MLM business, or network marketing, began to conquer the Russian market back in the 90s of the last century, and still remains in trend, attracting new entrepreneurs to its ranks. Thanks to this form of sales, we distribute all kinds of supplements, cosmetics, detergents, dishes, etc. According to the Direct Selling Association, 43.5% of the market is occupied by personal care products, 29%- products that promote a healthy lifestyle. 11.2%- clothing and accessories, 9.5%- household chemicals, 5% - household goods and others. But in spite of quite high demand for goods, and the growing turnover of companies engaged in network business, our attitude towards MLM is very ambiguous.
On the one hand, hundreds of thousands of people come to the MLM business who want to earn money and build a career: at the end of 2017, 3.8 million people were engaged in network marketing. With another- Network Marketing is often avoided and often not seen as an opportunity to earn money, preferring a stable job with a stable monthly pay. The thing is that often people have no idea about the true face of network marketing. Let's try to figure out what MLM business is today, what positions it occupies in Russia, whether it has prospects and what awaits it in the future.
What is attractive MLM business
The name MLM comes from the English multilevel marketing, that is, multi-level sales, sales. Network marketing is a certain type of marketing of goods and services by independent distributors. Each of them can not only engage in sales, but also attract new partners, and they, in turn,- their own. Thanks to this approach, a “network” is formed, each member of which can receive interest both from their own sales and from the sales of people attracted by them. The bigger the distributor network- the higher his income.
Let's say you have a store that sells cosmetics.. You will be able to make a profit only when buyers come to you. opened - earnings will also depend on its attendance by customers. Network marketing will provide completely different opportunities. People themselves will order the necessary goods, buy them and distribute them among friends. It is for this reason that it is so attractive to companies that produce certain products. "Dinosaurs" of the market, such as Avon, Mary Kay, Oriflame, Amway do not have worthy competitors for the simple reason that their goods are often sold out almost immediately, even at prices that are many times higher than the "store" ones. Sales through stores are fraught with competition and unnecessary problems that can be solved through network marketing. The manufacturer does not need to spend money on advertising, rent of retail space and incur other expenses. But for networkers, a big plus is that companies not only earn money themselves, but also give everyone the opportunity to earn- those who love their products.
In network marketing you can:
- have a free work schedule;
- get by with minimal financial investment;
make a career;
- create passive income;
- transfer the contract by inheritance or sell.
But despite all the advantages, not everyone manages to achieve success in MLM.
Millions on MLM: how American multi-level marketing differs from Russian
American MLM marketing differs from Russian only in the attitude of representatives of two nationalities towards it. Americans most often think of network marketing as a side job or second job. They are ready to devote some time to it, but not all their lives. If things are going well, and there is not enough time to manage a multi-level company, a few leave their jobs and are engaged only in MLM business. Some people can actually become millionaires through MLM. But this is only the top of the pyramid, at the bottom of which are thousands of less successful entrepreneurs.
In Russia, newcomers often try to put all their efforts and resources into a new business and constantly run around familiar and unfamiliar people, offering goods and trying to sell it at any cost. To build their own network, many lack the skill or desire. Beginners basically see only a system of bonuses and bonuses in front of them, plus the opportunity to buy goods cheaply.
Network marketing today, like any other business, requires a reasonable approach and a clear plan of action. And one more thing: if abroad the times of lawsuits against network companies are a thing of the past, and business has become completely legal and profitable, then in Russia the opportunity to encounter fraud still exists.
Why people do not like MLM: 3 reasons for distrust of business
In fact, people have much more reason to dislike network marketing, as they often have to deal with fraud, dishonesty, and low-quality products being sold.
Reason 1. lure . When selling goods, networkers can resort to deception. For example, they invite a person for an interview at a company. Any position can be offered: accountant, lecturer, secretary, etc. When the applicant comes, it turns out that they seem to take you, but you need to undergo training. And during the "training" they try to sell each candidate a product that he does not need at all. As it turns out, the position turns out to be just a "lure", and the real reason why people are invited to a fake interview- sales. The more candidates for fictitious positions- the more sales.
Reason 2. Zombies . If a person consciously comes to network marketing, then sales training takes place in an enhanced mode. The beginner is so motivated and zombified that he begins to believe that the product he is selling- the best in the world, and he himself, by selling it, is able to make mankind happy.
After such "brainwashing" it is quite difficult to communicate with networkers. No matter what they talk about, they reduce all conversations to new job and marketing your product. Newly appeared distributors are ready to talk about it for hours and offer it to their friends, writing best qualities, which in fact do not exist at all.
The saddest thing is that by offering goods to relatives and friends, MLM business representatives can destroy relationships with friends and even relatives. Seeing how a person is trying hard to sell a product that the rest does not inspire confidence in, others begin to believe that he "has gone nuts", to put it mildly, they do not want to communicate with him.
Reason 3. Manipulation . An experienced network marketing representative will be able to sell a product to anyone. Networkers are able to exert such strong psychological pressure on the buyer that they are ready to buy a second-rate product at an inflated price. In the late 90s and early 2000s, the streets were literally teeming with merchants offering overpriced Chinese-made goods. Having thrown open the door of the apartment, people often saw another network salesman with a huge bag, who offered "unique" medical equipment. And many bought another miracle remedy, and after a while they realized that they had bought a low-quality thing quite expensively.
Over the past ten years, direct selling has become more civilized, and network marketing is looking for new tools to work with. But for a certain part of the population, MLM business is still associated with something not very good. Unfortunately, many people think that network marketing- this is necessarily a fraud and imposition of goods. Many people think that it is unrealistic to make money on networks, and that all the money is concentrated “at the top”.
The negative attitude towards MLM business was also “inflated” by the media, whose representatives, not understanding the issue or in pursuit of a sensation, combined such concepts as network marketing, fraudulent schemes and financial pyramids. This does not negate the fact that some network companies work honestly, and some mlm people earn decent money.
How to start a business from scratch in MLM
When deciding to go online business, you need to be careful. If the company has been on the market for a long time, then there are no problems. And if recently- then it is better to take a closer look at its products or services. If you decide to dedicate part of your life to network marketing and think , pay attention to some points.
