Articles mlm. The Whole Truth About Network Marketing

What is network marketing, what are its pros and cons? Which MLM business companies are popular for 2018? How to make the first money in the network business?

Hello, friends! This is Alexander Berezhnov, an entrepreneur and one of the authors of the HeterBober.ru website.

Today, the network marketing industry is gaining a new wave of popularity, and the development of the Internet plays a significant role in this.

However, this concept is still controversial in society. Someone calls network marketing almost the only way to open their own business without investments, others are sure that this is all a financial pyramid, a scam and deception.

Some time ago I myself was engaged 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 considering their 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 you will also find out in which companies it is better to start 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 in the store on the counter, its cost rises by several thousand percent! It's all the fault of intermediaries - large and small wholesalers who sell chewing gum to each other.

But it doesn't 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 a product is spent on advertising and product promotion.

Thus, we buy Orbit packaging for 20-50 rubles. Yes, this cost, of course, includes the manufacturer's own trade margin, but intermediaries also want to eat. So it turns out that the end consumer suffers, who overpays exorbitantly.

About a hundred years ago, people began to think about the problem of unreasonable markups of resellers and intermediaries.

Network Marketing Idea

To make the process of promoting goods (services) more convenient, cheaper and faster. Remove intermediaries and expensive display advertising from the promotion scheme.

This can be done if people themselves tell each other about the product of the network company, and their motivation will be the percentage they will receive from the sales of the MLM company's products.

But you won't earn much on interest. Therefore, multilevel marketing allows you to build your own business, creating a wide network of consumers of the product.

It is assumed that a person who has developed his network structure will receive a percentage of the total turnover of his structure. This is how he can create himself tens of thousands of dollars a month.

To learn how you can create such income in mlm, be sure to watch the video below. This is a cartoon about Pablo and Bruno - ordinary guys who have chosen different ways of gaining financial freedom, and both wanted to become millionaires. Let's see what they did.

Network marketing was designed to solve the following tasks:

1. Reduce the cost of goods for the end consumer. This can be achieved by eliminating the expensive standard advertising on radio, TV and the Internet.
2. To speed up the process of delivery of goods to the final consumer. Achieved through well-thought-out logistics (a network of own warehouses in different cities and countries).
3. Eliminate product counterfeits. In the process of reselling a product, its substitution and falsification of large quantities are possible. MLM company works with the end consumer directly, so the likelihood of product counterfeiting tends to zero.
4. Motivate company employees with money and business opportunities. In multilevel marketing, there is an opportunity to make good money and build your business from scratch.

2. How Network Marketing Works

First, I'll tell you about general principles the work of this industry.

The manufacturing company has its own factories for the production of goods.

She sells these products without stores, the products are distributed thanks to a built-in recommendation system. In everyday language, this system is called "word of mouth".

A lot of people like this principle and are happy to buy products from the company.

Now all orders of an MLM company can be placed via the Internet, and paper catalogs popular some time ago with the development information technologies fade into the background.

The client is using the product 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 partners to the business 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 at home, which is very convenient.

Now I will talk about the features and principles of multilevel marketing for the manufacturer of goods (company), for the end consumer (client) and for a 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 promoting 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 (they are sometimes called independent entrepreneurs) and building a system of professional training (mentoring).

The business of the enterprise ultimately depends on the high-quality transfer of the MLM idea from person to person.

From the point of view of the consumer

It is convenient for the client to receive goods with a quality guarantee, he likes affordable prices, samples, catalogs. Direct selling companies often have exclusive products and accessories that cannot be found in regular stores.

From the point of view of a distributor (entrepreneur)

People looking to start a business without investment can do well here. After all, the whole system has already been built, the market is formed, the majority large companies already on the ears of the population. 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 United States.

In 1945, American entrepreneurs Lee S. Mytinger and William S. Casselberry started their own businesses, becoming national distributors of Nutrilite Products. The principle of recommendatory (network) marketing became the basis of their activity.

Further, in the late 1950s, two companies were created in the United States: Shaklee and Amway. In Russia and the CIS countries, people are widely familiar with Amway products and the specifics 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 goods, 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 was 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, multilevel 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 build your business in a network marketing company now not only through face-to-face meetings at home or in a rented office, but also via the Internet, using the capabilities of Skype, electronic almost and social networks. Advanced entrepreneurs create their own websites.

This is exactly how now "networkers", as it is customary to call distributors of products of multi-level companies, are actively processing the online space in order to expand the composition of members of their group (branch).

However, the development digital technologies gave rise to the other side of this industry - the emergence of fraudulent companies and financial pyramids, which, under the guise of investment funds or simply respectable mlm firms, involve honest people in 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 today many people associate network marketing with a pyramid?

In continuation of the previous point, as promised, I will open the “pyramidal question”.

