Network marketing - what is it, the pros and cons of working in mlm companies. What is network business MLM (MLM)? How to make money in network companies in Russia

Network marketing as a type of business is gaining new heights. However, not everyone knows him well - some trust him and are happy to cooperate with such companies, while others try to stay away from MLM trading and sincerely consider it a swindle and a "pyramid".

Network marketing and financial "pyramids" - similarities and differences

The second category of the population is only partly entitled - the principles network marketing actually have similarities with financial "pyramids". It lies in the fact that in order to make a profit, it is necessary to attract other people. However, this is where the similarities end.

Simply put, in the second case, you can bring as many new participants as you like, but if they don’t buy anything, then the income of the “agitator” will be zero.

With the first option, the opposite is true - the client receives a percentage of the contributions of newcomers. In this case, the amount of the initial payment is usually very significant and can range from $100 to infinity. The participant most often does not receive a real product or acquires something that does not have high cost in the real world.

How to choose a company for cooperation

For those who decide to start a career in network marketing, experts advise choosing the right company for cooperation.

Here you need to pay attention to the following factors:

Training and informing consultants

For a beginner, it is very important to have the opportunity to attend various trainings, consultations with more experienced sellers. Many companies offer step-by-step training systems that allow anyone who wants to quickly move up the corporate ladder. In addition, MLM organizations often offer educational and promotional materials.

Company reliability

There are two ways here - to choose a start-up company or a company that has already established itself in the market. In the first case, you can be at the very origins of the business and have more opportunities to attract new customers and get "quick" money. But here the “pitfall” is the new name of the company: firstly, no one knows the quality of its products, and secondly, it can quickly cease to exist.

In the second case - to go to work in a reputable company - there are also pluses and minuses. On the positive side: the products of this company are already known to the consumer, so they sell better. In addition, it is unlikely that it will fall apart in the next few years. But there are also disadvantages - such companies already have enough distributors, and competition among them is high.

Manufactured products

It must meet the following requirements:

• high quality and environmental friendliness is a must! After all, network marketing is built on the principle of "word of mouth", and in the event that the buyer was dissatisfied with the quality of the purchased product, he will recommend to his friends not to use it;
• a wide range - in this case, each buyer will be able to pick up something special for himself and his family. How many advisors can be successful trading only two or three positions?
• affordable prices- they must be such that 95% of the country's population can afford to purchase this product;
• not a very long validity period - this is necessary so that the client purchases these products as often as possible. If the product has a validity period of several decades (for example, dishes), then the distributor will have to constantly be in search of consumers. The ideal goods for trade are cosmetics, household chemicals, perfumes, hygiene products,.

Company rating

Continuing the topic, you can casually notice that a company for cooperation is chosen based on its financial indicators. And this is logical - the more sales the company has, the the best demand its products are used by consumers, the more stable it develops and grows faster.

The rating for 2017 is as follows (in billions of dollars):

1. Amway - $9.50
2. Avon - $6.16
3. Herbalife - $4.47
4. Vorverk - $4.00
5. Infinitus - $2.88
6. Mary Kay - $3.70
7. Perfect - $3.58
8. Natura - $2.41
9. Tupperware - $2.28
10. Nu Skin - $2.25
11. Tiens - $1.55
12. Primerica - $1.41
13. Ambit Energy - $1.40
14. Oriflame - $1.35
15. Belcorp - $1.20
16. Telecom Plus - $1.17
17. New Era - $1.16
18. Jeunesse - $1.09
19. New Avon - $1.01
20. Young Living - $1.00

There is a Direct Selling Association (DSA) in Russia whose main goal is to develop the network marketing industry. She is also involved in protecting consumer rights and monitoring compliance with ethical standards in doing business.

This association includes only 21 MLM companies out of many firms operating in the country:

Senior members of the APP:

1. Amway
2. Herbalife
3. Mary Kay
4. Oriflame
5. Tupperware
6. Tiens

Active members of the APP:

1. Jafra
2. Coral Club
3. Mirra
4. Morinda
5. Nu Skin
6. Tentorium
7. Faberlic
8. Florange
9. Associate Members of the AMS:
10. Accord Post
11. AlliancePrint
12. filuet

Based on these data, you can choose an excellent company for cooperation and start, albeit small at first, but your own and reliable business.

Traditionally, on the first Sunday of December, Russia celebrates Networker's Day - a holiday for everyone involved in network marketing and direct sales. On this occasion, we decided to recall the most famous MLM companies and understand whether multilevel marketing is a serious competitor to retail.

Strong link

Multilevel marketing (MLM) is one of the methods of direct sales. With it, the sale of goods is carried out through a network of independent agents, each of which can not only sell the company's products, but also attract partners for this. At the same time, his income will be made up of his own revenue and a percentage of the revenue of the people he hires. Another name for the system is Network Marketing, which translates as "network marketing".

Profit from direct sales for distributors is quite low. They give most of the proceeds to the company and to higher-ranking distributors. The main profit comes from the sales of sponsored distributors.

MLM companies are often confused with pyramid schemes like MMM or Khoper Invest. Indeed, the "pyramids" took the principle of network marketing as a basis.
The participants who stand at their origins receive money from the contributions of "newbies". But, unlike network companies, "pyramids" do not offer specific goods, but in fact trade in air. Life cycle"financial pyramids", as a rule, do not last more than a few years - they exist only as long as new investors appear. While large MLM companies have been successfully operating for decades, bringing small but stable incomes to the lower levels, and billions to those who are at the source.