- The product is distributed through network marketing because it is profitable. Any other reasons that managers can talk about- invented.
- The product should really please you and be interesting. If not- don't bother spreading it.
- You must use the product yourself. Because selling products, you need to make her good advertising. If you yourself do not believe that your product- just a miracle, a miracle will not happen, and you will not find buyers.
- You do not need to sign documents on the first day. Check certificates, consult with lawyers.
- Don't bring money right away and don't buy anything before you collect necessary information about company.
These simple tips will help you not to miss when choosing an MLM company for making money.
How to choose the right company to work and start earning
In order to choose the right company, you need to start from three positions: products, marketing plan and management. First of all, you should pay attention to products that should:
- have an affordable price for you and your friends;
- have a certificate;
- have a brand;
- be relevant and in demand;
- understandable and necessary for a wide range.
Must see marketing plan, that is, a system by which you will receive interest, bonuses and move along career ladder. It should indicate:
- the amount that is needed to enter the business (you should be wary of free entry and too high a price tag):
- monthly volume of purchases;
- a clear reward system;
- opportunities to obtain certain ranks in the system.
Company management is of great importance. A serious company must:
- have accessible information about the manual and products;
- have branding;
- have good information support;
- provide an opportunity to choose products;
- ensure the delivery of goods to the regions;
- systematically conduct training;
- provide an opportunity for feedback with distributors wishing to improve the structure;
- pay commissions on time;
- do not encourage unnecessary purchases.
Running around acquaintances and offering them your goods, big money not earn even if you the best specialist by sales. From the first steps in MLM, you need to start creating your network. Your acquaintances may be the first; let's say 10 people- your first line partners. You will begin to receive interest on the products that they sell. Your first partners will attract their partners, those- their own. You will be deducted certain percentage from the sales of partners of all lines: attracted partners of your first partners, then their partners, partners of the next line, and so on.
Thus, you will create a network of partners from which you will receive passive income. But only a few can create a truly large network. This requires not only to be trained, but also to have a great desire, ability and time.
The network is like a pyramid. Therefore, the network business is often called a pyramid scheme. But it's not. The financial pyramid does not imply the sale of any product. This is the main difference.
If you came to network marketing:
- Give priority not to selling products, but to recruiting, recruiting partners. Only it will provide an opportunity to receive passive income and be financially free.
- Try to stand out among competitors, which can help with a personal page on social networks or a website.
- Sell the product correctly, without imposing, using softer forms of influence.
Not everyone succeeds in MLM, but some do. If you are ready to try - choose a company and go for it.
Internet network marketing: the second wind of business?
Network business has always been characterized by such types of advertising as the distribution of catalogs and leaflets, but today the Internet is becoming increasingly important. Until now, experts are arguing about whether it is worth doing network marketing via the Internet. But it is becoming more and more difficult to look for new partners or clients without modern promotion. For example, one of the partners of the EMGOLDEX company calculated that thanks to access to the Internet, you can save more than 10 years and get passive income much faster.
Meetings and training that sponsors host offline can be moved online. So they save both their time and the time of partners. Moreover, there is an opportunity to place advertisements that thousands and even millions of people can see and become interested in the product. There are already sites that sell the products of companies represented by MLM business.
But here one negative trend emerges. Products advertised and purchased on these sites do not always meet the interests of the consumer. Users, once having purchased a product that disappointed them, will not take it again.
All positive sides the product can really be presented only at a personal meeting, as well as to advise a person. But on the other hand, without the Internet, getting a good passive income these days is almost impossible. Where does a person go when he decides to buy a new thing, cosmetic product? Enters requests, looks forums. And only then begins to communicate with friends on the phone or in the same social networks.
So it's better to use two forms. Any representative of the MLM business needs to personally communicate with clients and potential partners, conduct offline training, but at the same time, one cannot ignore modern methods business promotion.
MLM business trends 2019
If five years ago main trend in direct sales there was the purchase of goods at a lower price, today the creation of your own business and a free work schedule come first. People seriously think about whether they prefer, for example, or MLM business in which you can observe new trends and trends.
Using an Auto Funnel or Sales Funnel . This is a method of quickly recruiting new partners with the possibility of generating passive income within a few months. For those who are already working in the business, it is no secret that you can recruit partners only because you share information about the product. You meet people you know and start talking about him or get to know someone for the purpose of attracting them online. When you start talking about the product and the benefits of working for the company right away, the percentage of trust in you decreases. Many will assume that you just want to sell products that are not in demand. The sales funnel allows you to present the same offer, but in beautiful packaging and with modern technology.
What do I need to do?
- Decide on the target audience. Not only gender and age are important here, but also the sphere of interests. These should be people whose problems you can solve. For example, offer fat people drugs for weight loss. For this purpose, it is best to use targeted advertising, thanks to which you can filter the desired target audience and show ads only on target sites.
- Increase traffic. After the audience is defined, you can start attracting traffic, for example, through social networks. It is enough to come up with an interesting post with a video, or a picture and an appeal, and gradually promote it.
- Create a lead magnet. It is a training mini-course or a short video, for downloading which a person must leave their contacts. In the future, you can send him letters with a proposal to solve his problem.
- Invite to a presentation. The presentation can take place both online and offline, the main thing is that most of the participants become your partners.
Use of digital marketing , which is increasingly used in the world and in Russia in particular. Therefore, you need to learn how to use cross-posting services, all kinds of bots and CRM systems.
Using a personal brand . The best opportunity to attract to your networks- personal success. If you have already been able to earn real money and attract a large number of partners, you need your own brand, thanks to which you can attract new people.
How to develop a business mindset with MLM
MLM business continues to develop and offer new opportunities to people who come into it. Even if you are not going to devote your entire life to network marketing, you can gain the skills to build your own business. MLM will help you gain experience and knowledge on how to build a business, find clients and
How to create passive income in 4 days
A marathon where you will create live passive income from scratch and learn specific strategies for investing in apartments, houses, garages, cars and even profitable sites
To beginWhat is network marketing, what are its pros and cons? Which MLM business companies are popular for 2018? How to make money in the network business the first money?
