What is network marketing: advantages and disadvantages. The whole truth about network marketing

* The calculations use average data for Russia

It’s unlikely that anyone now doesn’t know what MLM is, aka network marketing, from the 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, distributing services in this way is not entirely convenient, so this principle usually applies to the sale of any goods. In civilized countries, where MLM originated a long time ago, and then through thorns came to an adequate organization of its work, there are special laws that regulate this very specific method of product distribution, which has its own unpleasant characteristics. In the same country, no similar legislative acts were found, and when applied to the Russian mentality and economic situation, this had an 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 they began to implement it crookedly, and in Russia, in general, there was a particularly obvious stratification of the “top” and “ referrals”, when the former, rather 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 sales are carried out by attracted employees 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 what is built is not a network of interdependent and equal participants, but rather a pyramid, at the top of which the leader has good income, and employees at the very bottom are forced to resort to everything possible ways and exclusively at your own expense in the sale of goods. They are proudly called distributors, less often sales agents, and therefore the latter consider themselves 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 failed. However, at present, people are entering 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 primary problem of many modern MLM companies, although from the outside it may seem that the company has its own corporate style and employee support. In fact, everything is different - it’s just marketing... aimed at its own employees in order to deceive them. Moreover, it came to the point that a very negative image was created for network marketing, and on both sides at once - and the population disliked the meticulous referrals, trying to almost forcefully force the purchase of their miracle powder, and the disappointed referrals themselves, who spent all their savings and a lot of time, Having sat surrounded by purchased vacuum cleaners and understood the essence of the deception, they began to quite naturally be indignant against such a marketing concept. It all started back in the fun 90s, when Zepter pots and Herbalife dietary supplements appeared, then the unprepared market saw unreasonably expensive Kirby vacuum cleaners, and currently the negative image of network marketing is supported by a huge number of Chinese companies that operate exclusively in Russia and some other countries. countries, because in China they give a serious sentence for MLM imprisonment. In connection with all this, a company that decides to engage in direct sales and MLM in particular will be forced to face a huge number of problems and mistrust of both consumers and potential employees. Although many of these organizations are thriving to this day, using the same dishonest methods of selling their miracle goods, because a certain contingent of people are not mammoths and 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 selling 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 in large manufacturing companies, but at the same time producing a mass consumer product. If we don’t take long-suffering vacuum cleaners into account (because trading equipment is generally a more complex process), then most often through MLM they sell cosmetics, non-medicinal products that are presented as medicinal supplements (dietary supplements) and other pans. That is, this is a product that can be bought, in general, spontaneously, without planning the purchase initially.

So, the owner of the company produces a product and decides that cooperation with distributor companies, retailers and other usual market participants is not profitable for him or is simply impractical, and it is much easier to use the direct sales method. An 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. In a simple case, a sales agent receives a percentage of products sold, often has a small but fixed salary, receives all social benefits and is fully employed by the enterprise. He's protected. In a company that practices MLM, the sales agent quite often does not even get a job, but is simply listed as an external employee. 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 actually engaged in illegal entrepreneurial activity, because it’s unlikely that any of them, after starting work in an MLM company, go to register as individual entrepreneur and at the same time I am 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 staff, to whom she has to answer and generally 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 the vast majority of companies that work on the principle of network marketing require paying for a shipment of goods out of your own pocket to get started. That is, the manager does not give it away 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 during the reporting period the agent did not sell anything, this becomes exclusively his problem, because he paid for the product with his own money, and is obliged to ( Yes, I definitely have to) buy a new batch. Sometimes in the first month they offer a “trial” batch, which costs him a little less, but subsequently the amount increases. So it turns out that the employees themselves buy the goods. “Black” MLM companies make money from this. In principle, they are not interested in promoting their product to the masses, they do not need to engage in marketing in general and maintaining the image of the company and product, because income is generated exclusively from sales to their referrals. This is how, in general, the implementation process takes place in “normal” MLM companies, the only difference is that a normal one tries to push a product onto the market and support its employees, and does not make money solely at their expense.

