneself. Not everyone is ready to overcome all possible obstacles.
Above, we presented the main disadvantages and disadvantages of conducting cooperation with MLM companies.
9. Rating of network companies in Russia - a list of the most popular MLM companies 📑
The first mentions of network marketing in Russia are dated 90s of the XX century and associated with the company Herbalife". The company's products quickly spread throughout the country. Tempted by new business opportunities, thousands of people have decided to cooperate with this organization. Expecting quick success many distributors endured collapse , attributing to the fact that the activity of this company is illegal .
At the same time, many financial pyramids appeared in our country that have an external resemblance to MLM companies. All this affected the reputation of this type of activity.
Despite these factors, the direct selling business in Russia developed significantly in the following decades.
By the beginning of the new millennium, all global leaders in network marketing are present on the Russian market.
In this table, you can consider the most popular network companies in Russia.
| No. p / p | Company name | Brand country | Products | Share of MLM market in Russia (%) | Sales volume in the world, billion $ |
| 1. | Amway | USA | A wide range of products: household goods, cosmetics, vitamins, dishes, water filters. | 8,1 | 9,5 |
| 2. | Avon | USA | Inexpensive cosmetics for the middle class | 28,8 | 6,16 |
| 3. | Oriflame | Sweden | A wide range of products: from cosmetics to diet food | 27,4 | 1,35 |
| 4. | Mary Kay | USA | Cosmetics | 4,9 | 3,7 |
| 5. | Faberlic | Russia | Oxygen cosmetics from natural ingredients | 4,8 | no data |
| 6. | Herbalife | USA | A variety of products for a balanced diet, weight management and beauty care | 3,0 | 4,47 |
The table shows that the world leader in this industry, the company " Amway» in Russia ranks only third in terms of sales.
Corporations have the largest market share. Avon" and " Oriflame».
Is it possible to make money in MLM, what is needed to make money in network marketing
10. Is it easy to make money in network marketing, and what is needed for this 💰
Due to its merits, network marketing is a fairly popular activity.
According to the Direct Selling Association of Russia, following the results of the last five years 6% population was employed in business based on multi-level marketing.
Distributors have significantly different earnings, which do not depend on the level of education, profession, number of children, marital status and other factors.
A small percentage of sales agents quickly and easily achieve results. This is due to the fact that knowledge and experience are necessary for success.
To achieve significant results in business, you should follow the following tips:
A dream is the main factor that allows an entrepreneur to overcome difficulties and achieve success. To maintain motivation, you should “break the path to your dream” into intermediate goals.
The sales agent must realize that the result of his activity depends only on his efforts and dedication to the cause.
Tip 3. Learn and develop
Most network marketing companies have training programs. They include business literature, CDs of business leaders' speeches, and training seminars are periodically organized.
For effective activity, you should write a list of acquaintances in a notebook and periodically replenish it.
Tip 5 Present business and product
Based on the list, you should "get in touch" with potential partners or customers. The number of presentations affects the final result.
Tip 6 Consult with the sponsor line
Better to learn from other people's mistakes. Top line partners have more experience and are always ready to help the distributor, as they have a personal interest in the success of the entrepreneur.
Tip 7. Build a business based on the developed strategy
A stable, long-term result can only be achieved if there is a balanced development of the "width" and "depth" of the structure.
Tip 8 Repeat actions and methods of achieving success used by higher partners.
It is also worth noting that the downline partners are also watching the distributor, and will repeat his actions.
11. FAQ - answers to frequently asked questions
Before engaging in multi-level marketing, potential distributors have a number of doubts and questions.
Question number 1. Should a newbie start?
Worth it, but don't expect quick success. No risk of "being in the red", small initial investment, high-quality educational programs, partner assistance - factors that can affect success.
Question number 2. How to make your first money in network marketing?
When starting cooperation with a "network" company, sales agents strive as quickly as possible. Activities should start with simple retail sales.
Buying goods at a wholesale price, and selling at a retail price - distributor makes money . First of all, products should be offered friends, relatives and acquaintances, as they will be more loyal to an inexperienced seller, and in the future they will be able to become regular customers or business partners.
