What is MLM business: is it worth doing network marketing. What is mlm business

Why did I choose the cautionary title for the article? Because, unfortunately, recently I have come across deplorable stories of people working in network companies and having the same deplorable results of this very “work”.

Network marketing (or multi-level 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 marketing agents involved.
Network marketing originated in the 1940s. The dawn of the network companies industry came in the 80s and 90s. One of the pioneers of the industry was the notorious American Way Corporation (Amway).

Myth #1. Network marketing is my business.

Do you seriously think that this business is yours? What if you think well? Thought? Not! Network marketing in 99.999% of cases is not your business. Network marketing is only a business for the (very smart and enterprising) people who started it. Dot. This is the business of those people who speak to you at the company's seminars once a year and deliver motivating and "grand" speeches from the stage.

What is the problem here? And the problem is that those newcomers who come to the network company from the very beginning are “explained” that he will be engaged in BUSINESS. Yes it is. But not all newcomers clearly understand whose business they will be engaged in. Understand that a business is only yours if you have the authority to make key decisions about running it. Can you make such decisions in "your" network company? Can you change the price of products? Can you change the assortment and suppliers? No. You are only RESELLING the products yourself or through the attracted new sales agents. You are forced to obey and comply with all the conditions and rules of doing business, which are dictated to you by its founders. Even if you have registered a business or a company and sell the products of "your" network company, you have very limited freedom of action, unlike a full-fledged entrepreneur.

Understand that if you work for a network company, then this is NOT your business. In this case, your activity can only be called an alternative to working “for an uncle” and self-employment, but by no means a full-fledged business, in the true economic sense of the word.

Myth #2. There is a lot of money in network marketing and you can get rich quick there.

Of course the most the best option- it is certainly to try and look at the result. But, as long-term practice shows, there is NO big money in network marketing. Sometimes there is no money at all, let alone a lot. How so, after all, network companies make billions in profits? Yes, they do. The founders and those who head these companies and are personally close to the management receive. Ordinary mortal distributors are content with small checks to barely make ends meet. You can object, they say, you can become a leader! You're right. You can also fly into space. The whole question is who will not "vomit" on the way to this space, who will not lose consciousness and how long to fly to this "space". And in general, do you need this space?

All that an employee of a network company does is to search for those who would sell more and those who would sell more and who would be looking for the same thing.

Network marketing people (forgive me) are just middlemen. Just INTERMEDIATES. Of course, intermediaries can sometimes make good money, but the main profit is received by the owner.

There is no big money for an ordinary distributor in network marketing, they simply do not exist there. All the golden mountains that your "mentors" and leaders draw for you are a farce and pure motivation with profanity. Getting rich in network marketing is very difficult. I will not say that no one has made a fortune selling detergents, toothpastes or super horseradish cutters, but the pictures that you are drawn are radically and dramatically different from the harsh reality.

Think of network marketing as an alternative to a regular job (and then carefully), as an additional source of income, but not as an easy and short path to wealth. I repeat, of course, there are people who, being distributors, have become leaders and made a fortune for themselves. But these are tough, unceremonious people with pronounced leadership qualities, these are people who have gone through fire, water and copper pipes in this matter, putting a good part of his life on it. Such "lucky ones" are one in a million distributors. Do you want to try your luck? That's your business.

Myth #3. My mentor is my friend, he will help me in everything, teach me everything and explain everything.

Hell no! Someone who is your mentor is definitely not your friend. Friends do not strain each other from month to month, constantly reminding that it would be necessary to qualify this month and buy three and a half more super horseradish cutters for the future, they say, they may be needed. Friends do not receive material benefits from friends, at least good and true ones.

Your mentor is the one who is most interested in your success, eloquent people told you in seminars and meetings, he will teach and guide you. So it is, but what is the problem in this situation? And the problem is that the wards begin, under the yoke of their “beloved” mentor (who, by the way, should have been sent to a dense forest for a long time) to do things that contradict the actions of a person in a bright mind and good health. Such wards begin to take loans, get into hopeless and hopeless debts, begin to make decisions that are not their own and not their own brain. This often leads to very backfire, which have to be sorted out by the wards themselves, already without the “help” of mentors and leaders.

In general, in our life we ​​are under the constant influence of other people, whether we like it or not, and very often there is no awareness in our actions and decisions. In network marketing, dependent distributors, listening to the motivation of a mentor and looking at his painted pictures of mountains of gold, lead their lives downhill (in a very bad case) without knowing it. This is sad.

Your mentor can be a good person and he can really be your friend, but this is in very rare exceptions and only if he is not very interested in your results in the network company, respectively, as well as his own. Understand that the boss will never have a true and sincere friendship with his subordinates - this is nonsense and it is contrary to business.

Mentors, seminars, educational and entertainment collective events in network marketing - their actions are mostly aimed at brainwashing, retaining distributors in the company and increasing the profits of the company. They wanted to spit on you, on your life and on your problems. Remember this. The first leaders of the company will never share with you the intimate knowledge they have, as they are not interested in your growth to their level. They give you exactly the information and knowledge that you need to increase sales, nothing more. They are not interested in your true growth and unleashing your potential.

Let's sum up.

Of course, there are many positive aspects in network marketing. Working in network companies, a person learns a lot, goes through an excellent school of sales techniques and learns a lot of interesting things. In the process of work, he can radically (perhaps for the better) change his lifestyle, can start traveling if he has not traveled before, communicate with interesting and successful people, can open itself with new side and so on. There are definitely advantages. But there is no need to rely on MLM companies as if this is the only occupation worthy of you, that this is a gold mine and some unknown Klondike.

I repeat, you can consider working in a network company as a means and starting point for revealing your potential, as a school of sales, a school of communication and interaction with people. But those myths that you read above should not be forgotten. As one says good man and coach Ildar Zinurov: “There is no happiness in the network business.”

Yes, in network marketing you can earn money for a living, you can study, you can travel, working as a distributor, but the happiness that you are told about at the first and subsequent presentations is definitely not there.

We often take wishful thinking. You need to look at the results and draw conclusions. You need to use such a precious tool of yours as thinking. Use it! Think with your head. Trust the facts and results, not the words and pictures of your mentors and leaders. If nothing has changed for you for several (or even decades) years, then it is not prudent to believe that doing the same thing further (for example, plowing in a network company) something will change for you and you will start rowing money with a shovel. Don't start.