Hello, friends! This is Alexander Berezhnov, an entrepreneur and one of the authors of the HiterBober.ru website.
Today, the network marketing industry is gaining a new wave of popularity, and the development of the Internet plays a significant role in this.
However, this concept is still controversial in society. Someone calls network marketing almost the only opportunity to open your own business without investments, others are sure that this is all a pyramid scheme, a scam and a hoax.
Some time ago, I myself was involved in network marketing and I know firsthand what it is. In this article, I decided to dot the “and” and reveal this topic from all sides, including taking into account my experience in this industry.
After studying this article, you will firmly decide for yourself whether it is worth doing an MLM business, what are the pros and cons, and also find out which companies are better to start in and why.
So, let's begin!
1. What is network marketing (MLM) and what is its essence?
I'll start with a definition and then expand on it and give examples.
For example, the production cost of ORBIT chewing gum ranges from 20 to 50 kopecks per pack of 10 pads. However, while the gum is on the counter in the store, its value increases by several thousand percent! It's all the fault of intermediaries - large and small wholesalers who sell chewing gum to each other.
But everything does not end there, because, as you know: advertising is the engine of trade and intermediaries spend a lot of money on advertising.
Fact
In large companies, up to 50% of the final cost of the product is the cost of advertising and promotion of the product.
Thus, we buy Orbita packaging for 20-50 rubles. Yes, this cost, of course, includes the manufacturer's own margin, but intermediaries also want to eat. So it turns out that the end consumer suffers, who overpays at exorbitant prices.
About a hundred years ago, people thought about the problem of unreasonable markups of resellers and intermediaries.
Network marketing idea
Make the process of promoting goods (services) more convenient, cheaper and faster. Remove intermediaries and expensive media advertising from the promotion scheme.
This can be done if the people themselves tell each other about the product of the network company, and their motivation will be the percentage that they will receive from the sales of the products of the MLM company.
But you won't earn much just on interest. Therefore, multi-level marketing allows you to build own business by creating a wide network of consumers of goods.
It is assumed that a person who has developed his network structure will receive a percentage of the entire turnover of his structure. That's how he can create himself tens of thousands of dollars a month.
Be sure to watch the video below to learn how you can create such an income in mlm. This is a cartoon about Pablo and Bruno - ordinary guys who chose different ways to gain financial freedom, and both wanted to become millionaires. Let's see what they got.
Network marketing was designed to solve the following tasks:
- Reduce the cost of goods for the end consumer. This can be achieved by moving away from expensive standard advertising on radio, TV and the Internet.
- Accelerate the process of delivering goods to the end consumer. It is achieved through well-thought-out logistics (network of own warehouses in different cities and countries).
- Avoid fake goods. In the process of resale of goods, it is possible to substitute it and falsify large quantities. MLM company works directly with the end consumer, so the likelihood of product falsification tends to zero.
- Motivate company employees with money and business opportunities. In multi-level marketing, there is an opportunity to make good money and build your business from scratch.
2. How network marketing works
First, let me tell you about general principles work in this industry.
The manufacturing company has its own factories for the production of goods.
She sells these products without stores, products are distributed thanks to a built-in system of recommendations. In everyday language, this system is called "word of mouth".
A large number of people like this principle and they are happy to buy goods from the company.
Now all orders of an MLM company can be placed via the Internet, and paper catalogs that were popular some time ago with the development information technologies recede into the background.
The customer uses the products and can start building a business with a direct selling company. To do this, he needs to find several people who will constantly buy products and attract new business partners to develop the network. That's why this species marketing is called network marketing.
Having its own warehouses and delivery services, network company delivers the products to the warehouse, and then these products are delivered to the offices, which the company's partners (distributors) personally opened for themselves. Sometimes the company delivers the order to the client directly to the house, which is very convenient.
Now I will talk about the features and principles of multi-level marketing for the manufacturer of goods (company), for the end consumer (client) and for the person who decided to open his own business (entrepreneur) using the capabilities of mlm.
From the point of view of an MLM company
A distinctive feature of the promotion of goods in a network way is to reduce the cost of advertising their products. The company cares more about promotional materials for its distribution partners (sometimes called independent entrepreneurs) and building a system vocational training(mentoring).
It is from the qualitative transfer of the MLM idea from person to person that the business of the enterprise ultimately depends.
From the consumer's point of view
It is convenient for the client to receive goods with a quality guarantee, he likes affordable prices, samples, catalogs. Often, direct selling companies have exclusive products and accessories that cannot be found in regular stores.
From the perspective of a distributor (entrepreneur)
People who want to start their own business without investment can succeed here. After all, the whole system has already been built, the market has been formed, the majority large companies already heard by the public. In addition, a powerful system of training and mentoring in network marketing companies makes the opportunity to build your own business more than real.
3. MLM business industry - history and development trend
Network marketing originated in the West in the USA.
In 1945, American entrepreneurs Lee S. Mytinger and William S. Casselberry started their own business, becoming the national distributors of Nutrilite Products. The basis of their activities was the principle of recommendation (network) marketing.
Further, in the late 1950s, two companies were created in the USA: Shaklee and Amway. In Russia and the CIS countries, people are widely familiar with Amway products and the peculiarities of its business. The company itself was founded in 1959 by Rich DeVos and Jay Van Endel and was originally called the American Way Corporation.
The industry developed especially rapidly in the 1980s and 1990s. The range of products grew and by the mid-1990s, mlm-manufacturers offered their customers literally everything: from cosmetics and detergents to automotive products, household appliances, long-distance communication services and computers.
Today, the network marketing industry has undergone great changes and almost all mlm companies have gone online in one way or another.
In 1996, Russia established Direct Selling Association(rdsa.ru), which contributes to the development of the industry, its self-regulation and maintaining the reputation of the network business at a high level.
According to the Association for 2015-2016 in Russia, one way or another, multi-level sales are involved 6% of the total population(distributors), and these are millions of people, not counting consumers.
The Internet space has allowed the industry to develop at a rapid pace. And this is quite logical.