Question number 3. Network Marketing: Is It Legal?
The direct selling business is a legitimate activity, which confirms the existence and development of these companies for decades.
Many illegal structures disguise their activities under the guise of network marketing companies.
Important! The potential client is invited to deposit an initial fee, pay for the mandatory training and purchase the minimum lot of goods. This is accompanied by the absence of checks and invoices confirming the purchase of products or the provision of services.
Also, the consumer should alert the poor quality of the goods or its absence.
Network companies offer products good quality and do not require significant financial investments to open their business.
Question number 4. What are the reviews of network marketing - is it possible to really make money on it?
There are many different opinions about network marketing on the Internet.
Here is some of them:
Review 1."At the beginning 2000s a colleague at work offered to try the company's products " Oriflame". I really liked the product, and I became a regular customer. A couple of months later, she invited me to become her business partners and told me how to make money.
At the first stage, I managed to have a fairly large income, but then everything changed. I am raising two children alone, and as my network grew (at that time I had 34 people in the team), it was increasingly difficult for me to combine household chores and business.
As a result, incomes began to decrease, and at some point 12 people “left” my network. Later, I decided to switch to the classic business. In order to have big success in this direction, a lot is needed ambition, determination and activity. One girl from my structure has achieved great success in " Oriflame". I do not regret anything, the knowledge and experience gained at that time allow me to successfully do my job now.
Olga, Samara»
Review 2.“In our sophomore year at university, our stream was 'covered by the virus' of network marketing. Earning opportunities from Faberlic fellow students discussed everywhere. I have never been a fan of sales, but still decided to try.
Over time, I realized that it is hard to make money in this business, the bulk of the income from your turnover is received by superior partners. To be successful, you need to be able to impose products.
I don't recommend network marketing to anyone.
Alina, Rostov»
Review 3." AT 2009 I had to close own business, and in the end I owed the banks $40,000, of which 2 000 I had to pay every month. I urgently needed to get out of this situation. I was looking for a solution various options earnings.
Suddenly, I was approached by an old friend, whom I had not seen for many years, with an offer to go into business in cooperation with the company " Amway". At the presentation, he told me about the possibility of a decent income in a year or two. But I was as quickly as possible, which was suggested to focus on personal sales of expensive products, which have a significant margin. So I started in the business selling water filters and dish sets.
I have enough wealthy acquaintances and, in order to get out of my situation, I had to actively promote products. In my first year in network marketing, I spent weekdays 2-3 meetings with clients, and on weekends - 6-7. The result was not long in coming - I paid off my debts and, without actively "attracting" partners, reached 9 – 12 % achievement levels.
Then I studied the company's marketing plan in more detail and began to develop my own network of distributors more actively. At the moment I'm at the level Platinum Independent Business Owner.
I agree that making money in this business is not easy, but if you have the motivation, then anything is possible.
Andrew, Peter»
Question number 5. How to distinguish network marketing (MLM business) from a financial pyramid?
Most conduct their illegal activities under the guise of direct selling companies.
The table shows comparative characteristics these organizations.
| Comparison criteria | Network marketing | Financial pyramid |
| 1. Initial investment | Typically a small initial investment. The distributor for this money receives "tools" for activities: catalogs, information about the company, product and a detailed presentation of the business plan. For many companies, with a certain amount of initial purchases, these materials are provided is free . | Significant upfront investment from 100 to 6,000 dollars. From this money, "bonuses" are paid to the higher "agents" of the pyramid. |
| 2.Product | All activities are based on the sale of products. Product High Quality and is in high demand in the market. | The product is missing or of little value to consumers. |
| 3.Priorities in the activities of the organization | Receiving profit from the sale of products and its fair distribution between distributors and the manufacturing company. | Attracting new participants and distributing the profits from their contributions between the higher "distributors" and the organizers of the pyramid. Emphasis in activities on quick earnings. |
| 4. Paperwork | Making money deposit in a legal way: purchase support by checks, waybills. Drawing up an agreement between the company and the sales agent. | Lack of documents or their improper execution. |
| 5.Distributor motivation | The business plan is based on the promotion of the manufacturer's products on the market and the corresponding remuneration of sales agents. | The plan involves only attracting new "agents". |
Question number 6. How to choose an MLM company to start?
