Network marketing is a business based on partnerships. Its other name is MLM or multi-level marketing. The difference between network marketing and traditional business is significant.

Let's take a closer look at what MLM is. Its essence lies in the fact that the company organizes the turnover by creating a network of partners who perform the bulk of the work. In this case, the people involved in the promotion of goods are at the same time the company's customers, since they make purchases at wholesale (distributor) cost. They then resell the product at a higher price. The company spends less on advertising, its customers take care of selling products to customers.

Percentage of sales - not the only plus when working in MLM? This is, first of all, the company's own business of distributors. Network marketing is beneficial to partners in that they receive a good reward for their work. Thus, for attracting new people to the company, active distributors are paid additional remuneration for turnover from their entire team. Such income is called passive, because, once having invited a person, having registered and trained him, the partner now receives constant deductions from his work. But often the structure of such a leader grows to tens, hundreds, thousands and tens of thousands of people. Income in this case continues to flow to the founder of the structure. Thus, in a few years, any person can secure a comfortable future.

Many people ask the question: “What is an MLM business?” First of all, this is a huge job of promoting products, recruiting new distributors. But the reward for your efforts cannot be equal to the payment for ordinary work. It is in the field of network marketing that a large percentage now concerns not only European countries or America. A huge number of MLM leaders in Russia.

Consider network marketing - what is it, what terms are used in this business? The marketing plan is the rules according to which all accruals to the company's distributors take place. It indicates everything and the conditions under which they are received.

A check is a monetary document with a payment indicated on it. It also indicates the partner to whom the payment is made and other necessary data.

Auto-concept is a term that has become increasingly used in network companies. Particularly active partners have the opportunity to receive a car upon fulfillment of their turnover plan determined by the structure.

What is MLM for most of the Russian population? Many people think that network marketing is a scam whereby particularly sassy people want to put more money in their pocket. In fact, MLM is an opportunity to have a business for people who cannot open their own company. Any network company is absolutely legal. A negative opinion is formed by the fact that distributors promise new partners "mountains of gold". Yes, the opportunity to make money in an MLM company is huge, but people forget that you need to put in a lot of effort first. Moreover, for the first few months, the newcomer will mainly hear refusals, ridicule and unpleasant statements. But if he crosses this line, gains confidence that he will continue on the right path, the opinions of other people will not be important to him. A person will strive for his goal, because he knows that he will succeed in the company. And in the future, people who are now scoffing will simply envy his victories and perseverance.

So what is MLM? This is an opportunity that anyone can take advantage of. Network marketing leads to financial independence, free disposal of your own time. And whether to choose a business in an MLM company or stay in your previous job is the right of every person.

Hello! Today we will talk about network marketing. We will just talk about it, but this does not mean that we urge to deal with it. This article is just a review of the tool, nothing more.

It is difficult to say what network marketing is in a nutshell. Someone calls this scheme of earning a real “scam”, someone talks about the only opportunity to open your own business without investing tens of thousands in its development. This article will collect the most detailed information, after considering which you will come to certain conclusions and decide for yourself whether it is worth looking for a job in network marketing or is it better to leave this area to others.

What is network marketing and what is its essence

Network marketing- a way to promote a certain product using a network of people who, in turn, receive a percentage of the sale of the product and rewards for attracting new people to the network. A person tells about it to his friends, who, in turn, to their friends, and as a result, a kind of network is obtained, in which it is very easy to distribute the goods.

For each invited person receives a percentage of his profits. Of course, various psychological techniques are used to attract people to network marketing. Not everyone will find this work profitable, so before explaining to a person the essence of the technology for distributing goods, they work with him for a very long time and explain the benefits that he will lose if he does not agree to this work.

Network Marketing - Pyramid

Some compare network marketing to pyramid schemes. Yes, the scheme is a bit similar, but in the case of network marketing, no one forces a person to invest a lot of money and just sit, waiting for a miracle. If you work, constantly increasing the base, you can first go to zero, and then to a plus. Unfortunately, in large networks you will already be too far from the top, so you should not expect sky-high fees and life in the Maldives, but a couple of tens of thousands of salary increases are quite real.

Network marketing system and principles of its functioning

• Any network system must somehow serve the distribution of a product, product, or a particular service that a company or group of people provides;
• If the flow of goods or services stops even for a few days, the money stops flowing and the system collapses;
• There must be many representatives of the lowest level in the system, because otherwise the scheme does not make sense at all.

If you decide to get into network marketing

It all starts with a banal interview, where specially trained managers talk to potential buyers, describing all the prospects in bright colors. There may be an exaggeration (for example, about the highest income in the first couple of months - even if you are super active and all your friends immediately connect to the network, you will not receive a large amount in the first month).

If you have agreed to register, some companies may require you to pay an entry fee to the network business. Of course, they will not provide you with any documents, or they will give you something that has no legal force. True, only young and unscrupulous network companies sin with this - masters that have been on the market for several decades will never do this, reputation is too important for them.

After that, the actual work begins. That is, a constant search for new sellers who can be connected to the network after themselves and make a profit from them. The money is received after the sale of the goods, but some companies additionally set a certain payment day, before which it is impossible to receive the full amount. In the latter case, you should strain yourself - often these are scammers who work for a couple of months, after which they disappear along with the money they earn, leaving behind an empty office and a manager girl in a pre-infarction state.

How to make money with network marketing

In total, there are three ways to make money in a similar company:

• Resale of products. To do this, a certain product is bought at a wholesale price and sold from friends at a market price. The percentage markup varies from 15 to 30%. This method even has a name: margin;
• Receiving bonuses for some actions performed within the framework of work in the company. Usually bonuses are based on the number of sales, although there are certain exceptions. Such earnings are highly dependent on the company in which the person works - some do not offer anything at all for overfulfilling the plan, and someone is very generous with gifts for every important figure;
• Receive funds from interest that drips from workers who were directly invited by you and your friends. The more such people you have under your control, the greater the amount. If you stand at the beginning of a large grid, you may not work at all - but it takes a lot of time and effort to build it, in addition, if some distributors get disappointed and leave, you will have to return again to expand the grid to an acceptable level of earnings for you.