P.S. Who am I to talk like this about working in network companies?

I am directly related to work in network companies. I had the good fortune to work as a distributor of Chinese goods, and not in the simple version- with a bag at the ready, wandering around the organizations. Handled cold sales. I consider it the most aggressive and difficult form of network marketing. I had a sales system, as in all similar companies, I had a mentor (and not one), there was a bunch of “washes” of my then virgin brain, and so on. I went through it all and realized (pretty early, thankfully) that this was NOT my business, that the mentors were NOT friends, and that things were NOT as sweet as they told me. Plus, I have many friends and relatives who are involved in network marketing in one way or another (some for more than 10 years). So I more than know what I'm talking about.

Dear friend, greetings. Rinat Admiralov is in touch, an entrepreneur and network marketing expert with 8 years of experience in this industry. During this time, he earned good money in MLM, bought a foreign car and seven apartments.

He came to develop business in Stavropol from St. Petersburg. In my life I am fond of guitar, reading books, personal development, social activities, like to lead a healthy lifestyle.

The MLM industry has long been a source of controversy and controversy. I myself had a negative idea about this activity, until I understood this issue in detail. How many people, so many opinions. Some people consider this direction illegal and “equate” it to a financial pyramid, while others believe that this is a brilliant invention of mankind.

I will share with you my economic view and critical thinking on this issue and practical experience, I hope to be useful.

We will analyze what multi-level marketing is, whether it is worth doing it and how much you can earn.

Entrepreneur and expert in MLM industry Rinat Admiralov shared information about the network business on the pages of the online business magazine "PAPA HELP"

What is network marketing (MLM) and how does it differ from “classic”

The "standard" definition goes something like this:

Network marketing(multilevel marketing) is a way of promoting a product to the market, in which a company (manufacturer) sells products directly to its consumers, and distributors (partners of the company) receive a percentage of the turnover of customers attracted by them.

This line of business was originally based on the idea of ​​recommendations. That is, a satisfied consumer of the network company's products recommends it to his friends, acquaintances and relatives, while earning money.

Every day, without hesitation, we recommend someone (something) to someone: a lawyer, a dentist, shampoo, tourist agency, restaurant or movie.

But the trouble is that no one pays us money for this, even if, thanks to our recommendation, a deal was made and someone made good money on it.

So, the idea behind building a network marketing business is referrals.

Everyone treats MLM in their own way and that's okay.

For me MLM is micro a franchise that has a number of advantages over a "regular" franchise.

Franchise in business is the right to work under the brand name of a well-known company, using its image, technologies and products.

However, for such "patronage" of a large partner, you will have to pay well.

The first thing you have to spend money on when starting to work on a “classic” franchise is lump sum . This is a one-time payment for using the brand of a partner company, its developments and products.

Second - royalty. This is a certain percentage of the turnover that you would pay to the company that granted you the right to work with it under the franchising scheme. However, for most well-known companies, the size of the lump-sum contribution is measured hundreds of thousands and even millions of rubles.

What does this mean for you as an aspiring entrepreneur who wants to start a risk-free business?

And that means only one thing: you must have a solid start-up capital to work under a well-known brand. As soon as you start receiving the first income (not even profit), please give another percentage of the money received (royalties).

As you can see, the classic franchising scheme is suitable for either experienced entrepreneurs or people with a solid initial capital.

Of course, there are franchises on the market with very loyal conditions. Therefore, when choosing a franchise partner, it is very important to study the parent company - what they earn on. Often there are unscrupulous sellers who have the main income from the sale of the franchises themselves.

Here's a hack for you. The first criterion that you should pay attention to before delving into the study of the proposal is how much the company has own points in the common network.

If less than 50%, then it is worth considering, because with the successful construction of a business, incomes are constantly reinvested and develop their network.

If this topic is of interest, I will write more detailed overview– how to quickly identify worthy offers on the market without economic education and experience in business, which should be considered in more depth. Let me know about it in the comments to the article.

Why for me network marketing is exactly a “micro” franchise. Because its advantages as a classic franchise remain, and many of its shortcomings “fall away”.

In the table below, I compared the conditions of the "classic" franchise and network marketing:

Comparison criterion	Franchise classic	Network Marketing (micro-franchise)
The right to work under a well-known brand	Yes	Yes
The company provides training and development to its partners	Yes	Yes
Product quality	High (due to standards)	High (due to direct deliveries)
Payment of the lump sum	Yes (almost always)	Not
Royalty payment	Yes (almost always)	Not
Financial risks	Essential	Minor
Growth potential	High	High
Geographic mobility	Low (most businesses are tied to a material point of sale)	High (business can be done in any city and via the Internet)

Network marketing can be thought of as symbiosis of a major player in the small business market.

Where the partner-investor (network company) took over all operational activities and financial risks, and the partner from a small business (distributor) only needs to work on creating a client base.

In any business, it is necessary to create a client base, while all the risks and the "OS" that everyone wants to get rid of remain. A microfranchise solves this problem in favor of small businesses.

It is very difficult for small businesses to compete with large ones, but becoming a partner of a major player in the market is already interesting.

Classical promotion, as a rule, involves the promotion of goods different ways, including through intermediaries using advertising in the media and the Internet.

For a novice entrepreneur, such a promotion strategy is more expensive, which is why financial risks are higher here.

For me, classic product promotion and mlm promotion are all business systems with their own advantages and disadvantages.

Pros and Cons of Network Marketing for Consumer and Distributor

Consumer- this is the one who directly uses the product of the network company.

Network marketing, like any phenomenon (industry), has its pros and cons. Here we will consider them from the point of view of the consumer and the distributor. Let's start with the consumer of the product.

Benefits for the consumer (+):

1. No fakes. Orders come from the client to the company directly, it sends the goods to the points of issue, bypassing intermediaries. The probability of fakes in this case tends to zero, in contrast to the usual retail (where the share of counterfeit and fakes can reach up to 90%).
2. Personal consultant. The income of a network company consultant directly depends on his turnover. The turnover depends on regular and satisfied customers. Therefore, the task of a consultant is to be client-oriented and not just sell a product, but provide a solution for his clients, giving more value than the buyer paid. In most large MLM companies, consultants are competent people with an active lifestyle and a high level of responsibility.
3. Free shipping. In whatever country or city you order the goods, if there is an official point of issue of the network company, delivery for you will be free or minimal.
4. 100% product return. Today, competition in all segments of standard products is very serious and any manufacturer strives to win in the struggle for the consumer. Large companies, and not only network ones, offer a guarantee for the return of the product in case of dissatisfaction with its quality, packaging, and so on. When returning products, the company gives 100% of the payment for it.