A logical question is - 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 advanced cases, after 3-4 months such people simply leave. This is true, although there is a percentage of those who are confident that “from next month everything will be very good,” but in most cases the income is generated by neophytes. A huge number of students, housewives and other similar elements want to find themselves simple work with a flexible schedule (and you don’t have to sit in an office with a nasty boss), for which you would also be paid well. Network marketing promises it all while 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 will simply pay once and then leave; anyway, in the new month there will be more people hungry for easy money.

A normal company (of which Russian market practically no) acts differently. The founder attracts direct sales specialists to his staff, formalizes them in accordance with the Labor Code of the Russian Federation, and then instructs them to find people who will also sell goods under the same conditions. This way, similar rights are formed for all network participants, 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 obliges anyone to buy the product 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 the founders are experienced and competent people who are engaged not only in sales, but also in training new employees.

It may seem that providing employees with free (and in a normal company it should be free) training, 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 generally goes very well with MLM, but due to the fact that TQM (total quality management) is focused on the long term and requires a lot of investment, which, although it will pay off many times over, is not very widespread soon. 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 economics good ideas), because all this will lead to an increase in the organization’s income, and in the end it will be possible to receive even greater profits, but only in an honest way. Unscrupulous entrepreneurs need to remember that this will allow them to earn, albeit a little later, more money, and the company will enjoy a good reputation among the population, and therefore 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 products. Unpopular products can sometimes be sold only in this way, because several advertising laws that are inconvenient for a dishonest enterprise do not apply, but more often it is low-quality products that are sold through network marketing. Which are sold at a price that is sometimes several times higher than higher quality analogues. Of course, it’s easier here to deceive your employee, force him to buy something of his own, and then send him by hook or by crook to sell this something to at least someone. In particularly advanced cases, referrals at lower levels go so far as to simply call every apartment and literally try to sell their product on the doorstep. This method of selling has a number of disadvantages (any person with even a little understanding of 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 sell goods via the Internet; strictly speaking, the manager doesn’t care who or how the product is sold to, but given that a “black” MLM company focuses only on the number of its referrals (the more of them, the higher the income), then She hires absolutely everyone more often than always. And 99% of these people know absolutely nothing not only about marketing, but about the principles of simple trading in general. Moreover, MLM companies often conduct training on “personal growth”, “mastering sales skills” and other nonsense, which aims not at training, but at brainwashing. No wonder it's Russian Orthodox Church opposes network marketing companies - I realized that such companies form their own church with a messiah in the form of the founder. In general, the bread is taken away. And in many cases, this is true; during trainings, stories are told about successful referrals (most often fictitious) who eventually built their own 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 are really inspired by the idea, have worked for several months and still cannot afford to be disappointed, are similar to a gathering of witches and even more like a gathering of religious fanatics. Here it is impossible not to note the good psychological skills of managers and employees who have achieved some results (these are those who were able to attract many of their referrals), because not everyone can brainwash this way either.

As a result, the chain is simple - at the top is the manager, a little lower down are smart psychologists, even lower down are those who were able to do disgusting work with the wrong hands, and at the bottom there is a sea of ​​​​desperate people who believe that if you buy a product that no one needs every month and force it on everyone in every possible way, then success will definitely come. Due to the fact that the product is being sold, its price increases many times at each level of this rotten pyramid. Especially advanced cases, when in this chain there is no way to rise to a higher level, but you can only form levels below you. You don’t need to have an economic education to understand that at each subsequent level the price of a product will increase, and the end consumer (if there is one) will receive it with a markup of several hundred percent, or even more than a thousand.

Thus, a company that wants to engage in network marketing must produce a truly 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 your 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 by the positive experience of using it by the consumer. From here good reputation and demand for the product.