For newcomers who consider the direct selling business as a suitable activity, there is a question of choosing an organization for cooperation.
For an optimal solution, a number of aspects should be taken into account:
- Reputation and age of the company. It is better to opt for an organization with a good reputation and significant experience in this field.
- Products. The basis of any trade is a product. Its quality will directly affect the result. It is also worth paying attention to the features of the product. It is important that it ends after some time, and customers turn to sales agent again. The diversity of the assortment is also an essential factor when choosing a company.
- Tutorial. The education system has a significant impact on business success.
- The presence of the company's business on the Internet. Being offline greatly reduces the opportunity for business growth.
- Business plan. It is important to evaluate the company's marketing and sales plan in terms of the fair distribution of the profits of the organization. You should also check for restrictions. The best kind of business plan is " multistage plan with branch».
Question number 7. I want to try my hand at network marketing at Oriflame, Faberlic, Amway - what do I need for this?
In order to become a distributor of direct selling companies, it is necessary to draw up a cooperation agreement with this organization, the age of the applicant must be at least 18 years old.
To register the contract, it is necessary that the newcomer has a sponsor who will help draw up the documents.
12. Conclusion + related video 🎥
In recent decades, various methods of promoting products have been rapidly developing in Russia, one of which is network marketing. Despite the controversial reputation, this way trade became convenient and popular among buyers.
Having a thorough knowledge of what is direct selling business , the consumer can accept optimal solution about its use - to access quality goods that are not available in retail stores, receive additional income or develop your own network business with the prospect of significant income.
In conclusion, we also offer you to watch an interesting video about business on the Internet:
Multilevel network marketing or MLM (multilevel marketing) is a popular type of business that almost everyone has heard of.
However, the knowledge of many is limited to only theoretical concepts. Someone thinks that the network business is just a scam, and someone thinks that building a network structure is the only way to succeed in life and become financially independent.
Some, not wanting to delve into the study of this topic, perceive network marketing as nothing more than an opportunity to buy a good quality product if necessary. However, with the right approach, this type of business can become a source of income. Let's see what the essence of network marketing is and how to make money from it.
Network Marketing - General Information
In simple words, the definition of "network marketing" sounds like this - building an extensive distribution network and effective product promotion. Translated from of English language The abbreviation MLM stands for multi-level marketing.
Multilevel network marketing involves special form product sales. Sales are handled by distributors who sell the product and expand the network. The total income is determined by:
- own sales;
- the activity of attracted partners, the number of their sales.
It is important! Many do not see the difference between a multi-level business and a financial pyramid, however, there are several fundamental differences between them. First of all, the MLM business is a legitimate activity, which, with the proper construction of the network structure and close cooperation with a large, famous company guaranteed to make a profit.
Historical digression
The network principle of business development first appeared in the mid-30s of the 20th century. It was then that Carl Rehnborg, the owner of a nutritional supplement company, decided to entrust the distribution of products not to sellers, but to ordinary consumers of the product. After the introduction of this form of cooperation, the company's turnover increased to 7 million dollars.
In the middle of the 20th century, two employees of Carl Rehnborg decided to independently build a network business and organized the world-famous American Way Corporation (AMWAY).
Interesting fact! In the US, absolutely everything is sold through the MLM principle. There are about 4 thousand large network companies in the world, their total turnover is more than 300 billion dollars.
According to experts, the traditional form of selling products will disappear in the near future, and network marketing will replace it. However, on the territory of Russia and the post-Soviet republics, the situation is far from predicted. Of course, there are network companies, but they are clearly not yet able to supplant traditional forms of sales.
Principles of multi-level marketing
The principle of operation of the MLM company in some aspects is similar to the activity of the pyramid - income depends on the activity and level of sales of distributors.