Cons for the consumer (-):

1. Consultant misbehavior. The human factor has not been canceled. Since there are no strict requirements for a candidate when “getting a job” in network marketing, from time to time there are non-professionals here, spoiling the reputation of the whole industry with their incompetent advice and actions. Perhaps this is the only negative if the company itself and its product are really good.

Now about the pros and cons for a distributor (partner of an MLM company).

Benefits for the distributor (+):

1. Accompanying the mentor to the result. With a mentor you are in the same boat, here the joint labor activity where the mentor is financially interested in teaching you. His task is to transfer all his skills and knowledge, and yours is to accept them and put them into practice on your own, so he cannot do it for you. Thus, you get a playing coach as a mentor. There is such a concept in football. He is a practical mentor with you on the field, who does and continues to do what you are just about to do. Acting according to the system of a mentor, you achieve results with him.
2. Creation of a team of like-minded people. Constant growth and development, communication in the circle of "ours" contributes to the awakening of hidden talents and the potential of future and current "networkers". Financial results as the main benchmark in network marketing help each team member become more efficient and financially literate. For example, we with "colleagues in the shop" from time to time play the game Roberta Kiyosaki " Cash flow» (financial simulator real life), we go together to nature, play sports. Also, almost every network company regularly holds meetings with TOP leaders, famous people from different areas, trainings on sales and team building.
3. Generate serious income from your business system. There is an opinion that network marketing is a part-time job, additional income, or in general, something that cannot be earned. According to my observations, the average resident of our country with a salary of 30,000 rubles believes that young girls or grandmothers go to MLM to earn 5,000-10,000 rubles as an addition to a pension or scholarship. People do not even imagine that there are dollar millionaires in this industry and these are not the owners of network marketing companies, but the same distributors. The scale of their teams is amazing. Some of them have built a network of thousands of successful followers and tens of thousands of loyal customers. As you understand, with such a scale, the income of these people is estimated at millions of rubles a month. They went to this for 8-10-15 years, and got such results.
4. Access to wholesale prices. The client of the company, buying goods from a distributor, overpays on average by 25-30%. It is logical to assume that it is much more profitable to register as a VIP client of a company on the basis of a recommendation, even if you do not plan to build a business, but simply take goods for your own consumption.
5. The opportunity to travel at the expense of the company, receive valuable bonuses and gifts. Motivation of partners is essential for a network company. Therefore, the company gives travel vouchers as bonuses to especially productive partners, allows you to buy a car on preferential terms, or is generally given free of charge when the distributor reaches a certain level.

Paris. I'm going to the famous Disneyland

Cons for the distributor (-):

1. Illiterate business development leads to a misunderstanding of others. Surely each of you at least once in your life has encountered inadequate or too intrusive “networkers”. They are obsessed with becoming millionaires, proving to everyone that network marketing is the only way to start their own business. successful business especially if you don't have start-up capital. If you are skeptical about their ideas, then you immediately become the object of ridicule and condemnation from the "gurus" of the mlm business. Most often, this problem occurs for beginners and those who do not deeply understand the essence of their business. As a consequence, due to non-professionals, very diverse performances are created. However, for the pros of the MLM business, this is not a hindrance, but even a plus, since when people get to a mentor, they have something to compare with.

How to make money in network marketing - sharing my own 8-year business experience in MLM

Many of you have heard that there are royalties for musical and literary works. That is, once you have written a book, from each copy sold you will receive a part of its value as a royalties. The same when you rent or perform your song, you will receive money.

It is called residual income when for once you have invested intellectual work, you can receive money for life.

Unlike the rest passive income comes for money once invested.

I was very inspired by the idea of ​​generating residual income and began to look for ways to earn it without having the talent of a writer or musician.

Network marketing allows you to create the same residual income thanks to your intellectual work for the created turnover, through building a permanent loyal customer base for the company.

In MLM, residual income can be called marketing. That is, by building a system for marketing the company's products, you create a "marketing machine" that operates 24 hours a day, 7 days a week. The company provides you with all statistics and reporting and pays a percentage of remuneration for the actual purchases made according to the marketing plan.

With royalties, everything is great, and to some extent the process of making a profit is similar there and there. For once invested work you get money. However, the trick is that a book written once brings income only from itself.

Now just imagine: the book you wrote is writing a new book, and you get paid your royalties for this new book written by your book.

If you pass this idea through yourself, you will not be able to sleep peacefully at first until you start implementing it.

This is the business of teachers. Here the skill of learning to learn is valued and rewarded. In other words, this principle is called "coach of coaches".

A trained student teaches other students. He writes his book and creates his own copyright. And you get paid your new royalties for the previously completed work of teaching to teach.

In network marketing, this is reality. Only here instead of books there are people. Once trained, a person builds his own structure and from the turnover of such structures you receive dividends for your work.

It turns out that in mlm a book can write a book several times. For example, in a company with which I cooperate, the marketing plan involves payments from 6 levels "in depth".

After developing my structure for five and a half years, I decided to check what residual income is. will I be paid for the work I once did if I go on vacation for an indefinite period. I did not know then that my vacation would last two and a half years.

The first year I started living in light mode, in the second year I moved to Moscow from Stavropol and devoted this time to learning different areas: scientific, educational, social, cultural and entertainment.

He attended lectures on neurosurgery, bordering on nanotechnology, by the best professors of our country and the world, met with leading scientists from the Institute of Nutrition of the Russian Academy of Medical Sciences. During this time, there were many more interesting things. I just lived and developed myself without worrying about financial income, since the residual income guaranteed me a comfortable standard of living for this time.

But what about income? - you ask. Surprisingly, it was at this point that I really felt the beauty of my residual income.

He kept coming and helped me invest many months into my personality. This opened up new horizons for me.

The cool thing about this business is that it not only gives you the opportunity to make money and create residual income, but it also provides emotional fulfillment.

Since I am developing a business, money is also important to me, but even more important is the benefit that I bring by doing this activity.