All these methods require one thing from you: you must work. Work hard, constantly disseminate information, look for new customers. Be prepared for misunderstanding, for the fact that you will simply be banned on social networks, for the fact that you will be trolled and sent in personal correspondence - unfortunately, not all network users adequately respond to network marketing on the Internet.

Network marketing on the Internet

If possible, it is possible to sell goods. Or a site to attract people. True, this will require certain resources, and it will take a lot of time to promote it (unless, of course, you are an expert in).

Among other things, in order to succeed in network marketing, the employee is required to have certain character traits. First of all, he must be very persistent, not accept refusals, try to prove his point of view - and, at the same time, be able to retreat if he understands that the situation is taking an unfavorable turn for him. Confidence in this list, perhaps, should be in the first place: if people feel that you know what you are doing and have no doubts, then they will follow you and work in the same company, generating income - well, or just buy some is the quantity of goods.

Are modern people interested in network marketing?

Despite the large number of standard “scams” ​​and a small percentage of truly successful people, everyone who sits on the Internet has thought at least once about this way of earning. Modern leaders in network marketing, such as Oriflame, Avon, Faberlic, Vision, Amway, LR, Tian De and Siberian Health, still get into the top queries, according to a special service that determines which words and in what quantities and combinations users usually google.

Before moving on to the specifics, I would like to consider the main advantages and disadvantages of network marketing.

Advantages of network marketing

• You can make big money if you really try. To achieve the goal, it is enough to create a close-knit team that will gradually help you make a profit.
• Financial independence from the company and other people. In other words, you yourself decide when to sell the goods and receive your own proceeds, the employer does not track this moment at all. Well, a bonus is financial independence from loved ones, for example, from a husband or parents. That's just not to achieve complete financial independence - all the risks associated with force majeure will remain.
• Having your own business. This is not really a business, at least at the very beginning of the development of your particular network. In a year or two it will get better, and you can be called a small businessman. Investments, by the way, will also be required, so all those who tell you about the complete absence of investments are either lying or do not fully understand the principle of operation of such systems.
• Close-knit team. There will not even be any nasty “buts” - in network marketing they pay special attention to this. People there are quite friendly, but not everyone is ready to go beyond communication, limited to work. There were cases when very interesting people turned into workers who were no longer interested in anything but profit. It's not worth bringing this up.

Cons of network marketing

• Earnings are completely unstable. No one guarantees you that the woman over there who bought all the purchased goods from you this month will do the same next month. If you suddenly fell ill, missed a meeting with a client, or simply didn’t like someone, you lost money, and now you won’t get it back. In general, a rather inconvenient scheme that requires constant work and saving in an emergency reserve.
• The moral burden associated with constant communication with customers. Even if you are extremely sociable and friendly, people will not always be happy with you. Not all potential customers with whom you will communicate will behave adequately, and if you are going to meet in person, you can get injured or damaged equipment with the goods.
• Material investments at all stages. They may be insignificant, but this is not so important - the main thing is that you still have to spend money. And it is not a fact that the purchased product will pay off, so at first distributors try to buy what they themselves can later use. A few thousand rubles is a normal price to start a career in network marketing. If at the moment they are not available, we suggest that you familiarize yourself with the information.
• Responsibility for the people you have invited to work under the same scheme. In principle, if a person's moral principles are not the highest, he may not pay attention to this point. So, train a couple of people and forget about them until they leave and his income drops a little.

Myths and fictions about network marketing

This paragraph contains the most common myths about network marketing and a brief description of the facts that debunk them. Read carefully, and if after that you are not disappointed and are ready to start working, proceed to reading the next paragraph.

Myth: The network is the best way to open your business quickly and with virtually no initial capital, having stopped working for your uncle.

Reality: Since you will be at the very end of the network, you will have to work hard. Constantly look for people who are interested, monitor bonus programs and discounts, in general, for the first six months, at least, life will not seem like sugar. Then you will either completely get tired, or you will reach a more or less normal level of earnings. Golden mountains, at the same time, you still will not earn.

Myth: Buyers on the Internet love it when the goods are offered to them by representatives of online retailers, and not official stores.

Reality: Not everyone is comfortable buying such products from online sellers. If you are going to sell such products to your friends and relatives, you risk ruining your relationship with them. No one will like it if someone decides for him that now he needs just such a shower gel, and no other.

Myth: The whole world will soon refuse to trade through ordinary stores and switch to network trading.

Reality: Brad of pure water. Companies of this kind appeared in the United States in the early 1960s, and until now even a percentage of all sales are not sales in networks. Thus, in the near future you don't have to worry about regular trading.

Myth: With the help of network marketing, you will free up a lot of time, you can change your lifestyle and just be happy.

Reality: Never believe motivational posters and commercials, because often they tell lies. In addition, energetic and constantly developing people are unlikely to enjoy sitting at a computer all day and selling a useless product to strangers.

Myth: Trading online allows you to maintain peace of mind.

Reality: There is absolutely no connection. Moreover, if you are a rather irritable person and cannot calmly respond to rudeness and remarks, any call to customers will more likely bring you out of a state of peace of mind.

Myth: You do not even need to look for a permanent network of clients, because you have your friends and acquaintances - they will provide a constant income.

Reality: And now imagine yourself in the place of such a person: he lived a conscious life, choosing the means and things that were convenient for him, and then bam - a seller comes who offers to throw the years of selection into the trash and start buying completely different, untested products.