Pioneer Carl Rehnborg

The history of the creation of MLM companies is associated with the name of the entrepreneur Karl Rehnborg. In 1927, he opened a small food supplement business. own production. At first, Rehnborg sold products to acquaintances, who, in turn, shared rave reviews with their friends.

And there were those who wanted to. In 1934, Carl Rehnborg founded California Vitamins, which was later renamed Nutrilite Products. Very quickly, the company reached a turnover of several million dollars, without spending a single cent on advertising - only through direct sales.

To this day the most popular goods, sold through MLM marketing, are nutritional supplements and cosmetics.

AMWAY

Amway (American Way of Life) was founded in 1959 by Nutrilite Products employees Richard DeVos and Jay Van Endela. They decided to slightly change the principles of work that Nutrilite used. First, Amway began to sell different groups goods. In addition to dietary supplements, a variety of household chemicals and cosmetics appeared in the assortment. Now the company offers over 3000 items. Secondly, DeVos and Van Endela introduced a multi-level marketing plan for employees and began to pay remuneration not only from personally attracted distributors, but also for sales volumes of agents of all levels. This led to the rapid growth of Amway.

Now the company's turnover is over 8 billion dollars, and it ranks 25th among the largest private companies in the US according to Forbes. True, the history of Amway is not cloudless. More than once she became a participant in scandals. So, one of the former top distributors of the company, Eric Scheibeler, who is personally acquainted with the founders of Amway, accused the corporation of fraud and called it a totalitarian sect in the book Deception Merchants. This is not the first accusation of "Amveevites" of sectarianism. The training methods used in the company have been criticized more than once.

AVON PRODUCTS

The "long-liver" among MLM companies originates in 1886 with small firm called California Perfume. It was created by American David McConnell. Initially, the company's assortment included only 5 types of simple perfumes with floral aromas. Now AVON offers hundreds of cosmetics, perfumes, jewelry and accessories. The company's turnover is about 10 billion dollars a year, and the number of distributors around the world is in the millions.

Why McConnell is not considered a pioneer in the creation of MLM enterprises - history is silent. Perhaps the fact is that the company, although it used the principle of direct sales from the beginning of its existence, did not immediately come to a multi-level scheme. But the company AVON went down in history by being the first of the cosmetic giants to refuse to test products on animals.

Mary Kay

Another American corporation. Created in 1963 by Mary Kay Ash and named after the founder. It offers hygiene products, cosmetics and perfumes of the middle price segment. Ranked 6th in the world among direct selling companies in 2012.

Mary Kay's "chip" is that its consultants do not just sell products, but act as "beauty consultants". That is, they undergo basic skin care training. The second feature is that the territories are not assigned to a specific consultant: they can hire their agents anywhere in the world.

Like Avon, Mary Kay stopped testing its products on animals in the early 90s, but resumed it in 2010. For which she was severely criticized by the "greens".

ORIFLAME

The Swedish cosmetics concert Oriflame was founded in 1967 by brothers Jonas and Robert af Jochnik. In the early years, only one product line was sold, now the range includes about 1000 items of cosmetics and perfumes. The annual turnover is about 2 billion dollars, the number of consultants in the world is over 3 million people.

Oriflame positions itself as an environmentally friendly company and even prints catalogs on paper, which is produced from artificially planted forests. Therefore, Greenpeace people do not attack the company much. But she came to the attention of the tax authorities. In August of this year, the Russian representative office of Oriflame and non-payment of taxes for several million rubles.

FABERLIC

The first Russian MLM company was founded in 1997 by entrepreneurs Alexander Davankov and Alexei Nechaev. The original name is Russian Line, the Faberlic brand was registered in 2001. The company currently operates in 20 countries, including Poland, Germany, Romania and Hungary.

The company considers its know-how to be "oxygen cosmetics" - face and body care products based on perfluorocarbons. Faberlic's turnover is now over $250 million a year.

KIRBY

The company for the production and sale of vacuum cleaners this year celebrates its 100th anniversary. It was founded in 1914 and bears the name of the developer of the first vacuum cleaner models, Jim Kirby. The "chip" of the company is that in a certain period it sells only one model of vacuum cleaners. After the model becomes obsolete, it is removed from production and they start selling a new one.

Kirby is the most scandalous representative of the MLM diaspora. Every year, US consumer protection agencies receive dozens of complaints about the incorrect actions of the company's distributors. Allegedly, they use severe psychological pressure to force the client to give money for expensive equipment (for reference, the price of a Kirby vacuum cleaner starts at 100 thousand rubles). Russian forums are also full of messages: “Kirby vacuum cleaners are a scam, a scam, a divorce!”. Nevertheless, the company continues to operate in Russia and in 70 other countries around the world.

HERBALIFE

Established in 1980 in the USA, offers products for weight loss, healthy eating and skin care. Herbalife International is now led by former Disney CEO Michael O. Johnson, and scientific developments in skin care, Paolo Giacomoni, who previously worked for Estee Lauder and L'Oreal.

Herbalife is the first American MLM company to open a representative office in Russia. This happened in the early 90s and coincided with the appearance in Russia of a huge number of financial pyramids. Therefore, many still mistakenly rank HERBALIFE among them.

The debate about whether the MLM business is good or bad continues to this day. Some extol multi-level structures, seeing them as opportunities for quick earnings, others condemn the very principle of building pyramids. Business analysts do not agree. Some predict that direct selling will soon replace traditional retail, while others believe that retail and e-commerce will eventually kill MLM. However, network marketing has been around for decades and is not going to go down just yet.