Example
You can now build your business in a network marketing company not only through face-to-face meetings at home or in a rented office, but also via the Internet, using the capabilities of Skype, email and social networks. Advanced entrepreneurs create their own websites.
This is exactly how “networkers”, as it is customary to call distributors of products of multi-level companies, are now actively processing the online space in order to expand the membership of their group (branch).
However, the development of digital technologies has also given rise to another side of this industry - the emergence of fraudulent companies and financial pyramids, which, under the guise of investment funds or just respectable mlm-firms, draw honest people into illegal and immoral schemes.
Later in the article, I will touch on the issue of fraud and tell you what not to do and how to distinguish a reliable network company from a scam.
4. Why do many people today associate network marketing with a pyramid?
In continuation of the previous paragraph, as promised, I will reveal the “pyramidal question”.
The association with pyramids, deceit and fraud in people arises rather out of inexperience.
I must say right away that there is the concept of "classic marketing" and "network marketing", although it is very conditional. For the sake of completeness, let me tell you how they differ.
1. Classic marketing
These are all the ways and means of promoting goods that we are used to seeing around - advertising on TV, radio, outdoor advertising and so on.
Selling goods in stores is also a standard way of promotion. As a result, all this can be attributed to the concept of "classical marketing".
2. Network Marketing
This is just an unusual way for the bulk of people to distribute goods. It, as you know, is also called multi-level marketing.
In this concept, there are no promotions, familiar to many, Retail Stores, there is no standard advertising in crowded places, and the goods themselves, as a rule, have more high quality compared to our familiar counterparts.
Unusual for many, the model of distribution of goods instills fear in those who have heard about various kinds of deceptions or have already fallen into financial pyramids.
Dear readers, remember!
Network marketing has nothing to do with pyramid schemes, fraud or illegal activities.
Associations with the pyramid arise because both in the pyramid and in mlm you need to attract people in order to earn.
Only in the first case, you get money for "heads", that is, your earnings depend from the number of people involved, who invested money in the pyramid, and in the second - the income depends on the turnover that the clients you attracted will make.
That is, if we are talking about normal multi-level marketing, you can sign at least 1000 people into your structure, but if they don’t buy anything, then your income will be zero.
In the pyramid, the opposite is true, where each attracted is obliged to make a contribution, usually quite significant (from 500 to 5000 dollars) and you are guaranteed to receive a percentage of his money, and your client will not receive a real product. He pays only for the opportunity to earn money by attracting new “victims”.
Below, in the answers to frequently asked questions, I have clearly outlined the criteria by which you can distinguish a good mlm company from a pyramid scheme.
5. Network marketing on the Internet without investment - myth or reality?
There is no myth here and cannot be. Building your network business over the Internet is new trend which is gaining momentum every day.
How to find a client in your mlm structure via the Internet - 5 proven ways to attract:
- Social networks. One of the most popular ways. You can create here a group (community) on the topic of earnings and self-development. The people who enter will be your potential customers. You can also “spam”, that is, send messages to everyone in a row, but then you risk getting your account blocked by the administration of the social network.
- Thematic forums. In the forums about earnings and personal growth, you can also find future partners in your multi-level structure.
- Contextual advertising. You can create a website and customize it contextual advertising thereby attracting targeted visitors. There is already an article on our site,. However, this method can be quite expensive for such a purpose.
- SEO - promotion. By analogy with the previous method. You can make your own Internet resource and write articles on it containing keywords related to success, earnings and network marketing. Gradually, these articles will be promoted through the subscription form located on the site, and you will receive people loyal to your activities.
- Lead generation. This method is to create a flow of contacts (applications) potential clients, which you will attract with various advertising tools. You can learn more about what advertising is and what types of advertising exist from. You can process applications of potential customers (leads) and attract them to your multi-level marketing company.
You can use these and other ways to attract potential participants from the Internet to your network structure.
6. Pros and cons of network marketing - an overview of the main advantages and disadvantages
Network marketing, like any phenomenon, has a number of advantages and disadvantages.
That is why there are people who fiercely campaign for mlm, and there are those who are afraid of "network". For clarity, I have compiled a corresponding table that reflects almost all aspects of the SM:
Pros and cons of network marketing:
| № | Comparison criterion | pros (+) criteria | Minuses (-) criteria |
| 1 | Opportunity to start your own business | You can open an MLM business with little or no investment and create passive income over time | Many novice distributors leave the business in SM, as it grows slowly and you often hear rejections |
| 2 | Doing Business Online | Unlimited Possibilities world wide web provide practically limitless opportunities for the growth of your business | Not all people will agree to cooperate with you and cost business with your company, since getting into an interested audience through cold contacts is small |
| 3 | Buying quality goods at an affordable price | In network companies, you can buy really high-quality goods, often their analogues on open market either not available or much more expensive. | Sometimes the products of multi-level marketing companies are unreasonably expensive, even if they are of high quality. |
| 4 | party, team | For many people in this industry, the very atmosphere of running an mlm business is a way of life and they feel “like a fish in water” here. | For most people, spending time at various seminars, trainings and events of such companies is tiring and does not correspond to their nature and psychological type. |
| 5 | Skill development, personal growth | In the process of work, you can acquire good skills in interpersonal communication, planning, leadership and management | There are not many people who are constantly striving for development, most prefer much more understandable ways of earning money, for example, regular work for hire |
| 6 | Reputation | It is believed that people with leadership and well-developed communication skills will certainly succeed here. | In society, the reputation of network marketing is significantly damaged, so finding like-minded people, and even more so turning them into your clients or business partners, is not easy. |
If you have not yet decided whether it is worth doing SM, then the criteria described in this table will help you once again understand whether it is for you or not.
7. Rating of grid companies in Russia - list of TOP-5 market leaders in 2017-2018
The most interesting thing is that the first two companies Avon and Oriflame occupy 31% and 30% respectively in this rating. This means that these companies are far ahead of our citizens in the MLM industry.
As you can see, Mary Kay and Faberlic have almost the same market share, while Amway is somewhere in between.
In any case, I am sure that you have heard if not about all of these companies, then most of them for sure.