When I first started, I learned everything from my mentors to the last detail, asked thousands of questions, was very corrosive and meticulous.

Fortunately, my mentors turned out to be real professionals and carefully answered all my questions.

In the end, I realized that THREE factors are important for success in network marketing:

1. Product demand. The product that the company sells should be clear and non-specific. They are also called consumer goods (wide demand).
2. Repeat customer referral. Sales frequency is a very important factor. For example, people buy a car once every few years, while food and hygiene products are stable monthly purchases and daily consumption.
3. A classic marketing plan with a clear payout percentage. Absolute clarity is the key to long-term partnerships. A company that has been on the market for a long time, honestly and consistently paying commissions is the best choice for those who want to build a career in the mlm industry.

Think in numbers how much you need to train partners and at what turnover how much you will earn.

Based on this, it will be easy to determine your reference points, to understand where you are now and where you will come in the future.

At the end of this paragraph, I would like to wish you to find your own unique path and move along it, build on your strengths. Take the best from your mentor and tailor it for you.

Business in mlm is not only money, but also a lifestyle. It gives freedom, development and, of course, a good income.

Below we will talk about specific actions. They will help you succeed in this industry.

How to become a top networker in your region - step by step instructions

Here I share a working instruction of 5 simple steps. Just take it and implement!

A good attitude is half the success in any endeavor!

Step 1. Set the right financial goal, limited in time

Also called anchor points. There should be three.

For example: 100 000 rubles , 300 000 rubles and 1,000,000 rubles .

Also be sure to set a deadline for each of the 3 financial goals.

Let's say 100 000 rubles you want to earn in a year, 300 000 rubles- in 3 years, and you plan to reach a million rubles a month in 7 years.

Why is it important to set exactly 3 reference points?

Look, when you are just starting your “career” in network marketing, you don’t earn anything, but after a month or two your net profit will be 5,000-10,000 rubles with due effort.

Let's assume that you have your first income and in order to move on without losing motivation, you need the next financial goal.

Persistent people quickly come to income here 30,000 — 50,000 rubles ($500) per month, but there is a great temptation to stop there and continue to work "relaxed".

And here your plan says: “buddy, you see you have an obligatory goal ahead of you - 100 000 rubles «.

With some effort and 100 000 - not such a fantastic amount, but it is already enough money for most people to live comfortably. This is the number that most really successful distributors get stuck on.

When you have two more solid numbers ahead, you don’t focus so much on the already achieved financial goal (100,000 rubles).

Once you start earning 300 000 rubles per month, you should not relax either, because the treasured million is ahead. At this stage, you can put the next digit in 1.5-2 million rubles per month.

That is, your financial goal should be at least 2 steps higher than the current results in order not to stop.

Step 2: Find an experienced mentor (training)

Choosing a mentor is very important.

Learn from someone who has already done it!

Now there are a lot of business coaches around who are ready to teach you anything, as long as you pay them your money.

Do not confuse a mentor with an adviser. The adviser thinks that it should be so, the mentor has done what you are just about to do.

Don't take my word for it, ask your potential mentor to show their results in earning income in this particular area of ​​activity from a specific company and for specific actions (bank statements from a current account from a specific company for the period with the purpose of payment).

Neither cars nor real estate are evidence of high incomes in mlm, as they could be acquired through other sources of income.

Step 3: Get your focus points right

What you focus on is what you get the fastest.

You should have THREE focus points:

Point 1. Network. It should be based on technology, according to which you answer 5 questions to your future partner. I list them below and briefly answer each.

1. What is the meaning of this business? The point of an mlm business is to create a group turnover and receive a percentage as a reward.
2. Where does the money come from? The money is already included in the cost of the goods. Due to the fact that the developer, manufacturer, logistician and seller automatically reduce all costs for each stage separately. Thanks to this, the company has super profits, which are directed to the development of the quality of goods and the expansion of the range. And for the buyer the most favorable price. It is also beneficial for the partner of the company, who receives his remuneration from the created turnover.
3. What to do? Assemble a team, teach them personal consumption and the formation of their teams. You become a mentor for your wards and, if possible, develop in them leadership skills. So people will be drawn to them, and your own success directly depends on the success of your partners.
4. Who will help? Any athlete or outstanding personality has mentors. And a mentor will help you build your business. It is also called an information sponsor. He guides you on the right path, gives you working technology, and for the first time, under his guidance, you will hold meetings with potential partners of your structure.
5. What will be the result of the activity? If you do everything correctly and professionally, your material and other dreams will be realized. This will happen as a result of residual income. Sometimes it is called passive, but I separate these two concepts. Passive income (financial passive income) arises from the initially invested large MONEY (deposit in a bank) or property (renting an apartment). residual income (marketing income) arises for once invested LABOR. Once you invite consumers to your structure (network), you will create a flow of regular customers and will receive income from their turnover.

Point 2. System.

The system in the network business is a constant and ongoing action. It consists of three important components, I also call them “Tamara and I go as a couple”:

1. Invitation and meeting. Conducted according to the technology provided by the mentor. It is understood that you must have a unique selling business idea and a presentation that can be easily repeated (duplicated).
2. Personal consumption and trailer*. Personal consumption allows you to benefit from the product and this same purchase is included in your turnover. necessary to create turnover and own awareness of the products offered. The trailer is loyal customers who do not register with the company, but ask you to make purchases for their use in your name (personal account). You can also purchase the products presented in the catalog as gifts for birthdays and other holidays. A very convenient solution to this problem.
3. Training and support. Training is an important part of any business or professional process. MLM is no exception. Being engaged in self-education, raising your own level in different areas, you will have something to pass on to your team. I know from experience that people who have recently entered the business leave it in the first days or weeks. This happens because they do not see a real interest in them from their mentor. Hold developmental meetings, business games with your team, organize a club of entrepreneurs. In a word, you must show by your example that you are a worthy leader, whom you can and should follow.

If you like your mentor's system, you can use it as a basis for your own work.

Point 3. Team

A team is a group of people united by one goal! This goal inspires every member of the team.

The principle of "One for all and all for one" also works well in MLM.

The main rule here is that the result of each fruitfully influences the result of each.

At the first stage, invite everyone to the business, without dividing people into “promising” and “not very promising”. You don't know for 100 percent who exactly will want to do business from your acquaintances, so invite everyone.