The association with pyramids, deception and fraud in people arises rather from inexperience.

I must say right away that there is the concept of "classic marketing" and "network marketing", although it is very arbitrary. For 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 promoting. As a result, all this can be attributed to the concept of "classic marketing".

2. Network Marketing

This is just an unusual way of distributing goods for the bulk of people. It, as you know, is also called multilevel 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 a higher quality in comparison with their usual counterparts.

The model of distribution of goods, which is unusual for many, instills fear on those who have heard about all sorts of deceptions or have already fallen into financial pyramids themselves.

Dear readers, remember!

Network marketing has nothing to do with a pyramid scheme, cheating or illegal activity.

Associations with the pyramid arise because both in the pyramid and in mlm you need to attract people in order to earn money.

Only in the first case you get money for the "heads", that is, your earnings depend on the number of attracted people who invested money in the pyramid, and in the second - the income depends on the turnover that the clients attracted by you will make.

That is, if we are talking about normal multilevel marketing, you can subscribe at least 1000 people to your structure, but if they don’t buy anything, then your income will be zero.

In the pyramid, the opposite is true, where each attracted person is obliged to make a contribution, usually quite substantial (from $ 500 to $ 5,000) and you are guaranteed to receive a percentage of his money, and your client will not receive a real product. He pays just for the opportunity to make money by attracting new "victims".

Below, in answers to frequently asked questions, I 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 there cannot be. Building your own 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 a group (community) here on the topic of earnings and self-development. The people who entered will be your potential clients. You can also "spam", that is, send messages to everyone, but then you run the risk of getting blocked by the administration of the social network.
2. Subject forums. On the forums about earnings and personal growth you can also find future companions in your layered framework.
3. Contextual advertising. You can create a website and customize to it contextual advertising thereby attracting targeted visitors. There is already an article on our site,. However, this method can be very expensive for such a purpose.
4. SEO - promotion. By analogy with the previous method, you can create 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 get people loyal to your activity.
5. Lead generation. This method consists in creating a stream of contacts (requests) 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 requests from potential customers (leads) and attract them to your MLM company.

You can use these and other ways to attract potential members from the Internet to your network.

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 are furiously campaigning for mlm, and there are those who are afraid of "setevukha". For clarity of the picture, I have compiled a corresponding table that reflects almost all aspects of the SM:

Pros and cons of network marketing:

If you have not yet decided whether it is worth doing CM, then the criteria described in this table will help you once again understand whether it is yours or not.

7. Rating of network companies in Russia - a 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 by far the leaders among 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 the middle.

In any case, I am sure that you have heard, if not about all of these companies, then about most of them for sure.

I consider them to be reliable and it is with these companies that I advise you to work if you decide to start a network business.

8. FAQ - answers to frequently asked questions

I am often asked these questions, and here I cite them with the answers as the most popular.

Question 1. Should a beginner start his business with network marketing?

Yes, it is, 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 period of lack of money. I also advise you to analyze your strengths and weaknesses, objectively assessing their capabilities.

But if you get tired of communicating with people and it is hard to endure refusals, then you better not rush to rush into this pool with your head.

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

To do this, find 2-3 clients and simply sell them the products of your company, having previously registered with it as a partner.

Then you will feel the "taste" of the first money. Perhaps it will be a very small amount: from 100 to 1000 rubles, but this will already be your money earned in direct sales.

If you want to get a more serious amount, then find 3-5 people who are planning 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. How and how can you attract people to network marketing today?

Today, as always, people can be attracted to network marketing with the idea of ​​earning prospects, creating passive income and a free (flexible) work schedule.

The quality of products and the range of direct selling companies is constantly growing, so it is no longer so appropriate to say that we have high quality products.

But if you show the convenience of working with the company's website and the possibility of doing business via the Internet, it will definitely not leave your potential partners indifferent.

Question 4. How to distinguish network marketing from a pyramid scheme?

It is no secret that some fraudulent companies defame respectable MLM enterprises and disguise themselves as them.

How to distinguish fraudsters? There are some characteristic signs of dishonest firms:

Here they are:

1. Unreasonably high entrance fee. Typically, this is from $ 100 to $ 5,000. It is from this money that remuneration is paid to the "distributor".
2. The product, as such, is either absent altogether, or has no market value outside this organization.
3. There is no documentary confirmation of the fact of receipt of money and other appropriate documents (invoice, contract, checks, etc.);
4. You are told that the money you will receive from the number of participants involved rather than from the turnover of the structure.
5. The main point in the work of the organization is the emphasis on quick earnings , 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 deception and legality of doing business.

In our country, since the advent of network marketing to the market, many people do not understand at all how it works. They think this is an activity for school girls or mothers on maternity leave who simply have nothing to do. In this article I want to dispel all your myths about network marketing and show the reality.

