Dear friend, I greet you. Rinat Admiralov, an entrepreneur and expert in the field of network marketing with 8 years of “work” in this industry, is in touch. During this time, he earned good money in MLM, bought a foreign car and seven apartments.
Came to develop business in Stavropol from St. Petersburg. In life, I am fond of guitar, reading books, personal development, social activities, I like to lead a healthy lifestyle.
The MLM industry has long caused a lot of controversy and controversy. I myself had a negative idea of \u200b\u200bthis activity until I understood this issue in detail. How many people, so many opinions. Some people consider this direction illegal and "equate" it with a pyramid scheme, while others believe that this is a genius invention of mankind.
I will share with you my economic outlook and critical thinking on this issue and practical experience, I hope to be useful.
Let's take a look at what MLM is, is it worth doing and how much you can earn.
Rinat Admiralov, an entrepreneur and expert in the MLM industry, shared information about the network business on the pages of the online business magazine "PAPA HELP"What is network marketing (MLM) and how it differs from the "classic"
The "standard" definition goes something like this:
Network marketing (multilevel marketing) is a way of promoting a product to the market, in which a company (manufacturer) sells products directly to its consumers, and distributors (partners of the company) receive a percentage of the turnover of customers attracted by them.
This line of business was originally based on the idea of \u200b\u200brecommendations. That is, a satisfied consumer of a network company's products recommends it to his friends, acquaintances and relatives, while earning money.
Every day, without thinking, we recommend someone (something): a lawyer, a dentist, shampoo, a travel agency, a restaurant or a movie.
But the trouble is that no one pays us money for this, even if, thanks to our recommendation, a deal was made and someone made good money on it.
So, the idea of \u200b\u200bbuilding a network marketing business is a recommendation.
Everyone treats MLM differently and that's okay
For me MLM is microa franchise that has a number of advantages over a "regular" franchise.
Franchise in business - this is the right to work under the brand name of a well-known company, using its image, technologies and products.
However, you will have to pay well for such "patronage" of a large partner.
The first thing you have to spend money on when starting to work on a "classic" franchise is lump-sum payment ... This is a one-time payment for using the brand of the partner company, its developments and products.
Second - royalty... This is a certain percentage of the turnover that you would pay to the company that granted you the right to work with it under the franchise scheme. However, for most well-known companies, the lump-sum contribution is measured hundreds of thousands and even millions of rubles.
What does this mean for you as an aspiring entrepreneur looking to start a “risk-free” business?
So only one thing: you must have a solid start-up capital to operate under a well-known brand. As soon as you start receiving your first income (not even a profit), please give back another percentage of the money received (royalties).
As you can see, the classic franchising scheme is suitable for either experienced entrepreneurs or people with a solid initial capital.
Of course, there are franchises on the market with very loyal terms. Therefore, when choosing a franchise partner, it is very important to study the parent company - how they make money. Often there are unscrupulous sellers who earn their main income from selling the franchises themselves.
Here's a life hack. The first criterion that you should pay attention to before delving into the study of the proposal is how much the company has their points in the general network.
If less than 50%, then you should think about it, since with a successful business building, income is reinvested constantly and develop its network.
If this topic is interesting, I will write a more detailed review - how, without economic education and experience in business, to quickly identify worthy offers on the market that should be considered in more depth. Let me know in the comments to the article.
Why network marketing is a “micro” franchise for me. Because its advantages as a classic franchise remain, and many disadvantages "disappear".
In the table below, I compared the terms of a "classic" franchise and network marketing:
Comparison criterion | Classic franchise | Network Marketing (Microfranchise) |
The right to operate under a well-known brand | Yes | Yes |
The company provides training and development to its partners | Yes | Yes |
Product quality | High (due to standards) | High (due to direct deliveries) |
Lump-sum payment | Yes (almost always) | No |
Payment of royalties | Yes (almost always) | No |
Financial risks | Substantial | Minor |
Growth potential | Tall | Tall |
Geographic mobility | Low (most businesses are tied to a material point of sale) | High (you can do business in any city and via the Internet) |
Network Marketing can be thought of as big player symbiosis in the small business market.
Where the investor partner (grid company) took all operational activities and financial risks upon himself, and the small business partner (distributor) only needs to work on creating a client base.
In any business, it is necessary to create a customer base, while all the risks and the "operating system" that everyone wants to get rid of, remain. Microfranchise solves this problem in favor of small businesses.