Often I hear from my guys in the process of compiling a list of potential partners something like this: “I have a friend Vasya, he is an entrepreneur, a serious person, he will definitely be interested” or “yes, this is the number of the guy Petya, who assembled furniture for me, he is“ burdock ” , it definitely does not make sense to invite him to a meeting.

In the end, things don't end up the way they were supposed to.

A serious entrepreneur, Vasya is so passionate about his business that he is not interested in other areas. On the contrary, Petya, a furniture assembler, arrived from another city a month ago, he has great ambitions to build his own business and he will dig the ground with his nose to achieve results in network marketing.

It happens in different ways and only in actions you will see who will become your business partner.

Step 4. Have many meetings with potential partners

Building a team through meetings − key moment in network business development. You should have a sales presentation on hand, rehearsed many times and understandable to you and others.

It's a business of statistics, it doesn't work here only for those who didn't a certain number of actions. You will gain invaluable experience by holding many meetings. Earlier I already wrote that it is important to hold meetings on technology.

If you do everything right, then in a few days you will form your first line in the organization, that is, you will recruit an average of 5-7 partners in the structure.

By teaching them to do the same, you will start the mechanism of self-scaling of your structure.

Step 5. Expand your circle of acquaintances (effective networking)

Develop, read books, fill yourself and then you will be interesting to others. Study materials not only on business or mlm, but also on other related areas. So you quickly become a versatile person and a pleasant conversationalist. Building a business will not be a job for you, but a “lifestyle”.

The wider your horizons, the more people from different areas you will have in the structure and just as friends. It's nice and helpful.

Be active in networking.

Networking is an extension of the circle of acquaintances, the main purpose of which is to build business communication with people from different fields.

Attend events for the purpose of new acquaintances and self-development: trainings, seminars, sports and cultural events.

Passionate people are open to new opportunities and will certainly be glad to meet you. Even if they do not build a business with your company, at least half of them are your potential customers (consumers of products).

List of network marketing companies in Russia - rating

In Russia for 2019 there are dozens of network marketing companies.

Among them are several large players who share more than half of the market among themselves, the rest get only 20% of all.

MLM leader companies in Russia:

	Amway company one of the oldest and most famous in the world. Founded in 1959 by Jay Van Andel and Rich DeVos in the USA. Sponsors sports teams in Russia and abroad. It actively distributes goods of various brands through its consumer network.
	Oriflame company— The Swedish company, known both in Russia and around the world, operates in 60 countries. One of the pioneers in the MLM industry with an annual turnover of about 1.5 billion euros. It has its own production and research institutes, which makes its products affordable and high quality.
	Avon Company founded in 1886, that is, the company is more than 100 years old! In Russia, only a very dense person has not heard of her. Almost every girl used her cosmetics or other products. The company positions its products as inexpensive and of fairly high quality.
	Faberlic Company founded in 1997 in Russia. Her cosmetics are positioned as oxygen and especially healthy. A few years ago, the company began to produce shoes, clothing and accessories, thus expanding its product range.
	Mary Kay Company was founded in America in 1963 and named after its founder, Mary Kay Ash. It is one of the largest cosmetics companies in the world, one of the TOP MLM industries in terms of scale of activity and turnover.

These companies are almost universally heard.

The following companies in this industry are also quite well-known:

The world operates direct selling association, Russia also has it representation.

Europe has its own similar association - RDSA. These organizations regulate the activities of the MLM industry, monitor compliance with quality standards, products sold and the ethical component of the work of participants - network marketing companies.

Network Marketing Books

Useful saying:

Man with higher education differs from a person with a secondary education, only in that he has read 50 more books!

By the way, according to statistics, average specialists in their field read less than one book per year!

Below is a list of TOP 50 books on network marketing, they can be downloaded in a docx document.

My selection of books includes not only specialized publications, but also top books on related topics that will be 100% useful to you! Be sure to read them.

MLM is first and foremost a business, and like any entrepreneur, you must master the art of time management, be efficient, understand the economic and psychological aspects of creating your own business.

Frequently asked Questions

These questions are asked to me regularly, I decided to answer them in detail here, so that in the future these answers will help you.

Question 1. Which network marketing company to go to to earn money and not be deceived? Anton, 21 years old, Bryansk

Anton, again, I advise you to choose a company according to a number of criteria.

I have listed the main ones below:

1. Company publicity. This means that its shares are listed on international stock exchanges and there are transparent financial statistics of activity available to everyone.
2. Company age. The longer the company exists, the better. The minimum period of existence of an organization on the market, indirectly indicating its reliability, is from 21 years.
3. Natural consumer product. Good mlm companies sell everyday goods: cosmetics, hygiene products, vitamins, household goods, beauty and health products.
4. The turnover of the company: from a billion dollars a year. Yes, this is serious money, but you yourself are looking for a serious partner for a long time, right?!
5. Own production and research centers. Logistics is an important part of a good network marketing company. Such a company "has something to brag about." Own production base and own product developers indicate that the company has entered the market in earnest and for a long time.
6. Classic marketing plan. The most important component of a network business is a marketing plan. There are 5 types of MP in total. All have their advantages, but also disadvantages. In my experience, the most worthy marketing plan is the "classic". When meeting with a company representative, ask what marketing plan this organization uses to promote its products. If you are interested in learning about the types of marketing plans in mlm, write about it in the comments.
7. Company management. It's no secret that a business is a reflection of its leader. Find out as much as possible about the first persons of the "potential partner". Who are these people, how good is their business reputation, do they have the proper experience in the area of ​​business they are engaged in.

Question 2. Is network marketing a pyramid scheme or are there differences? Marina, 26 years old, Izhevsk

Marina, there are differences. Network marketing has nothing to do with the financial pyramid. Many people, without understanding, really do not see the difference in these concepts.