A certain percentage is calculated from the income of each distributor in favor of the person who brought this particular distributor to the network. That is why those who are at the top of a kind of pyramid and have an extensive distribution network are more likely to become successful. The main motivation of distributors is financial incentive, which depends on the level of sales.
The main difference between the network business is cosmopolitanism, it has no geographical boundaries, however, doing business is subject to the laws of the country where the representative office of the MLM company is opened.
Principles of activity of network marketing companies in Russia
Such companies are prohibited from:
- announce wages, because the client does not conclude labor contract;
- attract persons under the age of 18;
- sell products without quality certificates, licenses, hazardous to health and the environment.
To become a distributor, you must complete the following steps:
- agree to the cooperation of a representative of the company or visit the office of the company;
- complete and sign the contract;
- receive training, usually several lessons from a consultant;
- purchase catalogs and product samples;
- start selling the product.
Important! Starting an activity in an MLM company, be prepared that you become a freelancer without social guarantees. In addition, working in such a company does not entitle you to a pension. The main reason why people are afraid of cooperation with a network company is the high probability that the representative office will be closed and the person will be left without work.
Types of MLM Marketing
Experts distinguish the following types of MLM marketing:
- stepped - the most popular;
- matrix - only 10% of MLM companies choose this form;
- linear;
- binary - suitable for beginners;
- mixed or flexible.
stepped
A popular type of marketing involves attracting distributors to expand the network in all directions. Payment depends on the number of sales within the branch. The consultant may separate with the group, provided that a certain level is reached.
matrix
The main difference is a clear limit on the number of participants in each matrix. The most common matrices are:
Where the first digit means the number of participants in the first line, and the second - repetitions of the first generation. As soon as one matrix is filled, the next one opens.
Linear
With this form of business, distributors are equal, there are uniform prices for goods. With a linear form, only depth restrictions are provided. The lines created by the distributor are paid, incomes increase gradually.
Binary
This marketing scheme is the most convenient for beginners, it provides two branches on one line. The distributor can invite two people. Income is distributed by agreement - equally, 60% to 40% or 65% to 35%.
Mixed
It involves a combination of several types of MLM marketing.
Interesting fact! Women are more interested and enthusiastic about online sales than men. There are four women per male distributor.
Advantages and disadvantages
Among the advantages, experts highlight the following:
- There is always an opportunity to improve the level of education.
Serious network companies hold training seminars and meetings with mentors for their employees. Unfortunately, training is organized, as a rule, at the expense of employees.
- Free schedule.
You are not bound by a clear work schedule that is set for office workers. A person allocates time for work according to own will. The main thing is to be prepared for the fact that not every day will be financially successful.
- There is no income limit.
With talent, a competent approach and creativity, earnings will increase.
- Financial independence.
Working in a network company is, in fact, your own business, it can be expanded. It is important to understand that the better the products will be, the easier and faster you will create your own network and achieve financial independence.
- Close-knit team.
It is always very easy to work in network companies, there is no intrigue, newcomers are always helped and supported.
- Fascinating work.
You will communicate with a huge number of people, you will forget about the tedious sitting in the office.
However, online business also has its downsides:
- Unstable earnings.
Network marketing does not guarantee constant high earnings and, moreover, the payment of a constant salary. The larger the network, the more stable the income.
- The need for financial investments.
Any network business requires material investments. You will have to buy catalogs, product samples and even corporate clothing.
- Emotional loads.
As a rule, distributors of products cause irritation and negative emotions. You need to learn to treat this philosophically and choose for yourself effective method getting rid of emotional stress.
The pros and cons, as well as the whole truth about this form of marketing, is written in books that are a must-read for those who plan to professionally engage in this type of business:
- Don Fila "10 lessons on a napkin" - business basics for beginners;
- Yarnell Mark "Your First Year in Network Marketing" - how to build a business from scratch;
- John Maxwell "Leadership" - how to invite people from your own network;
- Tom Schreiter "Turbo-MLM" - the whole truth about the network principle of doing business;
- John Milton "The Greatest Networker in the World" - autobiographical book, simple examples network marketing.