Today in our country there are a lot of companies that operate on the MLM market. And not all of these companies are promoting this business correctly. I cannot say why this is happening. Distributors may create the wrong job.

When I hold meetings with networkers, I am often amazed at the rules in some network companies.

For example, the fact that you need to build a structure for only one branch. And then, when this branch grows, start building the second one. But in this way, partners begin to earn normal money only after a few years.

Or - you do not build a network yet and you will not be able to receive money until you reach a certain level of personal turnover.

Our hair stands on end from such rules in companies.

Let's take a look at what network marketing is. And first, let's turn to the all-knowing Wikipedia. And Wikipedia tells us that

Network marketing(or multilevel marketing; English multilevel marketing, MLM) is a concept for the sale of goods and services based on the creation of a network of independent distributors (sales agents), each of which, in addition to selling products, also has the right to attract partners with similar rights. At the same time, the income of each member of the network consists of commissions for the sale of products and additional rewards (bonuses), depending on the volume of sales made by sales agents attracted by them.

Thus, we see that networking is not about shopping with company products and checkered bags. This is the creation of a network of partners and consumers, from whose purchases we get our percentage.

Now imagine that you have built a team of ten people who can buy products for 20-30 thousand rubles. per month. Of course, the amount here is small and many people at this point just "Merge" out of business, because they do not see the huge amount of money at the very beginning. I hope that you are not one of those people

Now imagine that you did not merge, like the majority, at the first stage and built a structure of a thousand people! This number of people can actually buy products worth several million! I know this from personal experience.

In this case, your check will be from 100-200 thousand rubles per month! And if you do not run away from business at the first stages, you will definitely have such a result.

Network Marketing Myths

Only the top earns

Probably, if you do not think so yourself, you have heard such an objection. Yes, many people (even those who are in network business) believe that only those who came at the very beginning make money.

But I know dozens of examples when people came to companies five to ten years after the company was founded and blew up the business, starting to earn even more than those who have worked in the company for several years.

Indeed, in the network business, people get from the turnover of goods, and not from how many people were able to connect. And if you are able to create a team that will be able to create a large turnover in the market of the country, or abroad, then you will earn decent money.

This is a beggar business

Oh, how long it takes to explain to people that network marketing is not a living for the poor and that huge money is spinning in this business, which brings huge incomes to partners of network companies.

Yes, I agree that completely different people come to MLM. And those who earn a lot and those who do not earn anything. And of course those who are poor are the majority. Well, because, in principle, they are in the majority in our country. And so one gets the impression that only the poor are here.

But I assure you that it is not so. And there are a lot of people who have their traditional business with an income of half a million, and start their way in network marketing, because they see great prospects in it for their development and replenishment of the wallet)

Therefore, before making a list of acquaintances and those people whom you want to invite to the team, do not decide for people whether they need a business or not. I talked about this in more detail.

We need to convince people

I must say right away that if you are going to convince people in the network business, then this will definitely not lead you to success. Because everyone whom you once convinced, persuaded, hypnotized, wakes up and think to themselves: "Damn, what for I did it at all, here I was divorced." And they will never answer your phone again.

In the network business, our task is not to persuade people to join our team, but the task is to convey to a person the possibilities of a product that he can use and save, as well as the possibilities of income that he can receive by recommending these products to people.

If you meet such an objection during your meetings, you just need to. After you answer it a couple of times, it will no longer drive you into a stupor.

It is necessary to sell here

This myth stems from a misconception about network marketing where people think it's just a direct selling business.

Yes, many networkers sell their products, but they do it either because they want to make extra money, or because of the wrong company policy, which forces them to buy products. Yes, there are such companies. Where is the obligatory personal trade turnover for large amounts and the amount that a person cannot consume himself. We don't have that.

But direct selling is just a super bonus for people just starting out in network marketing!

She just turned my brain and made me look at the world differently. I started to think about my life and it was at this moment that we got acquainted with network marketing. Now I am very grateful that everything in my life happened on time.

I hope this book will help you as much as it will help me. When you read it, write me a message - whether it helped you or not.

Well, our result today will seem small for someone, a dream for someone, but I think that for people who came to the network without experience and in such a short period of time - very worthy.

This income is in the region of 150,000 rubles. per month, a car from the company, travel, your own developing YouTube channel, a network of more than ten thousand people, recognition from the company, and much more!

Would you like such a result in the perspective of a year or two?

I will tell you 100% that if you do the right things, you will definitely have it!

By the way, friends! If you are looking for a really good business mentor who can lead you to any result, then I can recommend meeting my wife Yanina Eremeeva. She is truly a professional in the network business, the Top Leader of our company, and about 15 auto-bonuses have already been issued in the team. Including Mercedes.