Alena Yarkova almost got into the network
Illustrations by Dmitry Shevchuk

Hello, dear readers of the financial online magazine "RichPro.ru"! The topic of today's material is network marketing (MLM): what is it, which MLM companies in Russia have a high rating, how does it work network business and so on.

After all, for many centuries the model of distribution of goods and services " manufacturer – large wholesale. – small wholesale. – retail – buyer' was the only possible one.

Butin30s years XX century in the United States, a product distribution system was born and subsequently developed " manufacturer – distributor — buyer».

At the same time, the activities of MLM companies have been covered with various rumors for many years, comparisons with financial pyramids and ambiguous public opinion. Based on this, for an objective look at this species business, you should consider in more detail all aspects and nuances of network mlm marketing.

So, from this article you will learn:

• What is MLM - the history of the network business industry;
• The main advantages and disadvantages of network marketing;
• What network companies of MLM business are the most popular (ranking by sales volume in the world).

After reading this article, you will determine for yourself whether it is worth doing network multilevel marketing, find out which companies are better to choose and why, read the reviews of "experienced" mlm marketers.

What is network marketing and how does it work, what is the basis of the scheme of cooperation with MLM business, which MLM companies have high rating and much more read below in the article

Network marketing is a system for the sale of goods and services from the manufacturer to the buyer, which is carried out through recommendations from person to person.

The core of the MLM business is in non-store retail, in which the distributor independently establishes contact, advertises and sells the product to a potential buyer.

In addition to earning from retail sales a sales agent offers consumers, for a percentage of sales established by the company, find new buyers , which, under similar conditions, "attract" regular customers. The result is a multilayer network.

Network Marketing Tasks

• Product pricing optimization. Before 70% the retail price of everyday goods is the cost of the distribution network and advertising. Changing the distribution structure allows you to reduce costs.
• Providing the customer with quality, genuine products. With traditional product promotion, there are obvious prerequisites for the emergence of fakes on the market, and they are absent in the direct sales method: the product is not as widely known as its analogues from the traditional market, the manufacturer, distributor and buyer are not interested in the appearance of counterfeit products.
• Improvement of the product delivery system. The manufacturer's control over the logistics and storage of goods allows us to provide the consumer with a product of the proper quality and in the optimal time (read the article at the link).
• Improving the distribution of profits of the manufacturing company. Cost reduction allows you to direct financial resources to incentive programs for sales agents, various bonuses and incentives, as well as to improve product quality.

Let's take a look at how network marketing works.

2. How network business (marketing) works - the principle of operation of MLM companies 🗺

Multi-level marketing is an interaction between a manufacturer, an entrepreneur and a buyer.

How multilevel network marketing works - 3 sides of profitable cooperation with MLM

2.1. Network marketing by MLM company

An MLM company manufactures products in its own factories. She also develops a marketing and sales plan, based on which the proceeds from the sale of products are distributed.

As a rule, a business plan motivates distributors in several ways:

• a) consume the products themselves;
• b) sell goods to customers;
• c) create a network of entrepreneurs.

Manufacturers organize the delivery of products to their own warehouses in different countries and cities, as well as ensure that distributors receive goods at home.

For proper efficiency, entrepreneurs receive all necessary materials on products, master classes, seminars aimed at developing various skills are held.

2.2. Consumer Network Marketing

A distinctive feature of the direct sales method is the creation of convenient conditions for the buyer:

• Delivery. Entrepreneurs, as a rule, bring goods to their homes.
• Service. Before buying, the buyer receives all the necessary information about the product. Also during the operation it is possible to consult with the distributor.
• Quality Assurance. Most MLM companies guarantee product quality, with the possibility of a refund in full size in case of customer dissatisfaction.

2.3. Network Marketing by the Entrepreneur

Multilevel Marketing - a very attractive activity for people who do not have a lot of initial capital and business experience.

The entrepreneur has the opportunity to independently plan his employment based on his capabilities. Most employment in this type of business is observed among students, housewives and pensioners.

Some terms and definitions used in the network marketing business:

Distributor - a sales agent who has an agreement with a direct selling company and receives a commission for the sale of products, as well as a percentage of commissions for the turnover of the network created by this entrepreneur.

Sponsor (partner) of the 1st level - a sales agent who introduced the consumer to the possibilities of this business and helped to conclude an agreement with a network marketing company.

Sponsorship (affiliate) line - a list of entrepreneurs directly interested in the success of the distributor, which includes a 1st level partner, his sponsor, etc.

Side businessmen – a set of distributors that are not part of either the sales agent's subnet or the sponsor's line.

Bottom line partners – a list of agents included in the distributor's network.

Organization Width - a set of partners of the 1st bottom line.

Depth of organization — all agents of the 2nd and subsequent bottom lines in the distributor's subnet.

Active income - monetary compensation for the work performed by a person. Income depends only on the quantity and quality of labor invested.

Passive income- profit received by a businessman constantly, for one-time work performed. For this income prerequisite is the presence of assets, which can be real estate, bank deposits, shares, etc.

8. Advantages and disadvantages of network marketing - an overview of the main pros and cons of MLM business 📃

MLM - business has a number of advantages and disadvantages. The assessment of this type of activity in the media, among reputable businessmen, and politicians varies greatly.