It is very difficult for small businesses to compete with large ones, but becoming a partner of a major player in the market is already interesting.
Classic promotion usually involves promoting products in different ways, including through intermediaries using advertising in the media and the Internet.
For a novice entrepreneur, such a promotion strategy is more costly, which is why financial risks are higher here.
For me, classic product promotion and mlm promotion are all business systems with their own advantages and disadvantages.
Pros and Cons of Network Marketing for Consumer and Distributor
Consumer Is the one who directly uses the product of the network company.
Network marketing, like any phenomenon (industry), has its pros and cons. Here we will consider them from the point of view of the consumer and the distributor. Let's start with the consumer of the product.
Pros for the consumer (+):
- No fakes. Orders come from the client to the company directly, it sends the goods to the points of issue, bypassing intermediaries. The probability of counterfeiting in this case tends to zero, in contrast to the usual retail (where the share of counterfeit and fakes can reach 90%).
- Personal consultant. The income of a consultant of a grid company directly depends on his turnover. The turnover depends on constant and satisfied customers... Therefore, the task of the consultant is to be customer-oriented and not just sell the product, but provide a solution for their customers, giving more value than the buyer paid. In most large mlm companies, consultants are competent people with an active lifestyle and a high level of responsibility.
- Free shipping.In whatever country or city you order the goods, if there is an official point of issue of the network company, delivery for you will be free or minimal.
- 100% product refund.Today the competition in all segments of standard goods is very serious and any manufacturer strives to win in the fight for the consumer. Large companies, and not only chain companies, offer a guarantee for the return of a product in case of dissatisfaction with its quality, packaging, and so on. When returning products, the company gives 100% of the payment for it.
Cons for the consumer (-):
- Unfair work of a consultant. The human factor has not been canceled. Since there are no strict requirements for a candidate when "applying for a job" in network marketing, there are occasionally amateurs here who spoil the reputation of the whole industry with their incompetent advice and actions. Perhaps this is the only negative if the company itself and its product are really good.
Now about the pros and cons for the distributor (partner of the mlm company).
Pros for the distributor (+):
- Accompaniment of a mentor to the result. You are in the same boat with the mentor, this includes joint work activities, where the mentor is financially interested in teaching you. His task is to convey all his skills and knowledge, and yours is to accept them and put them into practice on their own, so he cannot do it for you. This way you get a playing coach as a mentor. There is such a concept in football. Together with you on the field, he is a practitioner-mentor who does and continues to do what you are just going to do. Acting on the system of a mentor, you achieve the result together with him.
- Creation of a team of like-minded people. Constant growth and development, communication among “friends” helps to awaken hidden talents and potential of future and current “networkers”. Financial performance as the main reference point in network marketing helps each team member become more effective and financially literate. For example, we play a game with "colleagues in the shop" from time to time By Roberta Kiyosaki "Cash Flow" (real life financial simulator), we go outdoors together, we do sports. Also, almost every network company regularly holds meetings with TOP leaders, famous people from different fields, sales and team building trainings.
- Create serious income from your business system. There is an opinion that network marketing is a side job, additional income or in general, something on which it is impossible to earn. According to my observations, the average resident of our country with a salary of 30,000 rubles believes that young girls or grandmothers go to mlm to earn 5,000-10,000 rubles as a supplement to their pension or scholarship. People do not even realize that there are dollar millionaires in this industry and that these are not the owners of network marketing companies, but the same distributors. The scale of their teams is amazing. Some of them have built a network of thousands of successful followers and tens of thousands of regular customers. As you can imagine, with such a scale, the incomes of these people amount to millions of rubles a month. They went to this for 8-10-15 years, and received such results.
- Access to wholesale prices. A client of a company, buying goods from a distributor, overpays on average by 25-30%. It is logical to assume that it is much more profitable to register as a VIP client of a company on a recommendation, even if you do not plan to build a business, but simply take goods for your own consumption.
- The ability to travel at the expense of the company, receive valuable bonuses and gifts... Partner motivation is essential for a networking company. Therefore, the company gives travel vouchers to especially productive partners as bonuses, allows them to buy a car on preferential terms, or even give them free of charge when the distributor reaches a certain level.