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

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But the most important thing is the high consumer value of the product, even if it is a completely new product on the market or even innovative. But it must be innovative not only in words. Next, the company itself must engage in marketing not only online. That is, there should be information about the product on the market, a good image of your product should be formed, presentations and some kind of advertising campaigns. Then the person will know that the Internet offer from the referral includes the sale of a really good, high-quality and proven product. If you have your own 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 personnel, then again, everything is described in the TQM concept. Then you can get people no less zealously serving the company’s goals, only not zombied by empty promises, but motivated by real results. And you need to constantly train people and, yes, do it for free. This is the company's own money.

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

Matthias Laudanum
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The number of distribution companies specializing in MLM is increasing every year. This is due to the fact that this business is profitable and quickly generates income. It’s easy to do without even leaving your home. If you study in detail the basics and concept of MLM marketing, excellent result can be achieved in 2-3 months.

What is network marketing

MLM business is a multifaceted concept that opens up many prospects. It implies the concept of selling services and goods, based on the formation of a network of independent sales agents who not only sell products, but also have the right to attract new partners who will be endowed with similar rights. The income of each networker is formed from commissions from product sales and additional remuneration (bonuses), which directly depends on the volume of personal sales of attracted sales managers.

History of Network Marketing

Karl Rehnborg is considered the founder of the MLM business. He developed ideas that later turned into an entire industry with huge multimillion-dollar turnover. In 1927, in the USA, Rehnborg began working hard on creating nutritional supplements. He distributed the developed drugs for testing purposes free of charge to his friends, who subsequently refused to take them.

After Karl realized that free things were not valued, he began selling dietary supplements: the results were not long in coming. Information about the drugs spread quickly, and the number of people interested in them increased. Karl Rehnborg could not independently satisfy the requests of all clients, so he had to come up with a new scheme. He invited his friends to provide information about dietary supplements, and on condition successful sales promised to pay commissions. The history of network marketing began with these events.

In 1934, the first big company California Vitamins. It operated a sales system in which the consumer of a product became its distributor. In 1939, the marketing company was renamed Nature's Sunshine Products, but the principle of drug distribution remained the same. Network agents independently attracted new clients to cooperation, advised them, drew up sales plans, came up with individual sales schemes, and offered to create their own network.

The MLM company fully provided networkers with goods and paid commissions on time. This is how a new definition appeared in MLM - single-level marketing. The business story did not end there: a new round was set by the American Way Corporation (abbreviation Amway), created in 1959 former employees Nature's by Jay Van Andel and Rich de Vos.

What is the merit of these people in the development of MLM business? They began to sell not just one product, but several. The list of products offered to consumers has been expanded food additives, chemistry for household and household goods. Soon, network marketing companies appeared on the world market. They began to operate successfully in Russia, China, and England. Their importance has become enormous both for people and for the economies of many countries.

Types of Network Marketing

The MLM business is developing rapidly, and its varieties are becoming more diverse every year. The main types of network marketing are as follows:

• Puff marketing (the most popular, adapted to the Russian market, its striking example is companies selling cosmetics - Avon Products, Faberlic, Mary Kay, Oriflame. The essence of this type of marketing is that the company’s concept is based on the work of certain layers of employees at several levels.
• Pyramid. This type of marketing involves the following scheme of work: there are founders who find several people selling services and goods, they subsequently find several more people and control their activities, and so on ad infinitum.

How does network marketing work?

The operating principle of Russian MLM companies is the same:

1. First, a person undergoes an interview, during which he is introduced to further prospects and emerging opportunities.
2. Then the person is told that he must, using the network, attract new people, the greater their number, the greater his monthly income.
3. How does network marketing work? New employees, becoming distributors of the company, independently promote it, for which they receive commissions, contributing to own development and business development.

The essence of network marketing

What is MLM (multilevel marketing), what is its essence? This is one of the most popular and effective ways legal promotion of services and goods. MLM companies offer unique products that are becoming in demand both in individual cities, regions, countries, and throughout the world. MLM business is not only about direct sales. To be successful in this field, you don't have to sell anything.