I consider them reliable and I advise you to work with these companies if you decide to go into network business.
8. FAQ - answers to frequently asked questions
These questions are often asked to me, and here I cite them with answers as the most popular.
Question 1: Should a newbie start a network marketing business?
Yes, it is worth it, but only if you are ready to wait a long time for the result (from 6 months to 3 years) and have a cash reserve that will “feed” you in a cashless period. I also advise you to analyze your strengths and weak sides, objectively assessing their capabilities.
But if you get tired of communicating with people and have a hard time enduring rejection, then you better not rush into this pool with your head.
Question 2. How to earn the first money in network marketing?
To do this, find 2-3 customers and simply sell them your company's products, after registering as a partner in it.
Then you will feel the "taste" of the first money. Perhaps it will be a very small amount: from 100 to 1000 rubles, but it will already be your money earned in direct sales.
If you want to get a more serious amount, then find 3-5 people who plan to build a business with you. Help them find 3-5 more people for each and in a few weeks your income will grow to several thousand rubles a month and will increase as your "branch" grows.
Question 3. What and how can you attract people to network marketing today?
Today, you can attract people to network marketing, as always, with the idea of earning prospects, creating passive income and a free (flexible) work schedule.
The quality of products and the range of direct sales companies is constantly growing, so to say that we have high quality products is no longer so appropriate.
But if you show the convenience of working with the company's website and the possibility of doing business via the Internet, this will definitely impress your potential partners.
Question 4. How to distinguish network marketing from a pyramid scheme?
It's no secret that some scam companies tarnish the honor of decent MLM businesses and masquerade as them.
How to distinguish scammers? There are some characteristics dishonest companies:
Here they are:
- Unreasonably high entry fee. As a rule, it is from 100 to 5000 dollars. It is from this money that the remuneration to the “distributor” is paid.
- The product, as such, either does not exist at all, or has no market value outside of this organization.
- There is no documentary confirmation of the fact of receiving money and other relevant documents (invoice, contract, checks, etc.);
- You are told that you will receive money from number of attracted participants rather than from the turnover structure.
- The focus of the organization is on quick money , and the product (if it exists) is needed only as a cover for the activity of the pyramid.
If you notice at least one of them in the company where you are invited, you should thoroughly study it for fraud and the legality of doing business.
In our country, since the advent of network marketing on the market, many people do not understand how it works at all. They think that this is an activity for schoolgirls or mothers on maternity leave who simply have nothing to do. In this article, I want to dispel all your myths about network marketing and show the reality.
Today in our country there are quite a lot of companies that operate in the MLM market. And not all of these companies are promoting this business correctly. I cannot say why this is happening. Perhaps the wrong work is created by distributors.
When I hold meetings with networkers, I am often simply amazed at the rules in some network companies.
For example, the fact that you need to build the structure of only one branch. And then, when this branch grows, start building a second one. But in this way, partners begin to earn normal money only after a few years.
Or - you do not build a network yet and will not be able to receive money until you go to certain level by personal turnover.
Our hair stands on end from such rules in companies.
Let's understand what network marketing is. And for starters, let's turn to the all-knowing Wikipedia. And Wikipedia tells us that
Network marketing(or multilevel marketing; English multilevel marketing, MLM) is a concept for the sale of goods and services based on the creation of a network of independent distributors (sales agents), each of which, in addition to selling products, also has the right to attract partners with similar rights. At the same time, the income of each member of the network consists of commissions for the sale of products and additional remuneration (bonuses) depending on the volume of sales made by the sales agents involved.
Thus, we see that the network business is not shopping with company products and checkered bags. This is the creation of a network of partners and consumers, from whose purchases we receive our percentage.
Now imagine that you have built a team of ten people who can buy products for 20-30 thousand rubles. per month. Of course, the amount here is small and many people at this moment simply "merge" out of business because they don't see huge money at the very beginning. I hope you are not one of those people.
Now imagine that you did not merge, like most, at the first stage and built a structure of a thousand people! This number of people can actually buy products worth several million! This I know from personal experience.
Your check in this case will be from 100-200 thousand rubles a month! And if you do not run away from the business in the early stages, you will definitely have such a result.
Myths about network marketing
Only the top earns
Probably, if you yourself do not think so, you have heard such an objection. Yes, many people (even those who are engaged in network business) believe that only those who came at the very beginning earn money.
But I know dozens of examples when people came to companies five to ten years after the company was founded and blew up the business, starting to earn even more than those who had been working in the company for several years.
Indeed, in the network business, people receive from the turnover, and not from how many people managed to connect. And if you are able to create a team that will be able to create a large turnover in the country's market, or outside, then you will earn decent money.
This is a business for the poor
Oh, how long it takes to explain to people that network marketing is not income for the poor and that huge money is spinning in this business, which brings huge profits to partners of network companies.
Yes, I agree that completely different people come to MLM. And those who earn a lot and those who do not earn anything. And of course those who are poor are the majority. Well, because they are, in principle, the majority in our country. And so it seems that only the poor are here.
But I assure you that it is not. And there are a lot of people who have their traditional business with an income of half a million, and start their journey in network marketing, because they see great prospects for their development and replenishment of their wallet in it)
Therefore, before making a list of acquaintances and those people whom you want to invite to the team, do not decide for people whether they need a business or not. I talked about this in more detail.
Gotta convince people
I must say right away that if you are going to convince people in the network business, then this will definitely not lead you to success. Because everyone you once convinced, persuaded, hypnotized, will wake up and think to themselves: “Damn, what the hell did I do this at all, I’ve been lied to.” And they will never answer your phone again.
In the network business, our task is not to persuade people to join our team, but the task is to convey to a person the possibilities of a product that he can use and save, as well as the income that he can receive by recommending these products to people.
If you meet such an objection during your meetings, you just need to. After you answer it a couple of times, it will no longer drive you into a stupor.
Here to sell
This myth comes from a misconception about network marketing where people think it's just a direct selling business.
Yes, many retailers sell their products, but they do this either because they want to earn extra money, or because of the wrong company policy that forces them to buy products. Yes, there are such companies. Where is the obligatory personal commodity circulation for large sums and the quantity that a person cannot consume himself. We don't have that.