If they tell you that MLM is a pyramid scheme, know that your interlocutor simply does not understand this business

In the table below, I wrote down the points, what is the difference between network marketing and a financial pyramid:

Network marketing	Financial pyramid
Legal way to distribute products	Enrichment scheme for founders prohibited by law (in most countries, including Russia, criminal liability is provided for organizing financial pyramids)
There is a product demanded by the market	The product does not exist or exists nominally to "cover" illegal activities
The profit of the company's partners is formed due to the turnover of a quality product	The profit of the pyramid investors depends on the monetary contributions of the participants invited by them.
Business entry (registration) is free or symbolically low (a few dollars)	You can become a member of a financial pyramid simply by investing money and receiving imaginary interest or fixed payments
There are payment and other official documents in the course of business (invoices, checks, contracts)	There are no papers confirming the contributions, it is legally difficult to understand on what basis the pyramid should pay interest and the amount of the contribution to its participants
Good network marketing companies have been around for decades and thrive	The period of existence of financial pyramids does not exceed several years (usually from 6 to 24 months)

How to make sure that the company with which you plan to cooperate is not a financial pyramid:

1. Most reliable option- check whether its shares are listed on world stock exchanges. This can be done through the "promotions" application on any smartphone. If the company's shares are freely traded on the stock exchanges, it is called "public".
2. Pay attention to the company's product. It must be massive and have a real market value, and in the usual "market" this product must be comparable in price and quality. Pay attention to the quality standards used in the production of the product.
3. In a financial pyramid, they offer interest on the money invested, which is taken, of course, from new “victims”, or fixed amounts.
4. On the site nalog.ru you can check the company by TIN and type of activity. Also be sure to pay attention to the size of it authorized capital. It is he who is the guarantee of the return of funds of creditors and investors in case of bankruptcy of the company. Now the minimum amount of the authorized capital when creating an LLC is 10,000 rubles. It is not difficult to calculate if 10,000 investors invest 100 million rubles in a pyramid scheme, how much they will receive if the authorized capital of this company is 10,000 rubles. In the event of the bankruptcy of the company, according to the law, 10,000 "wooden" will have to be divided among all the "victims".
5. An indirect sign applicable in a superficial analysis is whether there is an economic justification for the company's activities. If you are promised 200-300-600% per annum on invested funds, run away from such unfortunate businessmen. Professional investors with big money consider it a great success to earn 25-30% per annum on invested funds. And they will definitely not invest a single ruble in a project that promises 10-20 times more. If you are even a little familiar with economic theory, then you know that big business earns on volumes with low profitability and does not grow just like that 10-20 times a year. And if you are told that this company is reliable and fast growing, then often one contradicts the other. Read this book and watch the interview of the world's leading investor - Warren Buffett and you will learn a lot about investing.

Question 3. NL is now a well-known network marketing company, what can you say about it? Olesya, 29 years old, Stavropol

Olesya, NL — interesting company. I will not comment in any light on her activities. I suggest you evaluate it according to the criteria I described in the answer to the previous question and you yourself will draw a conclusion.

Question 4. Work in network marketing: how to get it and how promising is it? Ivan, 24 years old, Odessa

Ivan, if you responsibly approached the choice of a partner company, such cooperation can become a serious business for you in the future. The MLM company has already invested a lot of money in the product, its promotion and all organizational issues have taken over.

Let's assume that you have chosen the ideal network company for cooperation, and here lies a completely logical question, how seriously are you ready to act as a partner?

You are very likely to make money and succeed in network marketing if you meet 3 important criteria:

1. Dissatisfied with the way you are now. And you can earn 30 000 rubles and be satisfied, and can earn 300 000 rubles and be dissatisfied with the current situation. It's not just about the material aspect. They work “hungry” (for knowledge, for financial results, for social responsibility). Maybe you need more freedom or you just want to expand your line of work.
2. You yourself believe that you deserve a better life. This is your inner conviction.
3. Ready to do something immediately. Only actions determine the result. There is this phrase: to have what you didn't have before, you must do what you didn't do before .

By developing your partners, you continue to develop yourself.

Question 5. How to pay taxes on profits in MLM and when should it be done? Olga, 32 years old, Samara

Olga, you can think about paying taxes when you already have stable turnover and you are going to withdraw the money earned on your personal account.

To do this, you should open an individual entrepreneur with a simplified taxation system, where you will pay 6% from the received profit.

Do not be afraid that you are opening a "company", this is a standard and very simple procedure. This has already been discussed in one of the previous articles on the site.

First, you can accumulate earned funds inside your company's personal account and use them as payment for products in a certain percentage of products.

However, the opening of an individual entrepreneur will entail the payment of mandatory pension contributions, which amount to about 30 000 rubles per year for individual entrepreneurs. Changes annually.

But there is good news here, our activity allows us to make a tax deduction in payment of pension insurance contributions up to 100% (determined by law).

You can collect money on a personal number for a long period of time without withdrawing it, until you reach the level of income from 100 000 rubles per month. But in this case, you need to have a financial "cushion" to cover current expenses until the moment of receipts from your business.

Question 6. How to attract people to network marketing if I'm new? Ruslan, 24 years old, Nizhnevartovsk

Let's start with humor: are held accountable, so I recommend to interest

Firstly, you need to understand this business yourself. You will be helped by mentors, books, videos and audio materials. Fortunately, since the late 40s of the last century, a lot of information has accumulated on this topic.

Secondly, to understand that all methods give results if they are followed exactly.

Thirdly, you need to know that there are a lot of people and there will be enough “work” for everyone. There is hot, warm and cold contact. Depending on the chosen type of contacts, apply methods of working with a particular client.

Fourth, act according to the sales technology of 5 points:

1. Established contact.
2. Figured out the values.
3. Made an offer in the key of values.
4. Replied to revival.
5. Closed the deal.

Fifth, remember, your expertise in business no one will pick you up. Learn and you will succeed.

P.S. The mentor goes to the one who gets him

Question 7. Business in network marketing: how long to build it and how much can you earn? Sonya, 35 years old, Kaluga

If we are talking about incomes above the average salaries in your city, then there are a lot of examples when people reach such incomes from two weeks to two months.

This is natural during daily meetings on the technology of building organizations and complete immersion in this area.

There are also people who in SM for years simply receive additional income in addition to the salary at their main job. At the same time, their employment is minimal and is not aimed at obtaining a lot of money.

You can earn above average: from 70 to 80 thousand rubles per month (1.5-2 thousand dollars ), and already quite good money from 150 to 500 thousand rubles . Almost all companies have examples of income from 1,000,000 rubles per month. Particularly successful entrepreneurs make money in network marketing 1 000 000$ per month !

Payments come every three weeks when the current catalog is closed:

Admission at the end of August 2018
Coming in mid-September 2018

Question 8. Is it possible to do network marketing at home via the Internet? Vladimir, 28 years old, Moscow

Vladimir Yes, it is possible. The main thing is your desire to acquire new skills and apply the ones you already have to achieve your goals and realize your dreams. Now, through Skype, Instagram, WhatsApp, Telegram, Viber and other online platforms, you can show presentations and exchange any data.