Myth: You practically do not work, taking up sales for only an hour or two a day.

Reality: No no and one more time no. Selling at the initial stages will require you a mountain of time, which many most likely do not have. At the same time, you still have to look, since combining network marketing with your main job is simply unrealistic - if you want to get at least something.

Myth: Employees who are already online are interested in your successful work and development. Working in network marketing allows you to strengthen the spirit, to understand that you can run your business and not depend on anyone.

Reality: Many people play on this, saying “why work for someone if you can open a business right now”. Remember, business and network marketing are different concepts, and such a scheme is unlikely to have anything to do with personal freedom.

What to do if you are still interested in network marketing

Criteria for choosing a network company

Before you go to an interview and buy a product, it is recommended to look at the following characteristics of a network company:

• The product they offer. It should be safe and moderately affordable so that people can buy it without going broke. Of course, there is a possibility that you will want to sell the same product as very expensive and high-quality, but it will be on your conscience.
• Company age. If it was organized a week ago, then the likelihood that this is another fraud, after which the organizers will disappear into the sunset with your money, is very high. The most reliable are companies operating on the market for at least 5 years. This criterion makes it possible to weed out financial pyramids: a financial pyramid, even the most organized one, will not last five years. Unscrupulous network companies in the first five years squeeze all the juice out of users and also stop working, in the rest you can try to make money (although the competition will be much more serious).
• Marketing plan. It is better to compare it with the plans of other companies that you decide to consider. Compensation payments through the network - the most important thing, you should find out about the conditions for accumulation and payment first of all.
• Training in the basics of distribution work. A very important point: if you are required to pay, then most likely you will not be able to work with them. The same if the imposed courses do not help in any way, but simply take time. Just stop going to them, and if suddenly they refuse to pay you without courses, leave there - no one guarantees that after training you will be paid what you earn.
• Fame matters too. If a company is known in at least three countries, then it is more reliable than a company with the same characteristics, but without representative offices in other countries.
• Legality of the company. If you cannot find a full-fledged representative office (not an office for a day with a bad repair) or an official website, then feel free to break all ties with the company, because there will be nothing good from such cooperation. Be sure to check the site for performance and content content: if it was created a long time ago and is updated periodically, then everything is in order.
• Good team. If you see that these people are really on fire with the idea, and they themselves are actively involved in sales, and not just pretending to interest you, if their pages on social networks look more like real ones than advertising ones, then you may well trust them. Remember: you should not evaluate the team during the first meeting, it is advisable to at least learn a little about them before the interview and take a closer look later.

Independent rating of network marketing companies

Also, when choosing, you can focus on the rating of companies, which was compiled on the basis of sales volume in recent years:

• Amway;
• Avon Products;
• Herbalife Ltd;
• Mary Kay Inc.;
• Vorwerk & Co. KG;
• Natura Cosmetics SA

And now more about each company.

Amway

An international company that offers customers more than five hundred items of goods that allow you to maintain beauty and health at the appropriate level. At the same time, the quality of each unit of goods is strictly controlled, which is a rarity among network companies in principle.

Features of work

• If a person personally buys a large amount of the company's products, he receives an additional reward;
• Products are purchased at wholesale prices from the company, and the distributor must sell them at a markup of 30%. It is these percentages that are the main income of a person at the initial stage of work in a network company;
• Additional earnings begin if a person invites his friends to the team. The more distributors and consumers he leads, the more profitable it becomes for him to purchase goods specifically, and the greater the amount he will receive from one transaction.

This company is a real example of how people can earn money without actually leaving their homes. Of course, you won’t be able to achieve the same in a couple of weeks, but if you advertise yourself properly and find regular customers, you will get a good increase in your main income.

Avon

One of the network marketing companies in Russia, which has been known on the market since the 2000s. Representation in more than a hundred countries around the world, so there will be no problems with reliability, unless, of course, you are contacting a real representative, and not a charlatan hiding behind a well-known brand.

The company is famous for offering not just cosmetics: in the catalogs you can find costume jewelry, perfumes, small nice accessories for women, etc.

Features of work

Cooperation with the company can be carried out on two grounds:

• As a regular customer with VIP status. Registration is free, each such client gets the opportunity to purchase goods with a standard 30% discount. Every time a customer places an order (starting from the first time), he receives gifts from the company;
• as a coordinator. In this case, there is MLM (multi-level marketing): the main task of the coordinator is to attract new representatives to the company. The coordinator also has a fixed 30% discount, but in addition to it, he receives an additional 12% on all sales made by his referred friends. It is worth remembering that for each coordinator there are peculiar incentives and additional discounts. The only thing is that such actions must be constantly monitored.

Herbalife

The company is relatively young, it is not yet forty years old, but it already has representatives in almost a hundred countries around the world. If you want to cleanse your body, improve your health and earn some extra money, then distributorship in this company is the best option. Natural cosmetics are also available.

Features of work

• To get started, you need to purchase a special set. It will not work to collect cosmetics in separate packs, at least for the first time;
• The percentage difference is only 25%, unlike previous companies;
• Above each distributor is a person who receives a commission once a month.

Mary Kay

A company that has been presenting products for skin care and make-up on the market for fifty years. Fame in other countries is not so great, representatives in less than forty countries, but this does not prevent the company from stubbornly holding on to the first places in the tops of network marketing in Russia.

Features of work

• Only women over eighteen can get a job;
• The consultant is obliged to purchase a starter kit, without which he will not be able to make further purchases. Income is made up of money earned from the sale of products and interest that drips for each invited new employee;
• If you plan to use this cosmetics for a long time, you can become a direct client with all the ensuing bonuses. Discounts can reach forty percent, and the company also provides all customers with gifts and a monthly magazine. Those who wish absolutely free of charge take several courses, in particular, training in makeup techniques and the basics of doing business.