Advantages of MLM - business and its advantages

Let's consider the main ones:

1. Low entry barrier to the market. When opening any business, an entrepreneur evaluates the resources that he needs to start in the market. In a direct selling business, little money is needed to start a business. Also, there are no costs for renting premises, warehouses and other fixed costs.
2. Possibility of doing business on the Internet. Since the end of the 20th century, more and more consumers, manufacturers, and businessmen have been making purchase and sale transactions on the World Wide Web. Doing business online is an indisputable advantage of business.
3. Product quality. Due to the peculiarities of MLM marketing plans, companies are able to allocate large sums for the manufacture of quality products compared to competitors who use traditional marketing to promote their goods.
4. Tutorials. To develop the skills of sales agents, direct sales companies are implementing training programs that include books, CDs, seminars, and a variety of training and presentations. This information allows you to develop not only in sales, but also contributes to personal growth, improvement of family relationships, etc.
5. Part-time employment. Opportunity to work in your free time and at the same time have an income from your main activity.
6. affiliate program. Sponsorship (partnership) line is interested in the success of the distributor. More experienced partners support, help and advise newcomers in every possible way. Relationships are built on equal terms, regardless of income.

As you can see, there are significant benefits for which you should start this business. We also suggest reading the article - "", perhaps you will find useful information there for yourself.

Disadvantages and cons of network marketing

Consider now the main disadvantages:

1. Reputation. Due to the lack of restrictions and selection of agents, sometimes new entrepreneurs conduct business incompetently: they impose products and the business itself, give false information and thereby compromise this type of activity in every possible way.
2. High likelihood of worsening relationships with friends and loved ones. Most of the population prefers employment. In the case of doing business without an office, warehouse and employees, friends and relatives have a negative attitude towards this business.
3. Slow or no business growth. As a rule, the entrepreneur receives the first significant results in the period from six months to two years, subject to systematic work and training. A very large number of distributors have not been successful in this business.
4. The vast majority of proposals for cooperation are rejected. Active participation in business building 80 — 95% of the work does not bring results.
5. Only a few entrepreneurs achieve significant success. On the way to success, a sales agent encounters a lot of difficulties, overcoming which requires perseverance, education and work on oneself. Not everyone is ready to overcome all possible obstacles.

Above, we presented the main disadvantages and disadvantages of conducting cooperation with MLM companies.

9. Rating of network companies in Russia - a list of the most popular MLM companies 📑

The first mentions of network marketing in Russia are dated 90s of the XX century and associated with the company Herbalife". The company's products quickly spread throughout the country. Tempted by new business opportunities, thousands of people have decided to cooperate with this organization. Expecting quick success many distributors endured collapse , attributing to the fact that the activity of this company is illegal .

At the same time, many financial pyramids appeared in our country that have an external resemblance to MLM companies. All this affected the reputation of this type of activity.

Despite these factors, the direct selling business in Russia developed significantly in the following decades.

By the start of the new millennium Russian market All the world leaders in network marketing are present.

In this table, you can consider the most popular network companies in Russia.

No. p / p	Company name	Brand Country	Products	Share of MLM market in Russia (%)	Sales volume in the world, billion $
1.	Amway	USA	A wide range of products: household goods, cosmetics, vitamins, dishes, water filters.	8,1	9,5
2.	Avon	USA	Inexpensive cosmetics for the middle class	28,8	6,16
3.	Oriflame	Sweden	A wide range of products: from cosmetics to diet food	27,4	1,35
4.	Mary Kay	USA	Cosmetics	4,9	3,7
5.	Faberlic	Russia	Oxygen cosmetics from natural ingredients	4,8	no data
6.	Herbalife	USA	A variety of products for a balanced diet, weight management and beauty care	3,0	4,47

The table shows that the world leader in this industry, the company " Amway» in Russia ranks only third in terms of sales.

Corporations have the largest market share. Avon" and " Oriflame».

Is it possible to make money in MLM, what is needed to make money in network marketing

10. Is it easy to make money in network marketing, and what is needed for this 💰

Due to its merits, network marketing is a fairly popular activity.

According to the Direct Selling Association of Russia, following the results of the last five years 6% population was employed in business based on multi-level marketing.

Distributors have significantly different earnings, which do not depend on the level of education, profession, number of children, marital status and other factors.

A small percentage of sales agents quickly and easily achieve results. This is due to the fact that knowledge and experience are necessary for success.

To achieve significant results in business, you should follow the following tips:

A dream is the main factor that allows an entrepreneur to overcome difficulties and achieve success. To maintain motivation, you should “break the path to your dream” into intermediate goals.

The sales agent must realize that the result of his activity depends only on his efforts and dedication to the cause.

Tip 3. Learn and develop

Most network marketing companies have training programs. They include business literature, CDs of business leaders, and training seminars are periodically organized.

For effective activity, you should write a list of acquaintances in a notebook and periodically replenish it.

Tip 5 Present business and product

Based on the list, you should "get in touch" with potential partners or customers. The number of presentations affects the final result.

Tip 6 Consult with the sponsor line

Better to learn from other people's mistakes. Top line partners have more experience and are always ready to help the distributor, as they have a personal interest in the success of the entrepreneur.

Tip 7. Build a business based on the developed strategy

A stable, long-term result can only be achieved if there is a balanced development of the "width" and "depth" of the structure.

Tip 8 Repeat actions and methods of achieving success used by higher partners.

It is also worth noting that the downline partners are also watching the distributor, and will repeat his actions.

11. FAQ - answers to frequently asked questions

Before engaging in multi-level marketing, potential distributors have a number of doubts and questions.

Question number 1. Should a newbie start?

Worth it, but don't expect quick success. No risk of "being in the red", small initial investment, high-quality educational programs, help of partners - factors that can affect success.