It doesn't matter what city your potential partner is in, their turnover will also help increase your income.

Question 9. How to build a network in MLM remotely? Dmitry, 25 years old, Kursk.

The main thing is to build an organization on a duplicated system and create joint online meetings, conduct training for future partners.

Smoothly typing a team in your wall point, add friendly meetings. Moreover, leaders in other cities repeat after you, and on the same days create the same meetings around them.

Learn to do it perfectly yourself, and then teach your wards to do the same with respect to their partners, and then you have "a book will write books."

Question 10. How do you rate the quality of cosmetics and other products in network marketing companies? Svetlana, 29 years old, St. Petersburg

If we are talking about companies that have passed the selection criteria (see above), then these products are very competitive both in price and quality.

If this were not the case, then customers in 100% of cases would prefer the products of "classic promotion" companies and network marketing companies would not exist for a long period of time.

I enjoy using the products of my company and even recorded a short motivational video on this topic:

conclusions

Can you make money in network marketing? - definitely, yes! However, this is not a panacea and not an ideal business. As I already wrote, it has its own advantages and disadvantages.

If you seriously do business in this area, you can get both financial freedom and a temporary resource for creating your own lifestyle.

As in any other matter, it is very important to take an objective approach to the study of the topic.

Such a phenomenon as MLM has existed for decades and has raised thousands of millionaires during this time. Who knows, maybe you will be one of them.

The main thing is not to be lazy and carefully analyze the company whose client or partner you are going to become.

I wish you success in the network business and see you in new articles!

PS. Friends, have you come across network marketing in real life, maybe you yourself are clients or partners of such companies? Share your opinion on the topic in the comments, ask questions and I will definitely answer them!

With respect and faith in your success,entrepreneur and expert

online business magazine "PAPA HELP"

Rinat Admiralov

This is a special type of business in which you can earn a lot of money, help a large number people and at the same time set fire to the full program.

It's just a very meaningful and logical business.

Get familiar with this profession. Understand what you can get from network marketing and form your own informed opinion.

What is the essence of MLM business

In network marketing, as in any other business, your main task is to create a network of consumers. People buy products from the MLM company you work with, and the company pays you a percentage of their orders.

But if the whole business was reduced to the personal attraction of customers, it would not be so interesting. It would be a regular affiliate program, like in many online stores - bring a client, get a commission.

The main strength of a multi-level business is that you can look not only for clients, but also for partners. And as a result, you create a network of consumers not alone, but with a team.

I will give an example that literally fascinated me at the beginning of my networking career.

An entrepreneur friend of mine who, by my standards, was earning a lot of money in MLM, told me the following:

"Andrey, look. Suppose in the first year you find only 5 smart partners who decide to develop a business with you. In the second year they find 5 partners each - and you have 25 new key partners in your team.

For the third year you have 25*5=125 new partners in your team. For the 4th year, 625 partners are already coming. And after 5 years, 3125 people join the team.

You didn't invite them personally. Your partners brought them. But you get your percentage of the entire generated turnover. And since people order groceries every month, you get your check every month.”

After that conversation, I could not sleep for several nights. I decided that I could connect five people in any way in a year. And that means - sooner or later I will succeed.

Of course, in real life, this scheme does not work as simply as I described. Of course, not all invitees will be in business. Someone will remain a client. And someone will leave the business altogether and will not even buy products.

But one way or another, over the past 5 years in my current company, I came out with an income of about 8,000,000 rubles. in year.

How MLM business works in the 21st century

Previously, many people perceived the MLM business as follows: “A. Well, you have to run around with bags, catalogs and sell. In the 21st century, such methods of work are no longer relevant. Now many MLM companies work with clients through an online store.

Customers order products directly from the company's website. The company (not you!) brings them products. And you are paid a percentage because the client bought on your recommendation. Thus, there is no need to run with the catalog now.

Our task is to fill the store with customers.

Moreover, you need to find a client once, and you earn from each of his orders.

Network Marketing Benefits

What are the pros and cons of network marketing. Let's start with the positives.

1. You do not need to invest in the creation of a product warehouse.

Your online store is filled with goods by an MLM company.

The company is engaged in production, delivery, logistics, monitors the availability and shelf life of products, organizes marketing campaigns, keeps records of remuneration.

Pay attention: you don't spend money on all these tasks. It's the company's expenses, not yours.

Compare this situation to a classic business where an entrepreneur has to pay rent, bookkeeping, grocery shopping, and pay salaries to all of his employees. And that's before he even started making money.

In network marketing, there are no such headaches. And in fact, you need to solve one problem: to organize the flow of customers to the online store.

How to do this is usually taught by the team you join. Rather so. I can't speak for all the teams - in our team we teach this.

2. You can combine MLM business with your main occupation.

No need to quit your job, quit your main business, or give your children to a nanny.

You can grow your business by investing as much time as you have.

This is a plus and a minus at the same time. Because most people absolutely do not know how to plan and effectively manage their time. Especially if the boss from behind with a stick does not push.

3. This business gives freedom. You can develop it from almost anywhere in the world where there is an Internet connection.

For example, my wife and I travel a lot. Therefore, I am very inspired that my business is now placed in my mobile phone. And I can develop it equally effectively both from my apartment in Moscow and during my life in Thailand, where we usually spend the winter.

Watch this video from the 13th minute to find out how network marketing differs from a classic business.

4. No risk

Even if this business does not work for you, what are you risking?

The cost of failure in network marketing is ridiculous. This business does not require much money. Basically, in the MLM business, you invest time, not money.

Moreover, the main point of investing time in the MLM business is this: you invest time and effort now in order to receive passive income from the created network of consumers in the future.

Just in case, I’ll clarify that passive income is income that comes to you regardless of whether you work or not.

And what do you need money for in MLM?

At a minimum, you start using your company's products. But let's think logically. Swapping some Head & Shoulders for your network company's shampoo is not a risk. Or, for example, replace breakfast from an omelet with fried sausage for tasty and healthy protein shakes - anyway, you will spend this money on food.

Cons of network marketing

1. Very low entry threshold.

Usually, to start a business in network marketing, it is enough to place an order for products for $50-200. This is both good and bad.