Vorwerk

This company, unlike the above, has nothing to do with cosmetics and body care. The catalogs contain appliances, kitchen equipment, etc. There are representative offices in more than 60 countries of the world, and specifically in Russia, such goods can be bought for more than ten years, so the reliability of the company is at the level.

Features of work

• If a person has just started working in a similar direction and does not quite understand what they want from him, the company provides the opportunity to take good free courses, thanks to which even beginners understand the scheme very quickly;
• No one monitors the implementation of the plan, the consultant himself decides when and how much he should work. Of course, only a percentage of sales is paid.

Natura

A Brazilian company that has been successfully selling cosmetics and perfumes for almost fifty years, including in Russia.

Features of work

• Both consultants and advisors receive only a percentage of sales. There is no additional income for attracting new employees;
• The Consultant can receive preliminary free training in the basics;
• The company constantly runs some promotions aimed at encouraging good employees.

Unsuccessful examples of network companies

You must understand that there are different types of network marketing, and not all systems work as they should. This list contains several examples that show that not all areas are suitable for network marketing, and not all organizers can organize the proper level of work.

• Madzherik. Initially, the money was invested in some kind of scientific development, but then the company began to offer very strange projects, which, for obvious reasons, did not pay off. At the moment, the company has not been rehabilitated in any way, the reviews are purely negative, the network has practically collapsed.
• A company that was engaged in fuel additives for cars. The manufacturer itself did not inspire confidence, plus, among men there are less people who are ready to work according to such a system, in general, the idea did not take root at all.
• Internet market Inmarket. The same market, but with the return of a certain commission to the owners. Prices naturally rose, as a result of which the site fell into disrepair.

How not to break loose and work

A few final tips:

• Always find out the full information about the product that you are going to offer to customers.
• Don't advertise all at once, let the buyer get used to you, explain what you do, learn about your preferences, and only then start the presentation.
• Watch your appearance and manners. People who look bad tend to sell much less.
• Train. Read books, attend trainings, do everything to become more confident and calm.
• Analyze mistakes and don't be afraid to ask more experienced friends for advice.
• Don't neglect the Internet. There is a great opportunity to advertise yourself and your product.
• Find your sales method, and in no case do not bring aggression into it. If the seller starts to push, people feel it and almost immediately “merge”.
• In no case do not spoil relations with relatives, friends and colleagues. You can stop getting involved in network marketing, and then your whole team will forget about you - but the people who were with you before all this will no longer be able to treat you the same way.
• If possible, use the product yourself. Make additional advertising in this way - believe me, it will be interesting for potential customers.

Results

So, let's summarize briefly. For starters, be extremely careful. Never get involved in an initiative if you do not like it, in no case do not pay money if you are not sure of the integrity of the company, etc.

If possible, google reviews about network marketing, in particular, about the company you are interested in, check every word spoken by representatives, look for people they talk about on social networks - sometimes you can find a lot of interesting things in photos or in groups. Such a short investigation may well save you nerves, time and money.

If you suddenly fail to earn the expected money, try to think: yes, you can make money in network marketing, but for this you need to have a special mindset and attitude. Maybe it's just not for you? There are people who can't bring themselves to do math, and this kind of work just doesn't suit you.

This means that no one is forcing you to run to the next network company, in the hope that mountains of gold will begin to roll in right now - just return to your old job and try to console yourself with the fact that many people besides you also cannot withstand such a race and refuse from "easy" earnings.

Probably, most of our readers at least once in their lives had to look for additional income, or even a place of their main job. Moreover, this happens not only with young specialists who have just left the walls of an educational institution. Everyone is looking for a job or part-time job, from schoolchildren to pensioners. The reasons are different - someone does not have enough money to meet basic daily needs, someone wants to save up for an expensive car or apartment, young people living with their parents strive to gain at least minimal financial independence.

The search for options, as a rule, begins with the study of the media and sites that post job ads. Experience shows that there are almost no valuable offers there. And some we simply do not pay attention to, believing that they are not worth it. Network marketing ads often fall into this category. The attitude to this occupation in our society is very ambiguous and mostly negative. Epithets like "scam" and "divorce" are not the toughest in relation to MLM (an abbreviation of the English term MultiLevel Marketing, which "in our opinion" means "multi-level marketing"). But is it really so sad?

We are all adults and we understand that it is possible to draw some conclusions only after studying the issue. And at the same time, many of us sin with unreasonable assessments of this or that phenomenon, inspired by other people's impressions or other people's experience (it doesn't matter, negative or positive, but someone else's). It seems that network marketing has fallen victim to just such an assessment, although many do not even really understand its essence.

In a nutshell, this is just one of the ways to promote and sell a product, which, like any other, has its advantages and disadvantages, which we will deal with today. This whole scheme is carried out with the help of a large number of people forming a network. Information about a product is spread from person to person, there are no intermediaries who buy goods in bulk and resell them at an inflated price, and there is no expensive advertising. The significance of these factors will be explained with an example.

All of you know Orbit chewing gum and have at least an approximate idea of ​​how much it costs in our stores. So compare - the cost of producing one package (10 pillows) is equal to a maximum of 50 kopecks, and we buy it hundreds of times more expensive. And all because before it hits the counter, it passes through the hands of several wholesalers, each of which makes its own margin (the manufacturer, of course, also lays his own). Add here a lot of money for advertising in the print media, on the streets, TV advertising, and you get a figure from the store price tag.

MLM is a direct sales system, devoid of all these heaps, so the goods in such networks are often cheaper than in retail outlets. And not because they are fakes or low-quality goods, as some people think.