But direct selling is just a super bonus for people who are just getting into network marketing!
She just turned my brain around and made me look at the world differently. I started to think about my life and it was at that moment that we met with network marketing. Now I am very grateful that everything in my life happened on time.
I hope this book will help you as much as it helped me. When you read it, be sure to write me a message - whether it helped you or not.
Well, our result today will seem small for someone, for someone a dream, but I think that for people who came to the network without experience and in such a short period of time - very worthy.
This is an income in the region of 150,000 rubles. per month, car from the company, travel, own developing YouTube channel, a network of more than ten thousand people, recognition from the company, and more!
Would you like to see such a result in a year or two?
I will tell you 100% that when doing right action, you will definitely have it!
By the way, friends! If you are looking for a really good mentor in business who can lead you to any result, then I can recommend getting to know my wife Yanina Eremeeva. She is really a professional in the network business, the Top Leader of our company, and about 15 car bonuses have already been issued in the team. Including Mercedes.
In general, it can also lead you to any result! You can contact her here.
What is network marketing - a path to success or a mythical way to make money? Historical facts about MLM + pros and cons + TOP-5 companies in the Russian Federation.
What is network marketing?
Most people agree that these are some kind of fraudulent schemes that allow only happy few people to earn money.
Such thoughts are connected with the main problem of MLM - these are extremely high promises to customers.
Today, after reading the article, you will learn what the essence of network marketing operations is.
And, of course, you will get an answer to the question: is it possible to get real income using such a business scheme.
What is network marketing: historical background
Network marketing (MLM) in its current form was not a separate business development model. It appeared as a manifestation of the need to sell goods.
Who was the first to discover such a scheme and become the founder of a network business?
The founder of the first network sales scheme is Karl Rehnborg.
If the thought occurred to you that this person built his policy for decades before starting a business, this is not so.
All complex things began with a banal approach.
Carl Rehnborg grew alfalfa on his property. At that moment, an idea hit his bright head:
“But what if all the beneficial substances from alfalfa can be converted into an edible form for humans, so that its intake can increase the vitamin tone of the body?”
Undoubtedly, Karl had a good purpose.
Later, he opened his own line of healthy food and began to offer it to friends and work colleagues, explaining the usefulness of the new product.
It is interesting that, out of the kindness of his heart (no other reason can explain this), Karl distributed goods just like that, without demanding any money in return.
What do you think was the effect of promoting free useful products?
No. Nobody believed Carl. Everyone was very embarrassed that a person can simply give away a useful, worthwhile product.
Carl Rehnborg came to an unexpected conclusion: if a nutritional supplement is sold at an average market price and not just handing out to friends, demand will appear.
And hit right on the spot!
Karl began to use this business scheme, thus giving rise to one of the main postulates of MLM - mutual assistance and team support.
Rehnborg's friends started buying his merchandise. It no longer seemed to them that this was a cheap hoax for one simple reason - it ceased to be cheap.
Then Karl began to look for new ways to expand the network of buyers. And again came to the correct conclusion!
They consisted of a percentage of the sale of nutritional supplements. Now you know the scheme of work of a standard network company? That's how it all started.
The result of the work of Carl Rehnborg:
- 1934 - Carl founds California Vitamins, thereby expanding the range of products sold.
In 1934, Rehnborg renamed the company Nutrilite Products.
The principle of operation remains the same.
A whole network of distributors of products, the so-called partners, was formed.
Each partner attracted new employees by offering a percentage of product sales and dividends for quality organizational performance.
Karl Rehnborg is known throughout the world as the "father of the network business."
After a short historical sketch, it's time to turn to the realities of the modern MLM business.
What is modern network marketing: terms and definitions
Network marketing- this is one of the types of retail sales of products, based on the direct, direct interaction of sellers with consumers.
A feature of network marketing is the ability of each client to become an implementer.
It would be most correct to compare the network business with a multi-level dealership. MLM also consists of several levels.
No wonder such organizations are often called financial pyramids!
Let's take a look at the main components.
The first step of the pyramid: manufacturer - distributor
The first stage of activity under the MLM scheme is that the manufacturing company provides its products to a partner.A partner is a natural person who enters into a cooperation agreement with a supplier.
On the territory of the CIS this agreement is not included in the labor format, i.e. does not provide you social guarantees, has a special form of taxation.
The terms of the contract have similar clauses in any area of the network business:
- obligatory use of the manufacturer's products by the partner;
- attracting new partners to the organization;
- work according to a clear scheme defined by the organizers;
- unquestioning observance of the moral principles and policies of the company;
- minimum monthly sales.
Subject to the execution of each clause of the contract, according to MLM, you get access to unlimited earnings.
Second Stage: Second Tier Partners
From the second order, the whole essence of the scheme of MLM activity begins.Each partner who was invited by a higher-level participant (Stage 1) performs all the same functions as his curator.
The only difference is that part of the sales income remains in the pocket of the superior curator.
Each participant, as a result, seeks to form his own structure, as this brings real income in the form of dividends from his own sales and the activities of "subordinates".
P.S. The word "subordinates" is deliberately put in quotation marks: in the structure of network marketing there is no concept of line management.
All relationships between colleagues various levels are based on mutual assistance - it is simply beneficial for all partners.
Step Three: Entry Level Partners
Lower-level partners differ from the founders only in that they have a lower income. Wherein functional responsibilities, as units of MLM, are unchanged.
Work at the first or second level involves the manifestation of maximum activity not in the sale of products, but in the promotion and formation of one's own structure.
An intermediate conclusion should be drawn:
The scheme of interaction of network sales involves the development of the structures of each employee.
The explanation of this process is very simple - each subsequent implementer receives a percentage of sales + dividends from the entire network organized by him, as a percentage of the profits of "new" participants.
Network marketing - is it that simple?
The concept of network business and MLM structures has negative associations, especially in the CIS, where people have been taught by the bitter experience of financial pyramids.This section provides the reader with a comprehensive overview of how network marketing works - an unbiased assessment of the income opportunity.