Good, because you don't really risk losing a lot of money.

Bad, because it allows people who hope for a lottery ticket to start a business. And this means that at the first difficulties, beginners often lift their paws and say, “Well, okay. It doesn't hurt, and I need to earn more. I'll go do something else"

Compare that to buying, say, a McDonald's franchise for half a million bucks. Yes, a person who has swelled that kind of money will not sleep at night, gnaw the earth with his teeth, but he will make sure that he succeeds. To squander that kind of money?! Yes, for nothing.

2. There is often no quick money in this business.

For entrepreneurs, this is not a minus, by the way. In classical business, people are happy if they go to zero in 2-3 years.

But for those who are used to getting paid for the time spent at work, and not for the result, this situation may come as a surprise.

In the network, you start earning only when you have managed to master the necessary skills. Has the team started to grow? Is your online store getting more customers? Excellent. You start earning good and stable money.

But that could easily take a year. And people with no experience have even more.

If it shocks you - pichalka. Perhaps network marketing is not your type of business. And it would be better to stay at work for hire until the end of your days, for example.

3. You will encounter other people's advice and negative opinions.

Many people don't understand the difference between legitimate network marketing companies and pyramid schemes.

How to explain what network marketing is to a person with brains

You will be told that you are doing some bullshit.

Newbies leave the business because someone told them network marketing is bad.

The novice himself did not have time to learn this profession. He didn't understand her. There is no well-founded opinion. So if 10 people tell you that you are a fool and your business is a fool, you will probably believe it.

Many believe - and leave.

What to do?

Make sure you get to know the profession better. Read a couple of books, watch a couple of smart films about MLM, meet your sponsors, go to training.

The higher the level of confidence in the profession, the stronger the armor of the partner. The more likely it is that he will hold on to his opinion, and will not fall under the opinion of other people who, in fact, do not care about his future.

If you depend heavily on the opinions of other people, you will have a hard time in network marketing. Although what is really there ... Not only in network marketing.

Summary

Let's end where we started.

Network marketing is a special kind of business where you can make a lot of money, help a lot of people and at the same time fire up to the fullest. It's just a very meaningful and logical business.

This is a risk free business. A business that gives you the opportunity to get both money and free time.
Get familiar with this profession. Understand what you can get from network marketing and form your own informed opinion.

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:

"What if everyone useful material 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.

Karl Rehnborg came to an unexpected conclusion: if a nutritional supplement is sold at the average market price, and not just distributed 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 study, 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 contract is not included in the labor format, i.e. does not provide you with 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 at various levels are based on mutual assistance - this 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 development of their 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 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

Your network income and confidence in stability depend on the right choice of employer.

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, pricing policy - acceptable for the middle class. Get ready to meet a huge female 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 the right word to describe the activities of the company "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 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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The basis of MLM (MLM) business is special organization sales. It does not involve the presence of retail outlets, but the attraction of regular buyers of the products of a particular company using active marketing.

The success of a distributor (distributor of products) to a greater extent depends not on their own level of product sales, but on the number of like-minded people involved in the business. On how wide a network a team member will build. MLM structure - classic look network marketing, which many have heard of, but are afraid to try.

Principal structure of MLM

MLM business - a pyramid? This question is asked by many, having received an offer to become one of the participants in the network structure. At first glance, it really looks like a financial pyramid. The lower links, connecting to the network, ensure the growth of trade and the well-being of those who are in the upper echelons. But the lower links earn from the first purchase of products.

1. Distributors buy goods at a 30% discount. It is beneficial to have high-quality branded products at a price significantly lower than the market price.
2. Selling goods at market prices, they receive a good trading margin (margin).
3. By attracting new people, the distributor generates passive income in the form of referral deductions from the sales of his wards. More people on your team means more money.
4. The company gives gifts to successful independent entrepreneurs who have reached a high level, organizes trips to seminars around the world, and pays passive income in the form of a reward for a stable network built.

The first two positions are low earnings. The third and fourth positions are the levels when the business begins to generate tangible income and becomes the main occupation in life.

Please note that business participants do not invest money and passively wait for income, as happens in a classic financial pyramid. Distributors work and receive remuneration corresponding to the level of sales.

The second difference is that money is not invested in the promise of interest. Real goods are purchased for subsequent sale. When a person understands this, he does not compare network marketing with a pyramid scheme.

Features of MLM business

The secret of the success of network companies is mobility, the ability to deliver goods to each consumer individually. Such an organization of trade provides strength to MLM structures. financial well-being participants depends on the work of the team as a whole. The level of income of the upper links depends on the success of the work of the lower ones, so the former actively help the latter.

The condition for the stability of the network company's business is the benefit of its founders. They do not need to build shops, pay rent, utilities and other expenses for the maintenance of extensive infrastructure. It is beneficial for distributors that they are their own owners and builders of their own business and begin to receive income from the first steps in business. Small at first, then bigger and bigger.

Network Marketing Benefits

A variety of opportunities attracts new people to this field of activity. Business can be done online and offline. At your own discretion. Full freedom entrepreneurial activity is a big advantage of MLM.

The advantages include the opportunity to communicate on the margins of seminars. The advantage of seminars is the opportunity to gain knowledge, gain experience in doing business, which will be useful in life.

At the first levels, an independent entrepreneur does not pay taxes, the company does it for him. Out on high levels, a business participant registers with the tax authorities and pays taxes according to a profitable simplified system.

Entrepreneurship in the system of network marketing - minimum employment, minimum investment and the opportunity to gain financial independence.

History reference

The beginning of network marketing falls on 1927 and is associated with the name of K. Rehnborg - the creator food additives. He was the first to attract a circle of close friends to distribute products, and this began to bring significant income.

Like-minded Nutrilite Products Lee S. Mitenger and William S. Casselberry created the theory MLM marketing, which in practice has become an opportunity for many people to become rich.

The leaders of the current Amway company, which has been operating on the market since the 1950s, continued the work of the founding fathers. Today, Avon, Oriflame, Mary Kay, Faberlic work according to this scheme.

Criticism of MLM

From the earliest days of its existence, network marketing has been criticized. The main argument is that the bottom has to work like ants for the top to make a profit. This is true, but after all, the upper echelon at the beginning of their career was also “lower classes”, but they managed to build a subsystem that elevated them to the top.