The earnings of network members consist of a percentage of the cost of goods sold and a reward for attracting new people. That is, it is profitable to involve newcomers in the network, but the process is not simple. Here you need to be a bit of a psychologist and be able to unobtrusively convince, conveying to the person the meaning of this sales technology and its inherent advantages.

By the way, it is with such an unpopular phenomenon as financial pyramids that many people compare MLM networks. All this comes from a misunderstanding of the sales mechanism. But the mere fact that network marketing does not require large investments and does not promise fabulous profits in return for nothing should suggest that this is not a “scam”.

Here, in order to achieve something, you need to work hard to create your own clientele. And profit does not always come immediately, for some time, you may have to work in vain. But in any case, your efforts will bear fruit, and after a certain period of time you will begin to receive income. If you connect to a large network, then you should not count on a huge income, but you can definitely earn an additional 20-30 thousand rubles a month.

True, in order not to get burned, you need to be able to distinguish a real network company from a pyramid that disguises itself as one. Therefore, we advise you to take into account a number of points before becoming a member of such an enterprise and attracting friends and acquaintances to it:

1. First, a real MLM company will offer you to sell a certain product (product or service) from the manufacturer's catalog. You will not be forced to buy goods for the future, you will only work with products already ordered by your customers and pay for them on the day they are received from the warehouse.
2. Secondly, you should be alerted by the requirement to pay membership fees or buy some "securities" that actually have no value outside of this structure. You will also not be paid for the volume of products sold. You will be rewarded solely for the number of attracted members who have already paid the same membership fees. If everything is as we have described, then you have landed on a financial pyramid and you should not linger there.
3. And finally, thirdly. There are companies that offer to sell some hardware or software, but require you to pay a certain amount in advance for a certain package of services, without which you will not be able to work, as well as attract a couple of new participants. The mini-network that the participant creates in this way becomes the source of his income. To be honest, such schemes look doubtful, although, in fairness, it should be noted that such companies still have a product for implementation. But climbing the career ladder here is almost impossible, even with the skills of a psychologist, having leadership qualities and oratorical talent.

That is, the conclusion from all of the above is obvious - you can engage in network marketing and succeed in this business only if the conditions for cooperation are clear and transparent, and there are no points of doubt.

1. Let's start with the fact that the MLM system makes the cost of goods (services) much lower for the buyer, since the price does not include advertising costs and intermediary margins.
2. The goods are delivered to the consumer in a short time due to the fact that the logistics are well thought out and the company has a network of warehouses in different regions (cities, countries).
3. Counterfeits and product substitutions are excluded, which is possible in the process of numerous resales. Grid companies go directly to the end consumer and falsifications are almost excluded here.
4. Employees involved in multi-level marketing are highly motivated, both in terms of the possibility of high earnings, and from the standpoint of building their own business.

Sellers' income consists of a percentage of sales, but not only. They can also recruit new people and get rewarded for contributing to the expansion of the network (hence the name of marketing - network). Each member of the network can eventually, having created a fairly wide client base, establish their own small network business. The MLM system is beneficial to all parties - the manufacturer, the consumer, and the sellers (distributors).

For the manufacturer, this is a real opportunity to save on advertising without compromising the popularity of the product. The consumer is satisfied with the fast delivery, guaranteed quality, relatively low prices, the availability of samples and catalogs, as well as the opportunity to sometimes purchase those goods that are not on store shelves.

As for distributors, they have the opportunity to build their own business without having a large start-up capital, on an already prepared market (after all, the main network companies are widely known to the population) with a built-in sales system. In addition, they have the opportunity to get the necessary knowledge for free, as MLM companies pay a lot of attention to training and mentoring.

So, it would seem, everything is simple. But then why do many people who have tried themselves in this business fail and consider it nothing more than a scam? Most likely, they either did not show the necessary perseverance, or they simply lack the qualities without which there is nothing to do in network marketing.

It must be admitted that networking is not for everyone. And not because someone is bad, but someone is good. It's just that this job, like any other, requires a certain set of qualities, without which success will be very difficult, if not impossible.

As a rule, people who do not accept the rigid framework of work "from call to call", who are creative, sociable, persistent and striving to build their financial independence with their own hands and on their own mind, can advance to the highest levels. If you want your life and your income depended solely on you, if you know how to set goals and persistently go towards their achievement, know how to communicate freely with people, have the gift of persuasion and the inclinations of a psychologist, and also strive to constantly improve the level of your education, then MLM is exactly what you need.

And separately I would like to say about patience and perseverance. The fact is that most of those who did not achieve results in this field, gave up at the initial stage of work. After all, this is not a job where, no matter how successful you are, you will still be paid your due salary. You need to be ready to work for some time on future results (even without making a profit), create a client base, and master the intricacies of the profession. But over time, your perseverance and your patience will certainly bear fruit, which will definitely please you.

Of course, you should start with choosing a network company. There are different options here - you can connect to a company with a name that is well known to people, where there is already an established and developed distribution network. The product of such a manufacturer is easier to sell, because people know it and trust its quality. But there is also a downside here. It consists in the fact that in such a network you will find yourself very far from the top, it will be difficult to move forward, and your income will not be very high.

Another option is to join a newly established company. Difficulties in this case will lie in wait for you from the very beginning, because you will have to convince people to purchase an unfamiliar product from a little-known manufacturer, and buyers are usually reluctant to take such a step. But over time, when the company creates a name for itself, you will find yourself on the top steps of the pyramid, and you will have a corresponding profit.

However, no matter which option you choose, first of all pay attention to the payment system and the bonus program. The scheme for making a profit should be understandable and transparent, there should be no penalties, and the employer's requirements for sales volumes should be realistically achievable.

Having decided on the choice of a company, think about how to generate income. It can be direct sales, or it can be passive income from attracting new members to the network.