The main components of multilevel marketing are well-organized intellectual distribution and the effective use of all its capabilities and advantages. In other words, the main essence of network marketing is that consumers, being at the same time partners of a company, develop its network and make a profit from turnover.

Network Marketing Principles

MLM business is based on following rules:

• equality for all;
• helping others;
• minimum entry costs;
• availability of residual income;
• pyramid structure (this principle of network marketing ensures the constant development of the business and its stability).

Network Marketing Structure

Running through the MLM business and not noticing the main thing, many never achieve the desired results. Why? Because they don’t know how to properly build a network marketing structure. What is structure? These are people who take part in organizing trade turnover, and the final income directly depends on their number. It may include acquaintances, friends, complete strangers. The main task is to skillfully unite them and constantly motivate them for successful advancement.

Network companies

There are many companies that specialize in MLM business. They sell cosmetics, chemicals, household appliances, household goods, other products. A detailed list of network companies operating successfully in Russia is given on the Mlmbaza website, the most popular:

• Life;
• Oriflame,
• "Siberian Health";
• Faberlic;
• Avon;
• primerica;
• Shaklee;
• Talk Fusion;
• Nevers;
• Vitamax;
• Zepter International;
• Kirby;
• Atistek;
• Lurk;
• Pravda.

Working in network marketing

Anyone can try their hand at multi-level marketing business. Companies provide training in network marketing, but not everyone can master this profession. A distributor of an MLM company must be able to organize the sale of products and draw up schemes for the effective distribution of services and goods. The profession obliges you to attract new partners, expand your client base (network), apply intellectual resources, use the network, and set up a system that will generate income directly for the company and the networker.

Network business on the Internet

The World Wide Web opens up incredible opportunities for networkers. Using her gifts, you can make a fortune without leaving your home. On the Internet, products are promoted through their own websites, information groups, blogs, and communities. The main task of the distributor is to find the target audience, create an effective information distribution network, and constantly improve and develop it. Network business on the Internet has the following advantages:

• the ability to conduct business from anywhere in the world;
• the ability to attract potential partners from any region, city and country;
• a variety of information programs that provide prompt assistance in solving organizational issues, conducting education and training;
• the ability to sell through online stores with an integrated order basket;
• possibility of learning online.

How to make money in network marketing

To achieve success in this business, you need to follow several simple rules:

• be a sociable person who is not afraid to approach strangers with a proposal;
• be able to interest, present products in a bright and unusual way;
• actively involve your relatives, acquaintances, and colleagues in the matter;
• constantly improve yourself, increase your intellectual level;
• skillfully build a pyramid by attracting new people in order to not only earn commissions from sales in network marketing, but also provide residual income.

Cons of Network Marketing

Before starting a career as a distributor, you need to familiarize yourself with the main disadvantages of the MLM business. This is the only way to understand how correctly the direction of activity has been chosen. List of disadvantages of network marketing:

• unstable income;
• great moral stress, constant pressure from clients;
• the need for material investments;
• high level responsibility for the people involved.

Benefits of Network Marketing

MLM marketing has both its pros and cons. He teaches how to receive unlimited income, which depends on the aspirations and character of a person. Another advantage of network marketing is financial independence. Network agents have a free work schedule, plan their day independently, make decisions, gain new skills, the opportunity to develop socially, and improve their status. These advantages cover all the disadvantages of this type of activity.

Video: how online business works

Before I tell you how I was recruited into network marketing, you simply must watch this humorous video about an MLM presentation, you will be rolling on the floor holding your stomach :)

How I was recruited into network marketing

The call from a friend came unexpectedly. After graduation, we communicated differently and this usually happened when we came to our hometown to visit our parents. The metropolis in which we lived at that moment was very large and the rhythm of life there was such that there was simply no time for visiting.

But despite the unexpectedness of the call, I did not have any suspicions. Sashka asked how things were and suggested meeting. I didn’t voice the purpose of the meeting, and I wasn’t interested in it, my mind independently thought of everything that was needed - let’s get together, drink beer, chat about life, politics, women (everything as usual).