Question number 2. How to make your first money in network marketing?

When starting cooperation with a "network" company, sales agents strive as quickly as possible. Activities should start with simple retail sales.

Buying goods by wholesale price, and selling at retail - distributor makes money . First of all, products should be offered friends, relatives and acquaintances, as they will be more loyal to an inexperienced seller, and in the future they will be able to become regular customers or business partners.

Question number 3. Network Marketing: Is It Legal?

The direct selling business is a legitimate activity, which confirms the existence and development of these companies for decades.

Many illegal structures disguise their activities under the guise of network marketing companies.

Important! The potential client is invited to deposit an initial fee, pay for the mandatory training and purchase the minimum lot of goods. This is accompanied by the absence of checks and invoices confirming the purchase of products or the provision of services.

Also, the consumer should alert the poor quality of the goods or its absence.

Network companies offer good quality products and do not require significant financial investments to open their business.

Question number 4. What are the reviews of network marketing - is it possible to really make money on it?

There are many different opinions about network marketing on the Internet.

Here is some of them:

Review 1."At the beginning 2000s a colleague at work offered to try the company's products " Oriflame". I really liked the product, and I became regular customers. A couple of months later, she invited me to become her business partners and told me how to make money.

At the first stage, I managed to have a fairly large income, but then everything changed. I am raising two children alone, and as my network grew (at that time I had 34 people in the team), it was increasingly difficult for me to combine household chores and business.

As a result, incomes began to decrease, and at some point 12 people “left” my network. Later, I decided to switch to the classic business. In order to have big success in this direction, a lot is needed ambition, determination and activity. One girl from my structure has achieved great success in “ Oriflame". I do not regret anything, the knowledge and experience gained at that time allow me to successfully do my job now.

Olga, Samara»

Review 2.“In our sophomore year at university, our stream was 'covered by the virus' of network marketing. Earning opportunities from Faberlic fellow students discussed everywhere. I have never been a fan of sales, but still decided to try.

Over time, I realized that it is hard to make money in this business, the bulk of the income from your turnover is received by superior partners. To be successful, you need to be able to impose products.

I don't recommend network marketing to anyone.

Alina, Rostov»

Review 3." AT 2009 I had to close own business, and in the end I owed the banks $40,000, of which 2 000 I had to pay every month. I urgently needed to get out of this situation. I was in search of a solution, I considered various options for earning money.

Suddenly, I was approached by an old friend, whom I had not seen for many years, with an offer to go into business in cooperation with the company " Amway". At the presentation, he told me about the possibility of a decent income in a year or two. But I was as quickly as possible, which was suggested to focus on personal sales of expensive products, which have a significant margin. So I started in the business selling water filters and dish sets.

I have enough wealthy acquaintances and, in order to get out of my situation, I had to actively promote products. In my first year in network marketing, I spent weekdays 2-3 meetings with clients, and on weekends - 6-7. The result was not long in coming - I paid off my debts and, without actively "attracting" partners, reached 9 – 12 % achievement levels.

Next, I studied in more detail marketing plan company and began to develop its own network of distributors more actively. At the moment I'm at the level Platinum Independent Business Owner.

I agree that making money in this business is not easy, but if you have the motivation, then anything is possible.

Andrew, Peter»

Question number 5. How to distinguish network marketing (MLM business) from a financial pyramid?

Most lead their illegal activity under the guise of direct selling companies.

The table shows comparative characteristics these organizations.

Comparison criteria	Network marketing	Financial pyramid
1. Initial investment	Typically a small initial investment. The distributor for this money receives "tools" for activities: catalogs, information about the company, product and a detailed presentation of the business plan. For many companies, with a certain amount of initial purchases, these materials are provided is free .	imposing start-up investment,from 100 to 6,000 dollars. From this money, "bonuses" are paid to the higher "agents" of the pyramid.
2.Product	All activities are based on the sale of products. The product is of high quality and is in great demand in the market.	The product is missing or of little value to consumers.
3.Priorities in the activities of the organization	Receiving profit from the sale of products and its fair distribution between distributors and the manufacturing company.	Attracting new participants and distributing the profits from their contributions between the higher "distributors" and the organizers of the pyramid. Emphasis in activities on quick earnings.
4. Paperwork	Making money in a legal way: accompanying the purchase with checks, invoices. Drawing up an agreement between the company and the sales agent.	Lack of documents or their improper execution.
5.Distributor motivation	The business plan is based on the promotion of the manufacturer's products on the market and the corresponding remuneration of sales agents.	The plan involves only attracting new "agents".

Question number 6. How to choose an MLM company to start?

For newcomers who consider the direct selling business as a suitable activity, there is a question of choosing an organization for cooperation.

For an optimal solution, a number of aspects should be taken into account:

• Reputation and age of the company. It is better to opt for an organization with a good reputation and significant experience in this field.
• Products. The basis of any trade is a product. Its quality will directly affect the result. It is also worth paying attention to the features of the product. It is important that it ends after some time, and customers turn to sales agent again. The diversity of the assortment is also an essential factor when choosing a company.
• Tutorial. The education system has a significant impact on business success.
• The presence of the company's business on the Internet. Being offline greatly reduces the opportunity for business growth.
• Business plan. It is important to evaluate the company's marketing and sales plan in terms of the fair distribution of the profits of the organization. You should also check for restrictions. best view business plan is multistage plan with branch».

Question number 7. I want to try my hand at network marketing at Oriflame, Faberlic, Amway - what do I need for this?