Most often, beginners start with the sale of goods and this, in principle, is justified. Being engaged in sales, they get the opportunity to get comfortable in a new niche for themselves, study the market and create a customer base.

But professionals advise both to engage in direct sales and attract new people to the network. After all, it is not at all difficult, when telling a client about a product, to tell about the prospects that your work opens up. Most likely, some people will also want to try their hand at this business in order to get additional funds and the opportunity to purchase products at purchase price.

Once a certain amount of time has passed, and you have done a good job of building your distribution chain, you can stop selling altogether or do it much less. After all, you will receive the main income from the work of your subordinates.

Any occupation has its pros and cons, and network marketing is no exception:

1. From a positive point of view, it is worth noting the opportunity to buy high-quality products for yourself cheaper by a third, or even more than their “sales” value, that is, the price that you announce to your customers.
2. The second plus is the absence of the need to invest your own money in the business as an initial contribution (membership fees), of course, if it is a legal network company, and not a disguised pyramid.
3. Not to mention the possibility of free education. As a rule, companies, taking care of increasing sales and expanding their network, spare no time and money to familiarize distributors with their products, effective sales techniques and rules, ways to build their own business for passive profit, etc.
4. And, finally, with the advent of the opportunity to conduct such a business through online services, distributors no longer need to stop people on the streets in search of customers, come to their homes, offices, etc. Now you can work remotely.

Among the shortcomings, perhaps, it is worth noting the fact that the expansion of the network leads to a decrease in income, and new partners receive much less than those who came before.

There is a lot more to be said about network marketing, but we set ourselves the task of explaining the essence of this phenomenon as simply as possible and giving you the opportunity to navigate how such work meets your needs and characteristics of your character.

Hopefully, you will now be able to make your decision to participate (or not participate) in MLM based on your own conclusions, and not be guided by the feedback of former unsuccessful distributors. Good luck.

If you do not want to become victims of scammers, then you need to know exactly what an MLM business really is. Because here it is too easy to fall into the trap of a financial pyramid, and end up without money.

In this article, we will analyze how to distinguish a real MLM business from financial pyramids. And is it really possible to make money in MLM?

And for starters, let's look at what the essence of the MLM business is, and why it is so much disliked by "the people".

What is MLM business in simple terms

The name "MLM business" comes from the English MLM - "Multi-Level-Marketing" (literally - "multi-level marketing"). Other names for the same phenomenon are network business, network marketing and the new "fashionable" name - "network marketing".

It denotes one of the options for organizing marketing - a scheme for distributing the company's products. Classic business is when there is a store where people come to buy our goods. The network business option is when a lot of people take our product and distribute it among their friends.

That is, in MLM we do not hire employees for a salary, we do not rent stores. Our task is to recruit as many volunteers as possible who will distribute our products themselves, receiving a percentage of sales for this.

In addition, these volunteers of ours will recruit their own volunteers. And then they will already receive a percentage not only from their sales, but also from the sales of all their “recruits”.

Who Invented MLM?

MLM as a type of marketing was invented, of course, in America. The early network organizers realized that people were much more willing to buy certain categories of products when they were recommended to them by their acquaintances. These are products such as floor cleaners, shampoos, cosmetics (note that almost all of these are “for women” products).

And it turned out to be a good thing, in principle. The goods of network companies were usually cheaper, because there were no costs for renting premises and salaries for employees. And in terms of quality, they often surpassed analogues from stores. Thus, networkers were able to bypass the most severe competition in the market of household goods.

But here's the question. Why do “the people” dislike this very MLM and network business so much?

Why is MLM so disliked?

If you do not believe that MLM is not loved, look at the ads that they give in newspapers and on websites. They will never write directly - they say, we are recruiting people into the network business, come to the meeting then and then.

No, everything will always be hidden there and disguised as "opening a branch of the world's largest company" and under "need an assistant to the head of the business, I will teach you everything, salary from 50 thousand per month." Why such secrets and enticements? And because if you directly write that you are recruiting in MLM, no one will come to you. Because they don't like MLM =)

And there are two main reasons for that.

Reason #1 - Destroying Relationship Foundations

Have you ever wondered why we (humans) recommend anything to anyone at all? Why would we tell a work colleague where they make delicious sushi? Why should we advise a friend which car is better to buy? After all, it doesn't really concern us.

But nevertheless, we really want to run at least from the other end of the city, if someone needs our recommendation, and at least force him to listen to us. What is the reason for this behaviour?

Perhaps you think that it is because you are such a kind and nice person who simply strives to help everyone around you as much as possible. But actually it is not. We are happy to recommend, because in this way we dominate those to whom we recommend something.

Judge for yourself - we have some kind of Knowledge. that the person in front of us does not have (be it knowing where you can eat sushi and not get poisoned, or knowing which car is better in terms of performance). And by sharing this Knowledge, we show that we are better. Yes, yes, we are better and higher and smarter than a person who does not have this Knowledge.

And the higher the result a person receives on our recommendation, the stronger our dominance will be. Accordingly, we sincerely try to recommend only the best. And the one who asks us for advice subconsciously feels all this, and therefore believes our recommendation.

MLM should have been based on this principle, but here the whole thing is spoiled by money. When our familiar network manager recommends something to us, we always have a suspicion that he does it solely for his own monetary gain. Even if he really likes the product and would recommend it for free. But an unpleasant aftertaste remains.

Thus, MLM interferes with the fundamental set of unspoken laws of human relations (it is also called the "social contract"). And it destroys friendships, friendships and even family relationships. And that's why people don't like him.

Reason #2 - Remotivated Zombies

If you have ever met a real "networker", then of course you understand what I'm talking about.

The basis of MLM marketing is strong training and strong motivation of network members. Humans are by nature very lazy and shy creatures. Getting them to sell something to strangers and unfamiliar people is not an easy task.