It’s good that I didn’t take beer with me :) A surprise awaited me on the spot.

A crowd of people unfamiliar to me (about 10 people) gathered in the one-room apartment that became the meeting place. Several were dressed civilly - in suits. Since I was a little late, the celebration was already going on without me. Only instead of a cheerful feast there was a serious presentation of washing powders and miraculous cleaning products.

It turned out that they were recruiting volunteers for network marketing. I didn’t know what it was, and I was late for the main part. As a result, I was destined to listen to the presentation individually in the kitchen. In principle, I liked everything; according to theory, I should have become rich in 2 years.

As you might have guessed, we were talking about Amway. Later I found out that 99% of my friends already knew about it and no one was going to join me in business. I was the only one so “dark” that at the age of 25 I did not know what network marketing was.

My wife was against it, but I was hooked by the idea and I started.

The result of the first experience

In short, my plans to conquer the universe were not destined to come true. I honestly worked for about 100 acquaintances, as recommended by the sponsors. The result is that some of my friends stopped answering the phone, several people signed up to stop calling.

I can’t say much about the product, I have no complaints, I’ve used a lot of them, but I’m not an expert, my wife said it’s normal, the price tag is about the same as for similar cosmetics in the store.

Everyone attended training events, but apart from “hurray” motivation there was nothing meaningful there - the same thing, without specific recipes and techniques for effective work.

Conclusions: Despite the assurances of sponsors, it turned out that Amway had already completely trampled the Russian market and took everything it could - the influx of new people is equal to the outflow of old ones. In chocolate only those who came a maximum of 5 years ago (before the official opening).

Second experience

Despite my failure, I did not blame anyone - this is a business, there are no guarantees and everyone decides for themselves whether to take it on or not.

I didn’t want to take on something like this anymore, since selling cosmetics and powders is not my thing. But I accidentally came across the ISIF project. Liked:

• his niche is education in the field of finance (a topic that was interesting to me)
• the people who represented him were not drawn to anything and it was interesting to just communicate with them
• the project was new compared to amway
• use of modern technologies (Internet)

It so happened that no one pulled me there, I wanted to go there myself. It turned out well - it was really my project. Within a year and a half I received a check of $1,900.

But not everything is so smooth with new projects. Financial education does not have such a wide consumer audience as cosmetics, and the company as a whole was unable to reach the turnover required for profitability - the project was closed.

In network marketing there are no restrictions on age, gender or religion. that is, theoretically anyone can succeed. Moreover, the speed of your development will not be greatly influenced by educational diplomas, but your skills related to sales, people management, marketing, psychology and other areas related to business can have a significant impact.

Due to this, Special attention When learning this profession, it is worth paying attention to personal growth and the art of communication. Technical skills go by the wayside. They will not cause harm, but they are unlikely to determine the level of success.

Why come to network marketing?

Most often, people come to network marketing for the money, but usually stay for other reasons. This environment, this opportunity to travel, this free time, this is a feeling of self-sufficiency and constant personal growth. Gradually, money fades into the background, although it is an indispensable attribute of any business.

Anyone who has been able to make their first income from MLM realizes how much more pleasant it is to receive passive income than from hired work (even with a higher salary). There are no bosses, no responsibilities, no time or place of residence.

Naturally, each new distributor has his own reasons for starting a business, but over time, each has a few common elements. First of all, this is the desire to help others succeed, those who believed and followed you into this industry.

What costs are needed to start in network marketing?

If you look at network marketing as a business, and that’s how you should look at it, then you can start creating your own business within mere pennies. no need to open an office and rent warehouses, no need to pay salaries to sellers, couriers and loaders.

All that is required of you is to enter into an agreement with one of the companies and pay the mandatory start-up fee for the right to use the trademark, for servicing your accounts, etc. (V big business this is called franchising). In different companies, the amount can range from a few dollars to several hundred, but in any case, you can start much cheaper than in any traditional type of business.