In general, it can also lead you to any result! You can contact her here.

If you do not want to become victims of scammers, then you need to know exactly what an MLM business really is. Because here it is too easy to fall into the trap of a financial pyramid and end up with no money.

In this article, we will analyze how to distinguish a real MLM business from financial pyramids. And can you actually make money in MLM?

And to begin with, let's take a look at what the essence of MLM business is, and why people don't like it so much.

What is MLM business in simple words

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

It denotes one of the options for organizing marketing - a distribution scheme for the company's products. A classic business is when there is a store where people come to buy our goods. The online business option is when many people take our product and distribute it among their acquaintances.

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

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

Who invented MLM?

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

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

But here's the question. Why is it that "the people" do not like this very MLM and the network business so much?

Why MLM is so disliked

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

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

There are two main reasons for this.

Reason # 1 - Breaking the foundations of a relationship

Have you ever wondered why we (humans) recommend anything to anyone at all? Why would we tell a colleague at work where delicious sushi is made? Why would we advise a friend on which car to buy? After all, this, in fact, does not concern us.

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

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

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

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

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

Thus, MLM interferes with the fundamental set of unspoken laws of human relations (it is also called the "social contract"). And this destroys friendships, friendships and even family relationships. And for this, people do not like him.

Reason # 2 - Re-motivated zombies

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

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

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

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

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

And again, this leads to a split in friendships and family relations. That's why they don't like MLM. In the minds of people, getting into MLM is like getting into some sect. And the one who has fallen into the "trap" will soon begin to rewrite his apartment on some regular "Herbalife witnesses".

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

How much can you earn in MLM?

Networkers are very fond of this joke:

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

He approaches one of these dirty houses and asks a passer-by - why are they so beautiful in front of the house, but here they are so bad.

The passer-by replies - "And there, opposite the networkers live, who are engaged in MLM."

A man asks - "What are you?"

Passer-by - "But we don't believe them!"

The joke is funny. But, unfortunately, as in any other type of business, the majority of people employed in MLM have absolutely no income. A very small percentage of networkers have income comparable to the regular salary of a qualified professional. And only tenths and hundredths of a percent of all MLM employees make really big money.

How to develop correctly in MLM?

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

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

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

And most networkers eventually realize that MLM is not the option to which they would like to devote their whole life. Therefore, they go to other types of entrepreneurship. But they retain the skills that they acquired during their work in MLM.

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

How to distinguish MLM from a pyramid scheme

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

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

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

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

And such an organization is possible precisely due to the “virtuality” of the proposed product. It does not need to be transferred, stored. You don't have to use it at all. The main thing is to attract more and more new participants "for yourself".

How financial pyramids collapse

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

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

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

Here are some more indirect signs of a financial pyramid:

• Promises that you will not have to sell anything and recruit anyone.
• Mandatory monthly payments.
• The inability to personally check the quality of the product (or the poor quality of the product).

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

Therefore, pay attention to indirect signs, and do not get caught by scammers. Otherwise, they feel like fish in troubled waters on the Internet. Is it really possible to do a real network business over the Internet?

Is it possible to do network business over the Internet?

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

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

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

And if you really do not want to go to anybody for personal meetings, but work via the Internet, then you better get involved in affiliate programs. This is the same as MLM, but you just advertise a product and get a commission on the sales.

That is, MLM via the Internet is possible. And it is called - "earnings on affiliate programs." Take a look at my article, and a lot will become clear to you.

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

Conclusion

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

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

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

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

See you later!

Your Dmitry Novosyolov

Network marketing has been firmly established in Russia since the early 2000s. It gained wide popularity due to interesting conditions, as well as the absence of the need to visit offices. Today we will talk about what the pros and cons of network marketing lie in wait for clients who decide to take advantage of such an offer, as well as how to make money on such a business.

What is Network Marketing and MLM Business?

In simple words, network (or multi-level) marketing is a principle of cooperation, in which all participants in the process distribute the products of a certain company in their own circle of friends and acquaintances. This principle allows you to form a company on the Internet, thereby reducing the cost of premises and salaries of employees. Sellers of this type earn only a percentage of sales, so they are actively engaged in sales to achieve maximum results.

A multi-level system means that each seller can build a referral system of 6 levels from which he will also receive income, depending on the volume of sales.

The essence of the system is that there is a large warehouse of goods located in a certain city. Sellers order and pay for the product, after which they begin to sell it among their circle of friends. The principle is based on trusting relationships, so the more acquaintances and friends, the higher the earnings will be.

There are companies (for example, Amway) that combine classic and network marketing. That is, the company has hypermarkets with products, as well as a multi-level sales system.