In order to become a distributor of direct selling companies, it is necessary to draw up a cooperation agreement with this organization, the age of the applicant must be at least 18 years old.

To register the contract, it is necessary that the newcomer has a sponsor who will help draw up the documents.

12. Conclusion + related video 🎥

In recent decades, various methods of promoting products have been rapidly developing in Russia, one of which is network marketing. Despite the controversial reputation, this way trade became convenient and popular among buyers.

Having a thorough knowledge of what is direct selling business , the consumer can make the best decision about its use - to access quality goods that are not available in retail stores, receive Additional income or develop your own network business with the prospect of significant income.

In conclusion, we also offer you to watch an interesting video about business on the Internet:

* Calculations use average data for Russia

It is unlikely that anyone now does not know what MLM is, aka network marketing, from English multilevel marketing, can also be translated as multi-level marketing. At its core, MLM is the concept of distributing your product, that is, virtually any enterprise can engage in network marketing, regardless of the scope of its work. However, it is not very convenient to distribute services in this way, so this principle usually applies to the sale of any goods. In civilized countries, where MLM has long been born, and then through the thorns came to an adequate organization of its work, there are special laws that regulate this very specific and unflattering way of distributing products. In the same country, no such legislative acts were found, and when superimposed on the Russian mentality and economic situation, this gave its unexpected effect.

It must be said right away that MLM, in general, is a very progressive concept, which has its own not only disadvantages, but also important advantages, it’s just that in the end it began to be implemented crookedly, and in Russia in general there was a particularly obvious stratification of the “top” and “ referrals, when the former, quite rubbing their hands, received huge profits, and the latter were forced to spend their own money on a product they did not need. But first things first. So, network marketing is the concept of distributing goods and (much less often) services, when involved employees are involved in the implementation, who also have the right to attract new people to expand the network and transfer similar rights to new members. However, the foreign definition is somewhat more accurate, because in the end it is not a network of interdependent and equal participants that is built, but a pyramid, at the top of which the leader has a good income, and employees at the very bottom are forced to resort to all possible ways and solely at its own expense of the sale of goods. They are proudly called distributors, less often sales agents, and therefore the latter imagine themselves to be almost independent businessmen. To some extent, this is true, only the principle of operation is slightly different.

For a Russian person, MLM is warningly consonant with MMM, both are pyramids, only the genius of Mavrodi went too far, and therefore crashed. However, at present, people enter the labor market who simply heard about vouchers from their parents, and therefore have little idea of ​​the dangers of financial pyramids. Especially if the pyramid is headed by a person focused only on his short-term profit. This is the first problem of many modern MLM companies, although from the outside it may seem that the company has its own corporate style and support for employees. In fact, everything is different - it's just marketing ... aimed at their own employees in order to deceive them. Moreover, it got to the point that a very negative image was created for network marketing, and from both sides at once - and the population disliked the meticulous referrals trying to force the purchase of their miracle powder almost by force, and the disappointed referrals themselves, who spent all their savings and a lot of time, after sitting surrounded by purchased vacuum cleaners and understanding the whole essence of deception, they began to quite naturally resent this concept of marketing. It all started back in the merry 90s, when Zepter pots, Herbalife dietary supplements appeared, then the unprepared market saw unreasonably expensive Kirby vacuum cleaners, and now the negative image of network marketing is supported by a huge number of Chinese companies, which work exclusively in Russia and in some other countries, because in China they give a serious prison sentence for MLM. In connection with all this, a company that has decided to engage in direct sales and MLM in particular will have to face a huge number of problems and distrust of both consumers and potential employees. Although many of these organizations thrive to this day, using all the same dishonest methods of selling their miracle products, because a certain contingent of people are not mammoths, they do not die out.

Let's try to consider the possibility of organizing our own MLM concept, which will use only "honest" methods, work the way all progressive humanity works now, but taking into account Russian realities. In principle, any company that is focused on the sale of its products can use the concept of network marketing. a large number consumers. The simplest and most striking example of the use of network marketing is just in large manufacturing companies, but at the same time producing a product of mass consumption. If we do not take long-suffering vacuum cleaners into account (because the trade in equipment is generally a more complicated process), then most often through MLM they sell cosmetics, non-drug products that are passed off as medicinal (BAA) and other frying pans. That is, this is the product that you can buy, in general, spontaneously, without planning the purchase initially.

So, the owner of the company releases a product and decides that cooperation with distributor companies, retailers and other familiar market participants is not profitable or simply inappropriate for him, and it is much easier to use the direct sales method. The entrepreneur attracts employees to his staff who should be engaged in these very direct sales, that is, in fact, he needs sales agents. This is where the differences begin. The sales agent in the simple case receives a percentage of products sold, often has a fixed salary, albeit a small one, receives all social benefits and is fully employed at the enterprise. He is protected. In a company that practices MLM, the sales agent quite often does not even get a job, but is simply listed as an employee on the side. Therefore, he is initially deprived of all his rights according to labor code Russian Federation. If a company does not hire its sales agents, then they are at great risk, because they are engaged in what is in fact illegal entrepreneurial activity, after all, it is unlikely that any of them, after starting work in an MLM company, go to register as individual entrepreneur and at the same time he is generally ready to pay taxes. At the same time, the parent company itself legally acts legally - it transferred its goods on a reimbursable basis and paid the profit from this. At the same time, she does not keep employees on the staff, to whom she has to answer and, in general, pay them money.