Network Marketing how to make money - 7 successful steps
Experts note that this direction in business is not easy, but promising. To achieve financial independence, it is important to adhere to certain recommendations.
Step #1: Company selection
The right choice of a reliable company is the foundation of your future business and success. You can trust a company if it:
- well established in the market;
- offers a quality, useful product;
- has been on the market for many years;
- offers several forms of earnings - active and passive.
Step #2: Education
If you think that you know everything, you will not succeed in the network business. As a rule, such self-confident people are disappointed in this form of business. Remember, practical attempts to realize yourself will be more successful if they are preceded by theoretical training.
The most common form of training:
- in the company on special courses;
- with a direct supervisor.
Step #3: Work in two directions
Activities should be carried out in two directions:
- active sales;
- attracting new network members.
In the first case, you provide yourself with current earnings, and in the second, you guarantee constant payments in the future.
It is necessary to strive to ensure that the income from passive earnings exceeds the profit from active sales.
Step #4: Website creation and use of social networks
The possibilities of Internet resources are endless. Constant work on your own website and social networks will lead to the fact that potential customers themselves will begin to be interested in the product and earning opportunities.
It is most effective to contact a specialized company that promotes websites and products.
Step #5: Planning
Start every day with planning. Otherwise, soon you will start to rush, get confused, feel chronic fatigue. As a result, important things will be postponed until tomorrow, and this will inevitably lead to a decrease in profits.
Step #6: Development and self-improvement
All companies whose business is built on the network principle regularly hold seminars, trainings and webinars for their employees. Use every opportunity to develop your skills and experience, only in this case your business will flourish and develop. As soon as you stop developing and decide that you know everything, income will stop growing.
Step #7: Be better than others
Important! Be prepared to work hard and hard. Do not expect instant results, the path to success is long and difficult. However, if you show perseverance and leadership qualities, you will certainly achieve your goal.
How to effectively develop your own network
The skeleton and reliable foundation of business are partners. According to statistics, the optimal ratio is:
- clients – 95%;
- partners - 5%.
However, it is necessary to spend up to 95% of the time searching for 5% of distributors. Where to look for business partners? Here are some practical tips.
Before you start building a network, remember one rule - do not invite everyone to the business, but only those who meet certain criteria and are sincerely interested in distributing products.
Familiar
The traditional way of building a network in business. Start by making a list of people you know and then add to it regularly.
During communication with each acquaintance, be sure to ask to recommend 3-4 acquaintances who may be interested in products. Do not be discouraged if most of the acquaintances do not agree to your proposal, you always have the opportunity to return to this conversation after a while.
Media announcements
According to statistics, this method has a rather low percentage of efficiency, while the method is quite expensive. Remember that the people who respond to your ad are looking for a specific job and are not interested in growing a business. When compiling ads, honestly indicate all the nuances and features of the work, in this case, people who are really interested in the network business will be interested in the offer.
Street announcements
Quite an effective way to find partners. Efficiency depends on several factors:
- text literacy;
- ability to conduct personal meetings;
- ad locations.
Internet capabilities
Look at the sites where people post their resumes. Select the most interesting options and call them. Tell the truth, don't hide what we are talking network marketing.
Place ads on the Internet on thematic sites, forums, in social networks. The more information on the network, the more people will respond to your offer.
It is important! A distributor who uses the company's products automatically attracts customers and partners. Just talk about the benefits of the product and show the results.
How to distinguish a pyramid scheme from network marketing
Of course, there are many network companies with a good reputation, but firms with a negative reputation have appeared that masqueraded as an MLM firm. Such companies with a negative history used the concept of a pyramid. At first glance, the two principles - the network and the pyramid - are similar. However, in practice there are significant differences.
- The finances of the MLM company are formed from the products sold by distributors, and in the pyramid - from the contributions of each participant.
- To become a member of the pyramid, you must make an initial contribution or buy completely useless goods on a large sum.
- The network company does not recruit people, but trains them. In the pyramid, the situation is completely opposite.
- The organizers of the pyramid are excellent specialists in psychology, in the process of recruiting they play on the basic human feelings - greed, fear, stupidity.