Benefits of network marketing
Lack of a linear system of leadership.
You work for yourself, which is very similar to entrepreneurship.
Close-knit team.
Each partner is interested in supporting "junior colleagues", as it brings him financial benefits.
There will always be a person who will help organize your network activities in the right direction.
Curating is the backbone of network business.
Opportunity for continuous growth.
Another positive aspect of MLM.
It all depends on your abilities, including earnings.
A lot of experience in interacting with people.
This is a useful skill for everyday life and the development of your own entrepreneurial project.
Network business can be considered as a platform for further implementation of one's own business.
Flexible schedule.
Representatives of MLM structures can work from 10 to 30 hours a week, thereby combining it with work or study.
You must understand that network business cannot replace the main source of income.
At least in the early stages of activity.
Negative aspects of network marketing
Possible destabilization of the network structure at any time.
This process may be triggered by the activities of individual partners, which will not meet the company's standards.
You must consider the possibility of the collapse of the entire structure, as many years of experience of MLM participants proves such a possibility.
Undefined payment standards.
An example is the American company Starcom, whose representatives promised high payouts to each participant.
As a result, partners took out loans, pledged property, and the company paid less than 25% of the announced amount.
It's not hard to guess what material damage clients received.
Opportunity to get into the financial pyramid.
Imagine a situation in which you invested in an MLM structure by purchasing an initial package of products.
Several months pass, the structure of clients expands, they also make deposits, buy products.
Another month passes, you have not yet been able to cover even your own expenses, since the goods are not in demand.
The company is closing...
In this situation, approximately 50% of the participants remain without profit.
They were unable to sell the product, but made a significant investment.
If you have never dealt with entrepreneurship, it will be very difficult to “resist” in the MLM mode of operation.
The specificity of the activity lies in the constant moral tension, since you are responsible for your sales and the entire organized structure.
After analyzing the pros and cons of network marketing, you can assess the degree of risk of such a business activity as quite high.
A feature of working on a network scheme is the constant responsibility for one's work + training and control of lower-level partners.
You already know what network marketing is and you can independently assess the prospects for development in this direction.
If you are confident in your organizational talent, as well as the abilities of a manager and financier, it's time to move on to choosing an employer.
Network Marketing: Choosing an Employer
From right choice employer depends on your network income and confidence in the stability.To begin with, you need to consider possible options business space in Russia.
Top 5 Russian MLM market
| Network company name | MLM market share (%) | Description of activity |
|---|---|---|
 | ~30 | Sale of cosmetics, price policy- Acceptable for the middle class. Get ready to face the huge women's team and find your place in it. Network activities in AVON are more suitable for girls. |
 | ~30 | Marketing sphere - cosmetics, souvenirs, healthy food. One of the leaders of the Swedish MLM market. The advantages include increased loyalty to their employees. Working in this network company will allow you to have a small but stable income. |
 | 8 | Stability is the most appropriate word to describe the activities of AMVAY. Marketing sphere - from household utensils to dietary supplements. Unlike the companies mentioned above, it provides equal chances for development, regardless of the gender of the employee. This fact is derived from the wide range of products on offer. |
 | 5 | A company that only accepts women. Specialization - cosmetics, products for the care of appearance. One of the most experienced network organizations, but still not widely spread on the Russian market. |
 | 4.5 | Leading manufacturer of natural cosmetics. It is one of the most progressive companies on the Russian market, it has a strong base for network marketing. |
The main criterion for choosing an MLM company is experience in the market. This is explained very simply: you will get the expected result, verified by others.
It is dangerous to work for the "newbies" of the MLM market, because you cannot be 100% sure that all obligations are true.
You can learn about the many benefits of network marketing from the video:
What is network marketing? After reading the article, you are already able to independently determine the meaning of this term.
Network marketing evokes a subjective attitude in every reader.
With 100% certainty, only one thing can be said - making money working in the MLM system is possible and cannot be argued with.
A completely different question - will it be possible for you to do this?
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Gennady Gorbachev
We present to your attention a list of the best Russian and foreign companies working under the scheme of network marketing and business. Some of the latter are not present in Russia, but perhaps it is you who can become the first distributor or reseller under the "banner" of a strong brand.
The products of the presented companies are diverse, but to a greater extent the assortment is represented by healthy nutrition, skin care and perfume. Look at our selection!
1.OMEGAVIT
The company's product range includes: natural edible oils, energy products, cryopowders, juice drinks, cereals, probiotics, kelp, biodegradable eco-friendly detergents and more.
Website: omegavit.ru
2 Nu Skin
For more than two decades, NU SKIN has been actively developing products that support the health and longevity of skin and hair and help millions of people around the world find their way to a better future.
Website: www.nuskin.com
3. Oriflame
Products for makeup, hair, body, weight management, as well as perfumes and much more.
Site: oriflame.ru
4 Belcorp
Network company of beauty goods from Peru. Her brands are Ésika, L'bel and Cyzone. Belcorp's top priorities are the well-being and safety of our consumers and not killing animals to create products.
Website: www.belcorp.biz
5. New era
Chinese company New Era exists since 1995, producing products for health. The company has technologies for separating pine pollen from the shell and purifying the source material from impurities with cold air.
Site: company-newera.ru
6. Jeunesse
Jeunesse, a UK-based chain company, engages distributors to sell health food and cosmetics.
Website: jeunesseglobal-russia.ru
7. Young Living
An American company co-led by married couple Gary and Mary. Now they have become world leaders in the industry essential oils and solutions for well-being and health.
Website: youngliving.com
8.Usana
Foreign company selling pharmaceutical products - for the heart, bones and tendons, immunity, brain and nerves, vision, vital energy and other bodily functions.
Website: www.usana.com
9. Isagenix
Isagenix founder John Anderson has dedicated his life to creating life-changing health and wellness products, and his formulas have been requested by companies worldwide.
Website: isagenix.com
10.DXN
The production of the company, established in 1993 in China, is based on the use of the medicinal herb Ganoderma for the health and well-being of people.