Expenses can be divided into the following groups:

1. Purchasing products for personal use
2. Purchasing products for resale - these funds must be returned in an increased amount, since end customers pay more than the purchase price. On initial stage This is the main income in the business and should cover most of the expenses.
3. Training costs - this includes educational materials for self-study (books, CDs) and costs for attending educational events (seminars, trainings)

When will I earn my first money?

Unfortunately, network marketing is not a job and there is no salary. You will receive your first money when the first volume of goods or services arrives to the client based on your recommendation. For some it will take several minutes, for others several months (there have been cases where it took several years, but this is rather the exception).

To speed up the time you start making money, start developing your skills. Sales - for personal promotion, presentations, to attract new distributors, training - to effectively build a structure in depth.

As soon as your level of development becomes in demand, the market will immediately respond by increasing your income.

The human factor plays a major role in shaping a distributor’s income in this industry, which cannot be assessed in exact numbers; one can only give general forecasts based on the experience of other people. These forecasts may be very far from the reality of each individual person.

Hi-tech

With the advent of the Internet era, new opportunities for business development have appeared. Now, the Internet allows you to significantly speed up the construction of a structure. Although, despite the many advantages in modern technologies, there are also a lot of disadvantages.

The main problem preventing you from promoting network marketing on the Internet. It's about trust. In the traditional model, most of the partners joining the team are friends and acquaintances. On the Internet, by default, there is no trusting relationship, since every offer may hide deception.

In addition, building a structure via the Internet is very difficult to scale, since most have limited resources and cannot accommodate tens and hundreds of thousands of advertisers at the same time. The introduction of the Internet model into online business leads to a rapid increase in competition and a sudden increase in prices for promotion.

If you need advice on this type of business, don’t hesitate to ask.

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  How to make money on the Internet for a beginner - 23...

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

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 who have similar rights . At the same time, the income of each network participant consists of commissions for the sale of products and additional rewards (bonuses), depending on the volume of sales made by the sales agents they attract.
Network marketing originated in the 1940s. The dawn of the network company industry occurred in the 80s and 90s. One of the founders of the industry was the well-known company American Way Corporation (Amway).

Myth No. 1. Network marketing is my business.

Do you seriously think that this business is yours? What if you think about it? Have you thought about it? No! Network marketing in 99.999% of cases is not your business. Network marketing is a business only for those (very smart and enterprising) people who founded it. Dot. This is the business of those people who speak to you at company seminars once a year and make motivating and “grand” speeches from the stage.

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

Understand that if you work for a network company, then this is NOT your business. In this case, your activity can only be called an alternative to working “for someone else” and self-employment, but not a full-fledged business, in the true economic sense of the word.

Myth No. 2. There is a lot of money in network marketing and you can get rich quickly.

Of course, the best option is, of course, to try and see the result. But, as many years of practice have shown, there is NO big money in network marketing. Sometimes there is no money there at all, let alone much. How can this be, since network companies make billions in profits? Yes, they do. The founders and those who head these companies and are personally close to the management receive it. Ordinary mortal distributors are content with small checks that barely allow them to make ends meet. You may object that you can become a leader! You're right. You can also fly into space. The whole question is who “will not vomit” on the way to this space, who will not lose consciousness and how long to fly to this “space”. And in general, do you need this space?

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

People involved in network marketing (may they forgive me) are just intermediary sellers. Just INTERMEDIARIES. Of course, intermediaries can sometimes make good money, but the main profit goes to the owner.

There is no big money for an ordinary distributor in network marketing, it simply isn’t there. All the golden mountains that your “mentors” and leaders draw for you are a farce and clean water motivation with profanity. Getting rich in network marketing is very difficult. I won't say that no one has made a fortune selling detergents, toothpastes or super horseradish cutters, but the pictures that are drawn to you are radically and sharply different from the harsh reality.

Think of Network Marketing as an Alternative regular work(and then carefully), as an additional source of income, but not as an easy and short path to wealth. I repeat, of course, there are people who, as distributors, became leaders and made a fortune for themselves. But these are tough, unceremonious people with pronounced leadership qualities, these are people who have gone through fire, water and copper pipes in this business, devoting a good part of his life to it. There are one such “lucky” distributor in a million. Want to try your luck? That's your business.