It is impossible to win in a pyramid, it is built on the principle that all losing participants pay for a comfortable life for several founders of the scam.
Features of network marketing on the Internet
Any business can be successfully developed online. Multilevel company in this sense is no exception. The Internet opens up almost limitless opportunities for promoting goods and building your own network.
Features are as follows.
- No geographic boundaries. You can sell goods all over the world, for this it is not necessary to be present at the transaction.
- Sales can be made anytime, anywhere.
- All processes are automated.
- Communication only with the target audience and interested parties.
- Big choice promotion tools.
Leaders in the network market
| № | Manufacturer | Products |
| 1 |  | cosmetics, bijouterie, perfumery |
| 2 |  | health and weight loss products |
| 3 |  | home cleaning products, vitamins, perfumes |
| 4 |  | cosmetics, perfumery |
| 5 |  | kitchen utensils, storage containers, crockery |
Summary
Undoubtedly, the MLM industry is a promising business direction, since such companies easily survive economic crises without reducing profitability. According to statistics, 20% of billionaires started their careers in such a company, and the average profit per person is 4 thousand dollars a month . The statistics are attractive enough, but to come to success, you will need to work hard and communicate with people.
Greetings, dear friends, on the blog about earnings website. Recently I met with my old acquaintance, who is actively involved in the network business, more precisely, he was engaged in and tried to bring me there. Now, like many others, he has already abandoned these hour-long gatherings and constant dashes from one conference to another and has returned to the usual traditional sales business. I then asked him why he did not become such a rich and successful businessman, about which he shouted so restlessly at every step. To which he simply brushed it off and said that he was just unlucky.
As you understand, today I want to put everything on the shelves and tell you what it is network marketing, and why someone is raking in money with a shovel, and someone cannot earn even several thousand rubles, and even with all this, they also lose their hard-earned money.
Modern life dictates its own conditions, and having money in your pocket decides a lot. Each of us wants to live very well and have a solid income, but how not to fall into scammers and not be left in the cold?
What is the essence of network marketing?
So what is a network business or, more precisely, network marketing? This type of business does not mean the active promotion of a product or service of any company through radio and television, and the main emphasis in this business is on attracting people who are ready to do anything for money, as they say, sell their souls to the devil.
MLM (network marketing)- a way to sell a product or service by selling it through independent partners (distributors).
I personally attended and began my development with such network companies as tellme and Intway.com, the second one interested me more, as it was interesting because it was based on making money on the internet, it had its own stock exchange, and a website builder, and everything like that. To date, this company does not exist, as employees of the Ministry of Internal Affairs came to their offices and closed the shop. And you imagine the faces of those people who invested their money and effort there, and in the end, dreaming themselves only of dreams of happy life lost both money and nerves.
Yes, I will not hide the fact that when I started doing this business, my eyes just burned, and I soared with happiness, believing in a bright future and even went over in my head what I would do when I earned my first million in this business. I actively invited people, including all my friends and colleagues, someone walked, and someone sat on the priest evenly and was afraid to try something new. Over time, my ardor, like the activity of many participants, began to fade, and it was like how people washed their eyes after getting the powder there, and many saw the light and began to think where their money was.
What is most interesting is that you will not sign any documents in any such network business, more precisely, you are given a product and sent to sell, thus making you a simple volunteer who will sell and advertise other people's products at his own expense. Isn't it a paradise for companies? Get rich on sales, shoot videos with expensive real estate and cars in the background and tell people that they will soon get rich and even push your product at your own expense, cool!!! And to be honest, let's look at such proposals on the Internet. There are thousands of them, now almost every second person is involved in this, and when you ask them about the money, they will start scratching your ears with their tongues that you need to work even harder and invest more, in short, there is a zombification of the people who want to get everything at once, without making any special efforts and without developing as a person.