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This is the essence of MLM - all referrals, in fact, work only for themselves, providing their managing manager in the process of their work. The fact is that today in the vast majority of companies that work on the principle of network marketing, it is required to pay for a consignment of goods from their own pocket to get started. That is, the manager does not give it for sale for a fee, he literally sells his product to his own employees. In critical cases, there is also a “validity period” for this trial batch (usually a month), that is, if the agent did not sell anything during the reporting period, this becomes exclusively his problem, because he paid for the goods with his own money, and the next month he is obliged ( yes, it is obliged) to buy a new batch already. Sometimes in the first month they offer a “trial” batch, which costs him a little cheaper, but subsequently the amount increases. So it turns out that the goods are bought by the employees themselves. Black MLM companies make money on this. In principle, they are not interested in promoting their product to the masses, they generally do not need to engage in marketing in general and maintain the image of the company and product, because income is generated solely through sales to their referrals. So, in general, the implementation process is also going on in “normal” MLM companies, the only difference is that the normal one is trying to put the product on the market and support its employees, and does not profit solely at their expense.

A logical question is that if no one buys products, and a person is forced to buy what he does not need and what he cannot sell, then where does the income come from, because even in the most neglected cases after 3-4 months such people simply leave. This is true, although there is a percentage of those who are confident that “everything will be very good from next month”, but in most cases income is formed at the expense of neophytes. Great amount students, housewives and other similar elements want to find themselves simple job with a flexible schedule (and you don’t have to sit in the office with a nasty boss), for which they would also pay well. Network marketing promises it all, hiding some important details. Therefore, it is often enough for a manager to conduct interviews monthly (or even more often) in order to attract newcomers who simply pay once, and then leave, anyway, in the new month there will be another thirsty for easy money.

A normal company (of which there are practically no on the Russian market) acts differently. The founder attracts direct sales specialists to his staff, draws them up in accordance with the Labor Code of the Russian Federation, after which he gives them the installation to find people who will also be engaged in the sale of goods on the same conditions. This is how similar rights are formed for all network members, that is, even the founder is actually equal to his employees, his only advantage is that he receives the goods directly. At the same time, no one and no one obliges anyone to buy goods right away, a person is hired precisely as a sales manager, and not a “distributor”, who is promised huge profits literally tomorrow. It is very important that experienced and competent people who are engaged not only in sales, but also in training new employees stand at the origins.

It may seem that providing employees with both free (and in a normal company it should be free) training, and social benefits, and support, combined with equal rights, will entail losses, but in fact this is not the case. Here you need to know what TQM is, which is generally very well combined with MLM, but due to the fact that TQM (total quality management) is focused on the long term and requires a lot of investments, which, although they will pay off many times, but not very soon, have not received distribution. It's simple - network marketing was perceived precisely as a tool for quick and not entirely honest profit. The modern progressive concept has fallen victim to human greed. In this regard, you need to develop your network marketing only in combination with even more advanced economic and management decisions(not only TQM, there are others in the economy good ideas), because all this will lead to an increase in the income of the organization, and in the end it will turn out to receive even more profit, but only in an honest way. Unscrupulous entrepreneurs need to remember that this will allow you to earn, albeit a little later, more money, and the company will enjoy a good reputation among the population, and hence among potential employees.

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There is an important thing to note here. In most cases, MLM is used by companies that produce, to put it mildly, not very high-quality or simply unclaimed product. Unpopular products can sometimes only be sold this way, because there are several advertising laws that are inconvenient for a dishonest enterprise, but most often it is low-quality products that are sold through network marketing. Which are sold at the same time at a price sometimes several times higher than higher-quality counterparts. Of course, here it is easier to deceive your employee, force him to buy his own something, and then send him by hook or by crook to sell this something to at least someone. In especially neglected cases, referrals of the lower levels reach the point that they simply call each apartment and literally try to sell their goods on the doorstep. This method of selling has a number of disadvantages (any person with even a little understanding in marketing knows this), but in the case of MLM, it shifts all the problems onto the shoulders of the referral. Some of them try to trade goods via the Internet, strictly speaking, it doesn’t matter to the manager who and how the product will be sold, but given that the “black” MLM company focuses only on the number of its referrals (the more there are, the higher the income), then she hires more than ever, absolutely everyone. And 99% of these people do not know anything at all, not only about marketing, but about the principles of simple trading in general. Moreover, often in MLM companies there are trainings for "personal growth", "mastering the skills of selling" and other nonsense, which aims not at training, but at brainwashing. No wonder the Russian Orthodox Church opposes network marketing companies - they realized that such companies form their church with the messiah in the form of a founder. Bread, in general, is taken away. And in many cases it is true, the trainings tell stories about successful referrals (most often fictional), who eventually built their business, because in fact only the founders who were good at driving the ideas they needed into other people's heads were able to make a profit. Yes, meetings of MLM employees who really got into the idea, worked for several months and still cannot afford to be disappointed, are like a meeting of witches and even more like a meeting of religious fanatics. Here it is impossible not to note the good skills of a psychologist among managers and employees who have nevertheless achieved some results (they become those who were able to attract a lot of their referrals), because not everyone can brainwash like that either.

As a result, the chain is simple - at the top is the leader, a little lower are smart psychologists, even lower are those who were able to do vile work with the wrong hands, and at the bottom there is a sea of ​​​​desperate and believed that if you buy a product that no one needs every month and impose it everywhere, then success will surely come. Due to the fact that the product is sold, its price increases many times at each level of this rotten pyramid. Especially neglected cases, when in this chain there is no way to rise to a higher level, but you can only form levels below you. You do not need to have an economic education to understand that at each subsequent level the price of a product will increase, and the final consumer (if there is one) will receive it with a margin of several hundred percent, or even more than a thousand.