An important difference between MLM resources is the quality of the product, which plays a decisive role. Few people will sell low-quality products to their friends, so the manufacturer produces only high-quality products, due to which the level of demand is constantly growing.

The history of the emergence and development of network marketing

Undoubtedly, the emergence can be considered a country that has been the leader in sales at all times - America. The understanding of the basics came when one of the entrepreneurs saw that one acquaintance offered the product to his friend, and he was willingly interested. This became the basis for the detailed elaboration of the concept.

The idea became popular, because there were several reasons for this:

• Entrepreneurs were able to offer a lower cost due to the absence of the need to rent premises and hire personnel;
• Buyers learned about new products firsthand, because all sellers were friends and made good discounts.

Of course, the companies have become serious competitors to global brands. But, over time, such companies became very annoying, and their number grew wildly. People began to get tired of such annoying friends, sales dropped significantly.

Today, working in such companies implies frantic activity, otherwise it will simply not be possible to build a career for yourself. You need to be able to work not only with friends, but also to promote goods to the urban and regional market segment, otherwise there is a risk of being left with nothing.

How network marketing works

The system is built in such a way that active people will always earn money, even if they do not have their own sales. By actively developing a multi-level network structure, a person begins to receive a percentage of the sales of people brought into the business. It is extremely difficult to build up the base in this way. The binary system is difficult to master the basic mechanics. But, if you managed to do this, then in the next 3-5 years you can not worry about income and do what you love.

The multi-level system is built according to the following principle:

• The seller registers a newcomer who starts selling the company's products;
• For each sale, the referral and the seller receive a reward in a different ratio;
• If the referral brings a person under him, then the third person will receive the reward from the sale - the referral's referral, your referral and you.

And so on until the 7th level. Usually the percentage starts from 10% for the first invitee, and 1% for the 7th level beginner. In theory, this is a pyramidal system that has nothing to do with HYIP projects, because everything works efficiently and honestly.

The work is in great demand among students and mothers on maternity leave, due to its remoteness and the ability to develop through the Internet. But in order to achieve heights, you will have to work a lot and for a long time, otherwise you should not even start.

Pros and cons of network marketing

Each field of activity has its own advantages and disadvantages. MLM business has extremely negative and extremely positive aspects, due to which opinions are clearly divided among the population of the country. Let's talk about the benefits first.

Low barrier to market entry

Newbies are attracted by the low introductory amount. Often, in order to start working, it is enough to buy an item that does not cost more than 100 rubles. Of course, almost every student who is interested in MLM business decides to become a guru of this segment. But dreams quickly collapse when it becomes necessary to purchase larger goods, and earnings are not even enough for purchases. At this point, you have two choices - to borrow money and continue to do business, or to quit. Many refuse. Among those who remained, they leave after 3-5 months of work, when they understand that they cannot continue to engage in such activities.

Doing such a business presupposes a long formation in the market, and often a complete lack of development. Some "networkers" are in the same position for 2-3 years, after which at least some movement begins.

The ability to do business on the Internet

The fundamental factor for a category of people, deciding to go into the network business. The absence of the need to travel to the office and meet with the boss makes such a business extremely profitable in terms of personal discipline. But, self-control is not given to everyone. To achieve serious performance, you will have to work much more than in a regular job. Many people think - now I will work for a couple of hours and earn a couple of thousand dollars, and then they are disappointed when they find out that they need to work hard. This becomes one of the first reasons for leaving the business.

Remember: only activity and hard work will allow you to advance in this field, otherwise you will simply lose precious time and money.

Product quality

In most cases, chain stores provide better quality products than those of large hypermarkets. This strategy allows you to save on storage space, due to which special attention is paid to the quality of the goods. This concept allows us to highlight several advantages at once, such as:

• High quality, which speaks of the professionalism of the company;
• Low price due to lack of payment for premises and staff salaries. The cost includes only a percentage of sales to distributors;
• Supplier reliability. There are all the necessary regulations, confirming the quality standard, as well as compliance with regulatory and sanitary conditions in the manufacture of products.

Quality is a fundamental factor that directly affects the further promotion of a brand. How better product, the more likely it is to enter the global market and compete with eminent companies.

Educational programs

Each company is aimed at the maximum number of sales of its own production, therefore employee training is one of the most important aspects stable sales. Companies are hiring the best business coaches, marketers in order to provide new employees with all necessary knowledge sales.

The service is built in such a way that every 2-3 months (depending on the company) trainings are held, where young businessmen are taught to conduct transactions correctly, as well as to sell in large volumes.

It is worth noting that the quality of the training of the coaching staff is at a really high level, since after such training, 8 out of 10 begin to conduct active sales.

Part-time employment

Another plus for such a business. Everyone chooses for himself - to work 12 hours or 2. The convenience of such stores is that for many it is an additional income that comes in addition to the main job. Most often, such work is not the main source of income, but it allows you to save money for the realization of a dream or goal.