Myth No. 3. My mentor is my friend, he will help me with everything, teach me everything and explain everything.

Hell no! Well, whoever, your mentor is definitely not your friend. Friends don’t bother each other month after month by constantly reminding them that they need to qualify this month and buy three and a half more super horseradish cutters for future use, they say. Friends do not benefit materially from friends, at least the good and true ones.

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

In general, in our lives we are constantly influenced by other people, whether we want it or not, and very often there is no awareness in our actions and decisions. In network marketing, distributors who are dependent on other people’s opinions, listening to the mentor’s motivation and looking at his painted pictures of golden mountains, lead their lives downhill (in a very bad case) without knowing it. This is sad.

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

Mentors, seminars, educational and entertaining group events in network marketing - their actions are mostly aimed at brainwashing, retaining distributors in the company and increasing the company's profits. They didn’t care about you, your life or your problems. Remember this. The first leaders of the company will never share with you the secret knowledge they have, since they are not interested in your growth to their level. They give you exactly the information and knowledge that you need to increase sales, nothing more. They are not interested in your true growth and reaching your potential.

Let's summarize.

Of course, there are quite a few positive aspects to network marketing. Working in network companies, a person learns a lot, goes through an excellent school of sales techniques and learns a bunch of interesting things. In the process of work, he can radically (possibly in better side) change your lifestyle, can start traveling if you haven’t traveled before, communicate with interesting and successful people, can reveal a new side of himself and so on. There are definitely advantages. But you don’t need to rely on MLM companies as if this is the only occupation worthy of you, that this is a gold mine and some kind of unexplored Klondike.

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

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

We often do wishful thinking. You need to look at the results and draw conclusions. You need to use your precious tool as thinking. Use it! Think with your own head. Trust facts and results, not the words and pictures of your mentors and leaders. If nothing has changed for you for several (or even decades) years, then it is not prudent to believe that by continuing to do the same thing (for example, working hard in a network company), something will change for you and you will start shoveling money. You won't start.

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

I have a direct connection to working in network companies. I had the good fortune to work as a distributor of Chinese goods, and not in the most simple version- wandering around organizations with a bag at the ready. I was engaged in cold sales. I consider this the most aggressive and difficult form of network marketing. I had a sales system, like in all similar companies, I had a mentor (and more than one), there was a lot of “washing” of my then still virgin brain, and so on. I went through all this and realized (fortunately quite early on) that this is NOT my business, that mentors are NOT friends, and that everything is NOT as sweet as they tell me. Plus, I have many friends and close people who are involved in network marketing in one way or another (some for more than 10 years). So I more than know what I'm talking about.

October 12, 2015

Greetings! MLM business - what is it really? Passive income, your own business or a banal financial pyramid? As always, I will try to be very short and to the point.

The definition of “MLM” looks like this: network or multi-level marketing ( Multi Level Marketing). In essence, MLM is one way to promote a service or product.

The difference between MLM is that in network marketing there are no retail stores, salespeople, cashiers and security guards. A product or service is sold “hand to hand” by a network of independent distributors (also called sales agents). Networkers receive their income not only from direct sales of the company’s products, but also by “biting off” part of the profits of distributors attracted “for themselves.”

The network is growing, money is flowing like a river, no bosses and strict office schedule... Beauty?

Network marketing has existed in the world for more than 50 years. Such projects came to Russia about twenty years ago. One of the first companies was the legendary Herbalife, a little later they were joined by Oriflame, Avon, Neways, Mary Kay, Faberlic, Vitamax and many others.

I would like to note that the 90s in Russia became the heyday of not only MLM projects, but also large-scale financial pyramids such as MMM. The unpleasant aftertaste that has remained since then has turned Russians away from both for a long time.

What does it actually mean to make money in the MLM industry?

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