Thus, a company that wants to engage in network marketing must produce a really high-quality or at least liquid product. The product must be bought, and bought constantly, but what is very important - it must have competitive advantage. The MLM scheme itself allows you to save in many ways. The first is the absence of the need to maintain their own trading platforms, in some way the need for advertising is reduced, because a positive image of the product is formed by agents, and this image is reinforced precisely by the positive experience of using it by the consumer. Hence the good reputation and demand for the product.

Through network marketing, you can even sell elite goods that can only be obtained “through acquaintances”, this will generally form an excellent perception of the product and, ultimately, may generally lead to the fact that the price increase will not come from the manufacturer, but from the consumer, who I'm willing to pay more for something unique. Such marketing techniques are much more effective.

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But the most important thing is still the high consumer value of the product, even if it is a completely new product on the market or even innovative. Only innovative it should be not only in words. Further - the company itself should be engaged in marketing not only network marketing. That is, there should be information about the product on the market, a good image of your product should be formed, presentations should be held and some advertising campaigns. Then the person will know that the offer on the Internet from the referral includes the implementation of a really good, high-quality and proven product. If there is a recognizable brand (recognizable with a positive connotation), then it will be much easier for the referrals themselves to sell the product. And hence the profit of the organization itself. As for trainings, maintaining the loyalty of your employees and other work with the staff, then again, everything is described in the TQM concept. Then you can get people no less zealously serving the goals of the company, only not zombified by empty promises, but motivated by real results. And you need to train people constantly and, yes, do it for free. This is company money.

The correct use of MLM will lead to the fact that the manufacturing company will form a chain of its relatively independent distributors who have good sales, perform some of the many duties on their own, build their own successful business, while at the same time employees who act very efficiently. Sales growth will clearly exceed the level of sales growth of the “black” MLM company many times over. At the same time, the social benefits are obvious - the employment of the population, the promotion of business to the masses, the formation of modern entrepreneurs who know how to trade. Yes, you will have to invest a lot of money for this, because this way of organizing a business is much more expensive, you will have to hire competent managers and fully support your own development strategy, helping your employees achieve a common goal. Then it will be possible to say that this is a truly progressive company that was able to correctly apply the concept of MLM. It will be possible to call it a network marketing company, and not financial pyramid with empty promises, in which everyone works towards a common goal, and does not deceive and deceive consumers for the short-term profit of the founders.

Matthias Laudanum
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What 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 new wave popularity, 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 financial pyramid, a scam and deceit.

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 your own business by creating a wide network of product consumers.

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:

1. 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.
2. 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).
3. Avoid fake goods. In the process of resale of goods, it is possible to substitute it and falsify large quantities. The MLM company works directly with the end consumer, so the likelihood of product falsification tends to zero.
4. 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

To begin with, I will tell you about the general principles of the work of 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 is why this type of marketing is called network marketing.

Having its own warehouses and delivery services, the network company delivers products to the warehouse, and then these products are delivered to the offices that the company's partners (distributors) have 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 of professional 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 will say right away that there is a concept " 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, are of higher quality in comparison with their usual 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 everyone 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 via the Internet is a new trend that is gaining momentum every day.

How to find a client in your mlm structure via the Internet - 5 proven ways to attract:

1. 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.
2. Thematic forums. On the earnings forums personal growth you can also find future companions in your layered structure.
3. 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.
4. 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.
5. Lead generation. This method consists in creating a flow of contacts (applications) of potential customers whom 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	The unlimited possibilities of the 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 characteristic signs of dishonest firms:

Here they are:

1. 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.
2. The product, as such, either does not exist at all, or has no market value outside of this organization.
3. There is no documentary confirmation of the fact of receiving money and other relevant documents (invoice, contract, checks, etc.);
4. You are told that you will receive money from number of attracted participants rather than from the turnover structure.
5. 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.

Question 5. How to choose the right company to start in the MLM business?

To do this, pay attention to the following criteria:

• Lifespan on the market. Do not cooperate with companies that are less than 5 years old on the market.
• Demand for products. If these products are really in demand and have regular consumption, that is, they are often consumed. For example, cosmetic and household products, food.
• The site of the company. How convenient, functional and presentable it is.
• Training and support. Is there any, how professionally the mentoring system is built and whether you like it.
• Marketing plan. Is it fair and what type does it belong to:

1. Stepped with branch.
2. Matrix.
3. Linear (single-level).
4. Binary.

It is best if this is a stepwise marketing plan with a branch. Such an MP is used by most reliable companies, such as Oriflame.

9. Conclusion

Friends, I myself stopped doing network marketing, not because it doesn’t work or it’s a scam and deceit, but because I found something I like and now I’m also doing business on the World Wide Web.

I have friends who have succeeded in SM, bought more than one apartment on it, travel regularly at the expense of their company and live a free and fulfilling life.

Did you know that you can literally earn millions of dollars in network marketing?

Watch the video below about the richest networkers (married couple):

I still think that the MLM industry is a good opportunity.

If you are an ambitious, energetic and sociable person who likes to communicate with people, contribute to society and at the same time make good money, then you will have no doubts about starting in SM.

I hope, dear readers, that with the help of my article you have understood what network marketing is and learned about its pros and cons.

It is very important for us if you leave a comment on the article and share your experience on the topic.

Thanks in advance, good luck and great earnings! What is business consulting full review concepts and recommendations on how to improve your business in 5 steps + an overview of the TOP-3 consulting companies