Depending on the time allocated, income varies greatly. But, a combination of factors plays a role here, such as:

• The intensity of the work in the allotted time period. The more systematically the work is done, the more effective the result;
• Actions are directly related to sales. You can engage in empty and useless mailing for two or three hours, or you can, for example, start cold calling. In both cases, there will be radically different indicators.

It should be understood that the time chosen for work should be profitable, otherwise the approach should be changed to increase sales. Freedom of a multitude of people makes idlers who, instead of starting to deal with business in a more disciplined manner, stop doing anything at all. I don’t have to explain the consequences of such inaction.

affiliate program

You can make money not only on self-sales. It is enough to build a referral system that will bring stable passive income. Partnership programs is offered by almost every network company to increase the number of active employees, and gives you additional motivation to attract people.

Affiliate programs assume a percentage of the income of a person who registered under you. This means that for a 1st level referral, you can earn 5-10% of the total income, depending on the conditions of a particular company. By attracting 2-3 referrals of the 1st level, you can eventually get a good profit. After all, each person can bring several more friends for the same income, and you will earn deductions from these people. And so on until the 7th level.

Of course, on the surface everything looks easy and simple, and it would seem that it is not such a big problem to drag people in. In reality, this is not the case. People are extremely reluctant to go into such projects. According to statistics, only 1 out of 150 agrees to participate in the MLM business, and every year the number is decreasing. First of all, the general decline in interest in such projects affects. This is due to the reluctance of the sellers to spoil the relationship with their family and friends, but more on that later.

Anyone can earn on such deductions - from a student to a pensioner, the main thing is to choose the right company, and also correctly describe the product to your friends.

This is where the benefits of networking business end. Next, we will analyze the key shortcomings of the system, because of which people have a negative attitude towards such firms and do not want to participate in projects.

Tainted reputation

The principle of trusting relationships is built on the recommendations of only the necessary. For instance:

• A person wants to order tasty and high-quality food, but does not know where in his city such an institution can be found;
• He calls a friend and asks, and in return receives a quality recommendation;
• On the advice of a loved one, he orders and is satisfied with the result.

Network marketing should be built on this principle. However, the end result of such a system is the imposition of unnecessary goods.

Why would a man buy facial cosmetics? Or a floor cleaner every week?

Situations reaching the point of absurdity are capable of instantly destroying any friendship, no matter how strong it is.

The recommendations are based on psychology, because this is domination over the personality. When advising a person something, you are, as it were, expressing your own opinion, to which he must listen, otherwise there is no point in such help. Therefore, some people try to give advice on any occasion, and are very repulsive with such actions.

Unwillingness to listen to advice leads to a lack of sales.

Moral burden

Constant contact with a large number of people requires high stress resistance, and if the business is about low-quality products, then also iron nerves. Moral load strongly influences sales activity. This is one of the main reasons for leaving the business.

The mood is especially acute. If in office work the mood is not of key importance, because it does not affect the statistics of work, then in independent work it is one of the fundamental factors.

Keeping yourself in good shape is especially difficult when there is no development. In MLM business, the expansion process takes a long time, and some are unable to wait this period of time. Because of this, debts begin to form, because you want a luxurious life now, and as a result, there is a gradual refusal from work.

It is important to be able to form a persistent character and cold calculation that does not change the vector under any circumstances. Only this quality will allow you to experience difficulties and calmly relate to victories, continuing to move forward. Only 5% of all participants achieve heights in this business.

Few succeed

As mentioned above, only a hundredth part is able to achieve success. This is due to factors such as:

• Purposefulness;
• Willingness to work for results in the long term;
• Stress resistance;
• Hard work;
• Ability to adapt to work in any conditions;
• Positive attitude.

And these are just some of the criteria you need to build a successful MLM career. Ambition must prevail, otherwise this activity will quickly get bored.

Selling is the hardest business and the most profitable business. Therefore, it is necessary to learn this from an early age, because the correct description of the product can interest anyone.

Slow business growth or lack of it

Running any business is complicated by its promotion. Growth occurs only after 3-5 years of vigorous activity, with the condition of a competent strategy. Therefore, there are so many people in the world who have given up own business to the side official work with a stable salary. And this is also partly correct, because not everyone is able to psychologically endure the lack of growth, especially with large investments.

Personal self-determination and motivation helps to stay afloat.

If goals are not set, or set incorrectly, then it is almost impossible to achieve success. It is necessary to clearly see the ultimate goal, then it will not be difficult to achieve heights.

Try to systematically distribute the development strategy, and also take the time to promote. After 2-3 years, you will see the results of your fruits and you will be pleasantly surprised.