Many may say that I'm talking garbage, but, believe me, I myself went through all this, and not only me, many of my acquaintances and friends, and many became former friends, both to me and to each other, since the main essence PR for such network marketing companies is based on attracting people and their friends and relatives, who are paired with so-called business packages, which include an account in some system, and somewhere they just give you a status, and on this all. But before you start doing network marketing, think with a sober head and understand that no one will give you a lot of money for the fact that you just want to earn money and will run around agitating everyone up to the seventh generation, that such big money is waiting for them there, as they, and you, will soon be fucking rich by listening to a couple of seminars. Such NEVER will not.
Let's remember the pyramid known to all of us " MMM", which has already been written hundreds of times and discussed as much. But, as I see it, no one cares about sad stories and losing money. There is such a thing as herd thinking, and if you are part of the same herd of "beggars", then you you need to go there and not even finish reading this article to the end, because you still won’t understand.Recently, the second wave of the MMM pyramid ended, on which they cut down part of the money, dough at the expense of others.By the way, Mavrodi himself said this, thereby revealing the essence all this business that hides behind expensive interiors and jackets with ties.The essence of network marketing, like those very pyramids, is based on people bringing other people and selling them products, business packages or something worse. brains, what I want to ask everyone who comes to seminars and spends hours studying this nonsense, guys, are you out of your mind or what?
I'll tell you on the example of network marketing (or network business), as you like, which he personally attended. The essence is the same everywhere, most likely, one piece of paper is written as a carbon copy, so why get dirty, they still steal it, it reminds me of modern Russian cinema with "asshole" humor. Well, in general, everything is quite simple, as in all such dubious companies, they sell everything they want there, and this always happens in conference rooms, by the way, pay attention if you came to a presentation or, as I call them, "sectarian sermon ", then you are always charged for entry and, thus, you pay for the rent of the premises. It killed me, because it was said that billionaires came from Europe to perform in front of future "beaters" of clients, and they cannot pay the rent themselves, well, this is just tin and even funny. I'm also a billionaire. =))
Many people, having come into network marketing, very sincerely believe that they will bring wads of money on a silver platter, and begin to promote this business themselves. I myself am constantly in PM, both on social networks and on Skype, guys who offer to earn a lot of money on a new "startup" that is about to launch, and whoever has time will become damn rich. I always answer that I am not interested in this nonsense, it’s even a pity to waste time on this nonsense and pseudo millionaires, which, as I see, almost every 10th consider themselves to be.
Here is one of the most popular, so to speak, business coaches in Russia and the CIS, who assures everyone that they will earn awesome money. By the way, look on the Internet, he also promoted Intway and said that it was there that everyone would become rich, according to which they brought, as I already said and you saw in the videos, criminal cases, the company disappeared with all the money of its partners. This speaker's name is Oleg Permyakov, this name is familiar to many who have participated or are involved in network marketing, now he is promoting another business called Expert Rights, where people are also sold car products that reduce fuel consumption. I have one question, what is he now saying to his partners, to whom he promised millions, and why he abruptly changes his mind and runs from one business to another.
If it starts new network marketing some company, then the main representatives are always recruited in the regions ( speakers), who are given some money, and sometimes just out of sheer enthusiasm, so to speak, for food, who, in turn, assemble teams and start campaigning for mere mortals. By the way, I was brought into this so-called business by a man who walked around in a tuxedo, with a badge, as congressmen walk in America and so on, and at the same time drove a rotten "six". And this person convinced me that I would be very rich, I only need to invite people and buy their "business packages".
At all the seminars held by network marketers, you will definitely hear about the book on making money "Rich Dad, Poor Dad" (the book is interesting, charges, there are no questions about it), and they will almost retell it to you and draw success schemes and levels, in which you will be now, in the future and so on.
But if you want to start earning, you will need to buy them business package, it’s different for everyone, maybe just a membership fee, but many build a “cell” structure, so to speak, they also call it a “binary system”, from the word “two”, where after paying for your package you will invite people and build a chain for receiving commissions on their sales. In short, bring people in, sell them a product or service of the company, and if you do not buy the products and packages themselves, then the road to wealth is immediately closed to you. Sometimes I heard such nonsense that I became afraid for the future of our country, where people believe an outsider who speaks a memorized text and promises them to become rich, but he himself cannot even buy a car, even a used one.