Website: dxn2u.com
11 Beachbody LLC
The company is the creator of what they claim is America's most popular fitness and weight loss solution. Carl Daikeler and Jon Congdon founded their firm in 1998.
Website: beachbody.com
12 World Ventures
A direct selling lifestyle company. She sells travel-related services. DreamTrips members have a variety of membership options to suit your lifestyle and budget. In all options, you get access to unique trips, at prices available only to DreamTrips™ members at exclusive rates.
Website: worldventures.com/ru-ru/
13. Yandi
Was founded in 2005. It continues the centuries-old tradition of Chinese health medicine culture. Its products are dietary supplements; appliances; Vauch cosmetics - creams, serums, masks; household goods and health drinks.
Website: ydhn.ru
14. Nerium
German MLM company producing skin care creams.
Website: nerium.com
15. Arbonne
The idea of the company to provide skin care products that are unmatched in quality and effectiveness was developed in Switzerland in 1975. Now she produces products for make-up and body care, skin and hair.
Website: arbonne.com
16. Forbes Lux Group
The company improves the quality of life for people around the world through innovative solutions for clean air, healthy water and a clean indoor environment.
Website: luxinternational.com
17. Rolmex
Chinese MLM. The product matrix is as follows:
- health products,
- skin care series
- daily essentials,
- detergents.
Website: rolmex.com.cn
18. Omnilife
mexican tiered marketing company, which distributes nutritional supplements, unique products for health, beauty and care for the world around.
Site: myomnilife.ru
19. YOFOTO
The Chinese company Yofoto has been working in the health industry since 2004. It strives to gain recognition in the international market by selling the following categories of products: soft drinks, vitamins, personal care products and home products.
Website: yftrus.ru
20. PM International
The network company develops and sells unique, high-quality complementary foods and cosmetics.
Website: pm-international.com
21. Naturally Plus
The Japanese company is committed to consumer well-being by providing health and skin care products that meet high safety and quality standards.
Website: naturally-plus.com
22. Amway
The company is engaged in the production and sale of household chemicals, cosmetics, personal care products, biologically active additives to food and other goods for home care and appearance.
Website: amway.ru
23. Avon
The company supplies mainly cosmetics, perfume and clothing. At the same time, even a gadget is present in the full range. During the 130 years of Avon's presence on the market, about 6 million representatives worldwide have been engaged in sales of these products.
Website: my.avon.ru
24. Herbalife
International corporation operating in the industry healthy lifestyle life. Since 1980, the company has been developing and marketing products for balanced nutrition, weight management and personal care through direct sales.
Website: herbalife.ru
25. Vorwerk
Vacuum cleaners Vorwerk - German quality and unsurpassed design at an affordable price. Accessories and expendable materials Vorwerk.
Website: vorwerkrussia.ru
26. Infinitus
Infinitius is engaged in the development of health care products based on Chinese herbal medicine, the development of health care products, the production, sales and service of a large number of partners.
Website: infinitus-int.com
27. Mary Kay
The founder in 1963 decided to create a cosmetics company based on the principles of network marketing in order to give women the opportunity to build their own beautiful business and gain independence. Now it is about 3 million sales consultants.
Site: marykay.ru
28.NL International
Most trendy Russian company to date. Many who are present on Instagram know the product of a balanced diet ENERGY DIET.
Website: www.nlstar.com
29. Zepter
The Austrian company Zepter dates back to 1986. The main activity is the production of high-quality kitchen utensils, watches, household appliances, medical equipment and cosmetics.
Site: zepter.ru
30. Biosea
French network company present on the Russian market since 2013. Product line companies are products for hair, body, and oral care. She also specializes in beauty products, perfumes and baby hygiene.
Website: biosea.fr/ru
31. Farmasi
Turkish network of make-up products, body and hair care products. She appeared in Russia in 2010 and continues to gain popularity.
Website: farmasi.ru
32. Forever Living Products
The company is a member of the Direct Selling Association. It produces facials, weight management, energy drinks, and honey and aloe nutrition.
Website: foreverliving.com
33. Kyani
The company was founded in 2005. The range is presented natural juices and vitamin complexes, including noni juice. The manufacture of goods and the cultivation of ingredients takes place in Alaska.
Website: kyani.com/ru-ru/
34. Coral Club
The company's vision is to support health, beauty, cleanliness in the home and strengthen people's intention to change lives for the better.
Website: ru.coral-club.com
35. Perfect Organics
The Russian company sells tasty, healthy foods and drinks, cosmetics, household goods and detergents.
Site: orgmlm.ru
36. Nature`s Sunshine Products
The company's products: dietary supplements, natural cosmetics, personal care products and others. In total, NSP produces more than 600 products certified in more than 60 countries around the world. In the Russian Federation, it is included in the Federal Health Directory of Russia.
Website: naturessunshine.com
37. Tupperware
Tupperware is a world-famous manufacturer of exclusive high-quality tableware for the home and kitchen. Tupperware products dramatically improve people's lives through the sustainable use of resources and innovative technologies helping to make nutrition healthy.
Website: tupperware.com
38.Ciel
Russian perfumery and cosmetics company of direct sales CIEL. Inspired by France, founder Elena Sokolova decided to create her own perfume company in 2002.
Website: ciel.ru
39 Faberlic
Russian MLM company. Patented a unique oxygen cosmetics, which are injected into the deep layers of the skin. The range also includes a range of products for skin and hair care, perfumery.
Website: www.faberlic.com
40. BIOMEDI
The devices of the research and production company are designed to maintain health and rejuvenate the body through the effects of electromagnetic waves with internal organs organism.
Website: biomedis.life
41. DENAS MS
The company was founded in Yekaterinburg. The main activity is aimed at the production of electronic devices for maintaining health and beauty. Products have international certification ISO9000.
Website: master-denas.ru
42. Siberian Wellness
More than 20 years ago, the company entered the market with a bold idea: to create health and beauty products and cosmetics based on wild Siberian plants.
Website: ru.siberianhealth.com
43. Vertera
The company has its own scientific laboratory for the development of dietary products, a powerful industrial base, which brings together scientists and specialists from all over the world, its own e-commerce store and information support center.