How is network marketing different from classic marketing?

The concept of work is fundamentally different, because in both business options an independent approach is required.

Classic marketing is built on the following principle:

• First you need to find land for construction. She is selected according to a number of criteria. For example, the average daily traffic and the number of competitors in a certain radius;
• After that, the construction is coordinated with the state authorities;
• The building is being erected and the interior decoration begins;
• Groceries are purchased and a store opens.

You need to understand that the cost of such an event starts from 3 million rubles (at the very small shop) and no upper bar.

And how many problems appear, it is definitely impossible to count on one hand. Ultimately, after opening, the store may simply not pay for itself, which will lead to large debts and the impossibility of selling such a business. Thousands of stores across the country are closed every year due to lack of liquidity. Let's say grocery store was selling goods at the same price. A competitor opened up nearby and significantly reduced the price. The first store cannot lower prices lower, since the purchase price is too high. Against this background, it will have to close, with the sale of the remaining stock at the minimum cost, in order to somehow pay off debts.

It's much easier with network marketing. In one place, a warehouse is rented or redeemed, from which goods are dispatched to the regions. Nothing else is needed. Further, people themselves are interested in buying more goods, and then selling them and making a profit.

Companies regularly hold contests and give out valuable prizes by saving on salaries and premises.

The more sales an employee makes, the more valuable prizes the firm rewards him with. For example, NL-international gives the best sellers a Mercedes-Benz C-class. Some donate cryptocurrency for additional income in case of growth. Quite a good gift, agree?

Of course, at the initial stage, there is an acute question of where to get people. However, with the successful completion of the trainings, it becomes clear that an active life position and a desire to work are simply required. Those who are constantly developing, achieve really outstanding results and serve as an example for others.

How is network marketing different from a pyramid?

In order to understand the differences, you need to understand what HYIP projects are. is built in such a way that all the participant's income comes from the contributions of the next one. Thus, the project fails when new people stop coming. Absolutely all pyramids are built on this principle, which today is tens of thousands. If you manage to get to the very start of such projects, you can earn some good money, but the risk of losing everything is too great.

Network marketing is built on the principle of sales and has nothing to do with pyramids.

The system is designed in such a way that the interest for the attracted is calculated based on his sales, and not investments. Therefore, such companies cannot go bankrupt due to lack of deposits. Sales are of key importance, because on the basis of own and attracted sales, earnings are formed.

Rating of grid companies

1. Oriflame

One of the leaders in sales of cosmetic products in the Russian and CIS markets. A feature of the company is a huge client base that has been generating income for over 50 years. One of the oldest companies that keeps afloat due to high quality and best sellers... The company's total turnover is 5.8 trillion. dollars, which is an extremely high figure even for a classic business.

2. Amway

The successful combination of classical and network marketing has created a world-renowned company. You can find a hypermarket of the company in almost any large city. It will not be difficult to become a member. To do this, it is enough to fill out a questionnaire and achieve trade turnover in 9.5 thousand rubles, after which a discount and withdrawal will become available Money... Experienced salespeople have been making decent money selling household chemicals for home and business for 10 years. The company's turnover in 2019 is 8.2 trillion. dollars.

3. Thiens

The company ranks 98th among the MLM business. The product quality is at an extremely high level. Despite an average turnover of $ 118 million, the company is active around the world. The number of sellers around the world reaches 20,000 members, which allows products to be sold almost immediately after manufacture.

4. Faberlik

For more than 19 years, the company has been successfully selling products all over the world. The multilevel rank system allows you to earn additional income. So, reaching the title of "Director", you can receive up to 60,000 rubles as a gift from Faberlic. This motivation is present at every rank, so employees are quick to meet conditions. The total turnover of the company is 570 million dollars, and it is growing every year.

5. Avon

Another world-famous company with an annual turnover of $ 490 million. Cosmetic products are of high quality, because most of the products are made from natural ingredients. This brand is used not only for private purposes, but also for fashion shows, as well as for makeup in films.

The company has earned this reputation through continuous development and providing the best conditions for its employees.

6. NL

Dietetic products are widely known for this Russian company... The number of participants in the first year already exceeded 1000 people, and in a couple of years it has grown 9 times.

The products are distinguished by their natural composition, but the high cost significantly complicates sales. Today the company's turnover is 320 million dollars a year, which is extremely high for the Russian segment of the market.

How to choose a company to start and make money on network marketing?

The choice is based on your own preferences. For example, if you love cosmetics, then one category of companies will do, if the products are completely different.

It is important to remember about the entrance, which can be quite expensive. To start, you can choose a company with a minimum contribution to try yourself in this business. Having joined the system, you yourself will understand in which direction to develop.

To make good money, you need to have an active life position and hard work. Otherwise, you will quickly abandon such an undertaking, because good money begins to come only after 3-5 months.