This is what happened to this fraudulent company when they became completely impudent: the leaders were even caught in the office of the Moscow office, where they printed certificates for the right of ownership of the land, horror!!!
I have seen such things, and I’m sure you yourself have seen this, when almost a schoolboy teaches you via videoconference, who rubs you in that he is already a successful businessman, and in the background there is an old murdered apartment. Someone will say: "Well, he rental apartment". Well, yes, only this situation is similar for everyone. And these people, who, according to them, have a lot of money, from which the wallet breaks, teach the rest to earn money without having anything in their souls. I know what I'm talking about, because I myself know several such people, in the evening they feel like millionaires, but in the morning they gobble up their bread and go to work for a penny, and even there they will sell that they will soon become very rich.
Will working in network marketing make you rich?
Nothing like that, in any network business you will not be able to earn huge money. Yes, there are people who earn money, but they managed to understand this business and its rules. There are few of them, and they were on initial stage its development, which managed to sell a large number of accounts (business packages) and attract a future zombie audience. I will give an example of a network business as Avon or Amway . Yes, people there earned their money, but they stood at the origins and endured everything that happens, but the point is that everyone will become rich and will drive an expensive car and live in luxury real estate.
I myself, and many who come into network marketing, light up at first and try to believe that they will become rich without much effort. Ask acquaintances for the sake of interest who participated in such a business, how much they earned and how many like them earned, they will either lie (if they are still doing this) or tell the truth.
Total 5-7 % of people earn big money the rest are content with meager earnings. The reason can be both a lack of understanding of the business, and their lack of right time in right place, so to speak, to be at the origins of starting a business. There can't be hundreds of billionaires and millionaires in every network business, otherwise everyone will become rich and the balance will be upset everywhere. Many beginners, having worked for several months and received a penny, immediately leave. There are more stubborn ones who have been thoroughly brainwashed, and they hope for a bright, carefree future in the Canaries, but sooner or later enlightenment comes to them, and they also flee from there.
At each conference, we had speakers who told us what to do and how to do it, and if in a month or another period you do this or that, then you will become almost a regional representative, and so on. Yes, many have received this status. I once went to pour tea in the service room, and there, with her forehead buried in the table, a woman was sleeping, beautifully dressed, in a formal suit, I asked my friends: "Who is this?", I was told that this is a regional manager, works with 6 in the morning until night, conducting such trainings, which barely had time on the subway to fall asleep and start all over again in the morning. I'm not imagining anything, I'm telling it like it is.
I remember one young couple in their 30s. They, I will not say that they were such talkative, simple quiet ones, doing everything that they are recommended. So, a few weeks before the abrupt closure of the company, which presented itself as a Dutch company (and in the end, the leaders were taken under the arms in Moscow), they invested all their money in the business, while selling their car for 450,000 rubles. I don't envy them. I knew many people who ran from one network company to another, and then to some other, although they shouted that it was in that company that they would become the richest, or had already become.
Of course, it’s up to everyone to decide, someone likes everything, and he can’t live without it, but for those who are brought into such a business, I want to advise you to weigh everything and think carefully about all the pros and cons, because every coin has a flip side and you can greatly regret, spending not only money for nothing, but also losing loved ones. Of course, I wish only success to those networkers who earn normal money in their business, and to everyone else, stop dreaming of easy money and riches that are rubbed into you every day. In this article, I expressed my personal opinion, based on experience, and I worked hard, because I also wanted to have a big bank account -))) Only it turned out to be a waste of time and nerves))).
If you have participated in such network marketing and had some experience, then please write your stories and observations in the comments.
Read new article about high-profile scam companies, as well as tell and show list of pyramid schemes 2015 and what happened to them.
I hope the material will be useful to my dear readers and help save your nerves and money. Subscribe to blog updates and be aware of such frauds. After all, as they say, "forewarned is forearmed."
I would be grateful for pressing the buttons and reposting this material. See you in the next articles, subscribe to updates. Good luck everyone, take care of yourself and your loved ones.
Sincerely, .