And therefore, each new recruit undergoes intensive training, where the emphasis is on motivation. They are brainwashed with promises of huge profits. They are told that they are the chosen ones, and everyone else only envy them. And they are also very convincingly told that their product is almost the most ingenious invention since the light bulb.

And people are gradually "blowing the roof." Can you imagine what it is like to know the whole truth alone (that the best work is a network business, and the best cream is Oriflame), but no one believes you, and shies away from you like the plague?

As a result, it becomes very difficult to communicate with networkers. All they talk about is the network business and their product. All they do is try to drag everyone they meet into their structure, to the “bright side”.

And again, this leads to a split in friendships and family relationships. That's why they don't like MLM. In the view of people, getting into MLM is like getting into some kind of sect. And the one who is “trapped” will soon begin to rewrite his apartment for some regular “Herbalife witnesses”.

But there are, of course, positive aspects as well. If you do not lose your head, then MLM business can be an excellent development option for you. And you will keep friends, and you will still find new ones.

How much can you earn in MLM?

Networkers are very fond of this joke:

A man comes to the city and sees that on one side of the street all the houses are big, beautiful, well-groomed. There are expensive cars near the houses, and all the people are cheerful and happy. And on the other side of the street, the houses are small, dirty, dilapidated. All people in rags, eat rats.

He comes to one of these dirty houses and asks a passer-by why the houses opposite are so beautiful, but here they are so bad.

A passer-by replies - "Ah, there are networkers living opposite who are engaged in MLM."

The man asks - "What are you?"

Passer-by - "But we do not believe them!"

The anecdote is hilarious. But, unfortunately, as in any other type of business, most people employed in MLM have absolutely no income. A very small percentage of networkers have an income comparable to the usual salary of a qualified specialist. And only tenths and hundredths of a percent of all mlmschikov make really big money.

How to develop in MLM?

Yes, you can make money in MLM, and even a lot. But only on the condition that you actually work. And to earn money, you will be mainly engaged in recruiting people to your structure, and not in selling the product itself.

If you want to develop in network marketing, you need to have a huge number of personal meetings every day. And we also need to ask friends to organize parties at their homes and bring their friends - for whom we could conduct an “impromptu” presentation of our product and business.

And most likely it will take you several years to build a large and loyal structure with which you can have large incomes. Therefore, please do not flatter yourself with promises of quick earnings. As elsewhere, you have to work here.

And most networkers eventually realize that MLM is not the option to which they would like to devote their entire lives. Therefore, they go into other types of entrepreneurship. But they retain the skills they have acquired while working in MLM.

And even today there are projects that masquerade as MLM, but in fact are something much worse.

How to distinguish MLM from a financial pyramid

If you haven't noticed yet, today there is a huge offer on the Internet to participate in some super innovative projects. As a rule, we are talking about decisions that will turn the whole world upside down in some area. In the field of housing, in the field of transport, in the field of the Internet or in the field of telecommunications.

The only problem is that this ingenious solution is still under development, and it cannot be used yet. Or you can use it, but it is so inconvenient, crooked and weak that it loses even to free counterparts.

And you are invited to either buy a share in this project, or buy a product and pay for it every month. And people do it, and with great joy. The question is why? And then, that they can attract new members, who will also pay every month, and you will receive some percentage from their payments.

Almost like in MLM, but with one difference - there is no specific product that you could use. That is, you pay not for the product, but for the opportunity to receive money from those who are below you in structure.

And such an organization is possible precisely because of the "virtuality" of the proposed product. It does not need to be transferred, stored. It may not be used at all. The main thing is to attract all new participants “for themselves”.

How financial pyramids collapse

All these projects always end the same way. One day, people who can be attracted to the pyramid simply run out. And then the members of the "lower layer" stop paying their monthly dues. And why should they pay someone if no one pays them (because there is no one below them)?

Then the penultimate layer stops paying, because the last one does not pay them. And so on, until the pyramid burns out to the very top.

Some pyramids appear and disappear in a couple of weeks. Some last for years. But the main thing is that they always have the same ending. And if you are offered to participate in some kind of "network business" where there is no product, or it is very complex (too innovative for a mere mortal to understand its idea) - most likely you are being lured into a financial pyramid.

Here are some more indirect signs of a financial pyramid:

• Promises that it will not be necessary to sell anything and recruit anyone.
• Mandatory monthly payments.
• The impossibility of personally checking the quality of the goods (or the poor quality of the goods).

In general, it is the quality of the goods that distinguishes the real MLM in the first place. Recommendations are good. And your friend will probably buy something from you once if you advise her. But for her to pay you a second time - here it is already necessary that she really likes the product.

Therefore, pay attention to indirect signs, and do not fall for scammers. And then they feel themselves on the Internet like fish in troubled waters. Is it really possible to do a real network business via the Internet?

Is it possible to do network business via the Internet?

Here it is - the golden dream of any networker. No need to go to any personal meetings, no need to recruit anyone. Stay at home, spread links to your product on social networks and sites - collect the cream.

But personally it seems to me (and this is just my personal opinion) that the network business in its original understanding cannot exist on the Internet. There are two main reasons for this:

1. MLM business is a referral business. We recommend the product to our personal friends, and they recommend it to their friends, and they recommend it to their friends. This is how the structure is going. And if we recommend a product to everyone in a row, then this already becomes a regular advertisement.
2. MLM business rests on a quality physical product. That is, you can feel it, try it. And you definitely need to give the buyer the opportunity to "feel" before buying. Accordingly, you can’t get away from personal meetings.

And if you really don’t want to go to personal meetings with anyone, but work via the Internet, then it’s better to do affiliate programs. It's the same as MLM, but you just advertise some product and get a commission on sales.