MLM projects do not carry anything bad, but, on the contrary, help to save money on quality products. To buy or not is everyone's choice, but it is worth taking a closer look in any case. Earnings directly depend on a person's ambitions, so if you decide to start earning - do not hand over in the first year, and everything will work out.

Good day, friends. One of the topics that have not lost their relevance over the past decade is network marketing. Why is this the main source of income and a whole element for some, while others leave with an unpleasant aftertaste of failure?

It's simple. Network Marketing is a job. In order to receive money and become successful in this niche, you need to master it, gain experience and not give up after the first failure.

Today I will talk about how to master a network business: how to start correctly, what is needed for a quick start, and what are the main stages a beginner should go through.

The road will be mastered by the walking one. It is impossible to achieve success without failing and making a couple of three mistakes. After all, it is they who make up the lion's share of our experience, making us stronger and more prudent.

However, unfortunately, not a good reputation owes exactly to those who failed and left without trying to correct the mistake.

Therefore, ask yourself the question, are you ready to go towards your goal and endure small failures, for the sake of great success?

If yes, then we continue.

A quick start for any beginner consists of several steps:

1. Acquaintance with the company and the product.
2. Making a list of warm contacts (potential customers from the list are familiar to you people).
3. Education through specially designed programs, trainings, courses and webinars.
4. ... (First sales, attracting new partners).

If you want to get instructions and tools for making money in one bomb project in 2020 (up to $ 200 for 1 evening) - go by this link.

Acquaintance

Getting to know the company is primarily done through getting to know the product.

Each networker must be an independent consumer of the products that he will subsequently offer. No matter how hard you try to praise your product, all this will be in vain if you yourself are not convinced of the benefits of your company.

As a rule, large MLM companies produce really high-quality and unique products. Only after trying them on yourself, you can be confident and convincing in your recommendations, justify the price and demonstrate products from all sides of quality and efficiency.

Also, a successful networker must delve into marketing and how the company works. Know the features marketing plan, understand the goals and objectives.

Thus, you not only have an incentive and control your income, but you can clearly and clearly explain to a potential partner:

• what advantages await him in the team;
• what privileges are received by partners;
• to acquaint with the prospects and results of active work.

Having studied this industry thoroughly, trading agent can competently operate with terms, argue his position and work with objections. This will make him a qualified person in the eyes of clients and increase the chances of success.

Making a list

The main success of any organization is concentrated precisely in customer base... This is where the first questions of inexperienced networkers begin: "Where to find clients?", "Where to find people?" and everything in that spirit.

First, answer a few questions:

• Are you a living person?
• Do you have family or relatives?
• Have you studied at any institution?

I am sure the answer is yes everywhere. So you have a huge list of potential clients. All acquaintances, friends and relatives are the best and most attentive clients.

This is your chance to gain experience, learn how to formulate a proposal, and master the skill of live sales in general.

Such a list is usually called warm contacts; you can safely and without hesitation enter everyone with whom you had any contacts. This could be your first teacher, neighbor, ex-partner, personal hairdresser, sister, brother, friend, or anyone you know.

It is very important to make the list without bias and personal judgment.

At this stage, you should not think about whether this person wants to listen to you, whether he needs this product and whether he has the opportunity to purchase it. Your job is not to miss a single opportunity.

Having spent your time creating contact with each of the list, your efforts will pay off with a certain number of partners, and let it be 1 person out of 10 - this is the result, and therefore, the beginning of success.

Education

Many people think that it is enough to take products and go to promote. They are very wrong.

It is important to understand that unique products require a unique approach. This is not bread or cigarettes that people will buy anyway and even if the economic situation worsens.

On top of that, network marketing has a controversial reputation.

Many people, hearing only one word "network", begin to refuse, being convinced that this is a divorce, fraud and provocation.

The ability to win the favor and attention of a person, convince him of the opposite and recommend products in such a way that he would want to buy it for himself or also build a business skill. But this is not difficult.

MLM companies provide a whole course of trainings and webinars.

Do not neglect the opportunity to gain this invaluable experience and new knowledge. In such classes, you will have the opportunity to communicate with people who have reached significant heights in the industry. Learn about where they started and how they came to what they have. Experienced marketing specialists will share techniques for direct and virtual selling, teach you how to reduce the number of bounces, how to get the customer interested, how to deal with objections.

Follow a few simple steps:

• get a notebook for notes and notes;
• attend all training events;
• read thematic material;
• watch successful networkers work.

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Activity

Now that you have sales skills and a list of warm contacts, get to work.

It's simple - follow the marketing principles that you learned at the trainings, use personal experience product application, be kind and confident.

Remember, everyone has failure. Do not step back, try and you will succeed.

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