Paris. I'm going to the famous Disneyland
Cons for a distributor (-):
- Illiterate business development leads to misunderstanding of others. Surely each of you at least once in your life has come across inadequate or too intrusive "networkers". They are obsessed with the idea of \u200b\u200bbecoming millionaires, proving to everyone that network marketing is the only way to start a successful business, especially if you do not have start-up capital. If you are skeptical about their ideas, then immediately become the object of ridicule and condemnation from the "guru" of mlm business. Most often, this problem arises among beginners and those who do not deeply understand the essence of their business. As a consequence, very diverse performances are created due to non-professionals. However, for the MLM business pro, this is not a hindrance, but even a plus, since getting to a mentor people have something to compare with.
How to make money in network marketing - I share my own 8-year business experience in MLM
Many of you have heard that there are royalties for musical and literary works. That is, once you have written a book, for each copy sold, you will receive a portion of its cost as a royalties. The same is true when renting or performing your own song, you will receive money.
It is called residual incomewhen for once invested by you intellectual work you can receive money for life.
Unlike the residual, passive income comes for once invested money.
I was very inspired by the idea of \u200b\u200bgenerating residual income and I began to look for ways to generate it without having the talent of a writer or musician.
Network marketing allows you to create that very residual income thanks to your intellectual work for the created turnover, through building a permanent loyal customer base for the company.
In MLM, residual income can be called marketing. That is, by building a sales system for the company's products, you create a “marketing machine” that operates 24 hours 7 days a week. The company provides all statistics and reports to you and pays a percentage of remuneration for the actually made purchases according to the marketing plan.
With royalties, everything is great, and to some extent, the process of making a profit is similar here and there. For once invested labor, you get money. However, the trick is that a book written once generates income only from itself.
Now just imagine: a book you have written is writing a new book, and you are being paid your royalties for this new book written by your book.
If you pass this idea through yourself, you will not be able to sleep well the first time until you start implementing it.
This is the business of teachers. Learning to learn skill is valued and rewarded here. In other words, this principle is called “coach of trainers”.
A trained student teaches other students. He writes his book and creates his copyright. And you get paid your new royalties for the earlier work of teaching teach.
In network marketing, this is reality. Only here, instead of books, there are people. Once trained, a person builds his own structure and from the turnover of such structures you receive dividends for your work.
It turns out that in mlm a book can write a book several times. For example, in a company with which I work, the marketing plan assumes payments from 6 levels "in depth".
Developing my structure for five and a half years, I decided to check what residual income is. whether I will be paid for the work I once did if I go on vacation for an indefinite period. Then I did not know that my vacation would last two and a half years.
The first year I started to live in a light mode, in the second year I moved to Moscow from Stavropol and devoted this time to learning different spheres: scientific, educational, social, cultural and entertainment.
He attended lectures on neurosurgery, bordering on nanotechnology, by the best professors of our country and the world, met with leading scientists from the Institute of Nutrition of the Russian Academy of Medical Sciences. During this time, there was still a lot of interesting things. I just lived and was engaged in self-development, not worrying about financial income, since residual income guaranteed me a comfortable standard of living for this time.
What about income? - you ask. Surprisingly, it was at this moment that I really felt the beauty of my residual income.
He kept coming and helped me invest many months in developing my personality. Thanks to this, new horizons opened up in front of me.
The cool thing is that this business not only provides an opportunity to make money and create residual income, but also brings emotional satisfaction.
Since I am developing a business, money is also important to me, but even more important is the benefit that I bring by doing this activity.
When I was just starting, I learned from my mentors every last detail, asked thousands of questions, was very meticulous and meticulous.
Fortunately, my mentors turned out to be real professionals and meticulously answered all my questions.
In the end, I realized that THREE factors are important for success in network marketing:
- Demand for goods. The product that the company sells must be clear and non-specific. They are also called consumer goods (consumer goods).
- Repeated customer requests. Regularity of sales is a very important factor. For example, people buy a car every few years, and food and hygiene products are stable monthly purchases and daily consumption.
- A classic marketing plan with a clear payout percentage. Absolute clarity is the key to long-term partnerships. A company that has been in the market for a long time, honestly and consistently paying commissions is the best choice for those who want to build a career in the mlm industry.
Think in numbers how much you need to train partners and at what turnover how much will you earn.
Based on this, it will be easy to determine your anchor points, to understand where you are now and where you will come in the future.
At the end of this paragraph, I would like to wish you to find your unique path and move along it, build on your strengths. Take the best from your mentor and adapt it for you.
Business in mlm is not only money, but also a lifestyle. It gives freedom, development and, of course, good income.