That is MLM through the Internet is possible. And it is called - "earnings on affiliate programs." Look at my article, and you will understand a lot.

By the way, there are also multi-level affiliate programs. That is, there you can also earn from attracting new partners, and not from personal sales. Watch my video on how I make money on affiliate programs (opens in a new tab).

Conclusion

In no way do I want you to get the impression after reading this article that I am against MLM business. In fact, I am a big supporter of people starting to take responsibility for their own income, and trying to provide for themselves by their own efforts, and not relying on "uncle".

And to start an entrepreneurial career, network marketing is a very good option. You will gain experience, fill the first bumps, learn to resist the pressure of the public. The main thing is that it approaches everything with a head, and look at things objectively.

Otherwise, there is a high probability that you will be disappointed in the usual MLM, and instead of using the acquired skills to open your own business, you will wallow in financial pyramids and financial bubbles.

Don't forget to download my book. There I show you the fastest way from zero to the first million on the Internet (squeezed from personal experience over 10 years =)

See you later!

Your Dmitry Novoselov

• • History of MLM business development
  • The essence and essence of MLM business
• 2. Conclusion

This sensational and somewhat scandalous abbreviation was not heard except by babies. Some believe that this is another scheme to deceive gullible consumers, others - that there is a lot of opportunity. MLM what it is actually let's try to figure it out in this article.

1. What is MLM business or network marketing

MLM (MLM in Russian version) is an abbreviation for English multilevel marketing, MLM- multi-level marketing. Or as it is also called - network marketing.

The basis of this method is not direct sales through classic retail stores, but sales through a network of sales agents (partners, consultants, dealers).

MLM business structure

History of MLM business development

The history of network marketing begins in 1927 when the creator of nutritional supplements K. Rehnborg began distributing his own vitamin supplement and achieved very good results. When the demand for his supplements exceeded his capacity, he came up with the idea of ​​enlisting friends and acquaintances to distribute his products for an appropriate fee. Later, people from his company Nutrilite Products Lee S. Mitenger And William S. Casselberry developed the basic principles of MLM, which soon became popular all over the world. And in the late 50s, employees of the same Nutrilite Products founded a well-known trading Amway network .

MLM business and MLM companies received the greatest popularity in 1980 -e - 90 th years.

Nowadays, network companies offer a very extensive list of products: from vitamin supplements and cosmetics to dishes and household appliances. Multi-level marketing is the backbone of companies like Avon, Oriflame, Faberlic, Zepter International. According to some estimates, the annual turnover of network companies is about $200 billion.

The essence and essence of MLM business

Distributors form the backbone of the business.

Distributor is a sales agent whose activities can be divided into three components:

1. Product promotion.
2. Attracting new distributors and creating your own subnet.
3. Conducting training activities (trainings, seminars) aimed at achieving the goals of the first two points.

The distributor's remuneration consists of payment for personal sales and for goods sold by his subnet.

The larger the personal network, the more bonuses the agent who has developed it receives.

Another distinctive feature of such networks is out-of-store sales. Sales are carried out, as a rule, on the territory of a potential buyer (home, office) or on neutral territory (shopping centers, cafes, etc.).

Success in network marketing

Legality of network mlm business

Disputes over the legality of the activities of MLM companies have not subsided so far. This is due to the fact that dubious structures are disguised as multi-marketing networks, the purpose of which is to build financial pyramids.

Many of these companies generate income by forcing future agents to pay for numerous stages of "preparation" - making an initial payment, buying a minimum batch of "goods", mandatory payment for expensive trainings.

As a result, only the organizers of such pyramids remain in financial gain, and all the participants-stages of the pyramid are left with nothing, because, as such, the promotion of the product, as well as the product itself, does not exist.

Impressive conference halls are rented for trainings, figureheads are invited, allegedly having achieved tremendous success.

Business trainings in MLM companies

In order not to fall into the network of these scammers, you should not trust organizations in which work requires significant financial investments. The dubious quality of the goods or its complete absence should also alert.

The purpose of a serious mlm business network structure is to promote goods (usually of sufficiently high quality) and develop distributors in particular and the network as a whole.

In some countries (Korea, China, USA), the activities of MLM companies are seriously limited at the legislative level.

2. Advantages of MLM business and its advantages

What is attractive about working in this business?

• Underemployment. According to statistics, most sales agents are busy from 1.5 to 5 hours a day. This allows you to work on a flexible schedule, which is important for students, pensioners,.
• Partnerships that allow the employee to choose the pace of work, content and companions. There is no negative effect of "boss-subordinate".
• The ability to create your own business with minimal investment, using a ready-made scheme and receiving comprehensive support, which minimizes the risk of failure.
• A gradual transition to this type of business, without the need to drastically change the scope of activities.

The companies themselves also have significant advantages by choosing the MLM format:

• Low advertising costs.
• Lack of expenses for the maintenance of offices and shops.
• Selling exclusively your own product, which eliminates the risk of "getting lost" on a common shelf.
• High customer loyalty.
• Additional income from paid training events.
• The distributor replaces a whole staff of employees: advertising specialists, customer service, recruitment managers.
• In times of crisis, when classical linear trading companies suffer losses, the growth of sales agents is observed in the MLM business. The specialists who remained as a result of layoffs go to these structures in search of alternative earnings.

Active "anti-network" the policy will be carried out as long as the format of multi-level marketing exists. Someone sees this as an intensified competition for the consumer of large retail chains, someone rightly blames the creators of illegal pyramid schemes. But one way or another, there are more than enough examples of successful network companies. It is important to make the right choice.

Watch the video: MLM business what it is - its trends and prospects

2. Conclusion

With full knowledge of what an MLM business is, you can make an informed decision whether to use it to access certain products that are not available in regular stores, generate additional income, or develop your own trading structure with a solid income.