Below we will talk about specific actions. They will help you succeed in this industry.
How to become a top networker in your region - step by step instructions
Here I am sharing a working instruction in 5 easy steps. Just take it and implement it!
A good attitude is half the success in any undertaking!
Step 1: Set the Right Time-bound Financial Goal
This is also called anchor points. There should be three of them.
For example: 100,000 rubles , 300,000 rubles and 1,000,000 rubles .
Also, be sure to set a deadline for achieving each of the 3 financial goals.
Let's say 100,000 rubles you want to make money in a year, 300,000 rubles - in 3 years, and you plan to reach a million rubles a month in 7 years.
Why is it important to put exactly 3 anchor points?
Look, when you just start your "career" in network marketing, you do not earn anything, but in a month or two your net profit will be 5,000-10,000 rubles with due effort.
Suppose that you have your first earnings and in order to move on without losing motivation, you need the following financial goal.
Stubborn people come to income pretty quickly here. 30,000 - 50,000 rubles ($ 500) a month, but there is a great temptation to stop at this, and continue to work "relaxed".
And here your plan says: “buddy, you see an obligatory goal ahead of you - 100,000 rubles «.
With some effort and 100 000 - not such a fantastic amount, but this is already enough money for most people to live comfortably. This is where most of the really successful distributors get stuck.
When you still have two solid numbers ahead, you do not focus so much on the already achieved financial goal (100,000 rubles).
Once you start earning 300,000 rubles a month, you should not relax either, because the coveted million is ahead. At this stage, you can put the next digit in 1.5-2 million rubles per month.
That is, your financial goal should be at least 2 steps higher than your current results in order not to stop.
Step 2. Find an experienced mentor (training)
Choosing a mentor is very important.
Learn from someone who has already done!
Now there are a bunch of business coaches around who are ready to teach you anything, as long as you pay them your money.
Don't confuse a mentor with a counselor. The advisor thinks that it should be so, the mentor did what you are only going to do.
Do not take their word for it, ask your potential mentor to show your results in earning income in this particular area of \u200b\u200bactivity from a specific company and for specific actions (bank statements from a current account from a specific company for the period with the purpose of payment).
Neither cars nor real estate are proof of high income in mlm, as they could have been acquired from other sources of income.
Step 3. Arrange the focal points correctly
What you focus on is what you get the fastest.
You should have THREE focal points:
Point 1. Network.It should be based on technology, according to which you answer 5 questions to your future partner. Below I list them and briefly answer each.
- What's the point of this business?The meaning of the MLM business is to create a group turnover and receive interest as a reward.
- Where does the money come from?The money is already included in the cost of the product. Due to the fact that the developer, manufacturer, logistician and seller, all costs are automatically reduced for each stage separately. Thanks to this, the company has super-profits, which are used to develop the quality of goods and expand the range. And for the buyer the most favorable price. It is also beneficial for the partner of the company, who receives his reward from the created turnover.
- What to do?Build a team, teach them personal consumption and form their teams. You become a mentor for your charges and, if possible, develop leadership qualities in them. So people will be drawn to them, and your own success directly depends on the success of your partners.
- Who will help?Any athlete or outstanding personality has mentors. And a mentor will help you in building your business. It is also called an information sponsor. He guides you on the right path, gives you a working technology, and at first under his leadership you will hold meetings with potential partners of your structure.
- What will be the result of the activity?If you do everything correctly and professionally, your material and other dreams will come true. This will happen as a result of residual income. It is sometimes called passive, but I separate the two. Passive income (financial passive income) arises when initially invested large MONEY (deposit in the bank) or property (renting an apartment). Residual income (marketing income) arises for once invested LABOR. Once inviting consumers to your structure (network), you will create a stream of regular customers and will receive income from their turnover.
Point 2. System.
The system in the network business is a constant and ongoing activity. It consists of three important components, I also call them "Tamara and I walk in pairs":
- Invitation and meeting.Conducted according to the technology provided by the mentor. The implication is that you must have a unique selling business idea and presentation that can be easily duplicated (duplicated).
- Personal consumption and trailer *.Personal consumption allows you to benefit from the product and the same purchase is included in your turnover. is necessary to create turnover and own awareness of the products offered. Trailers are loyal customers who do not register with the company, but ask you to make purchases for their use in your name (personal account). You can also purchase the goods presented in the catalog as gifts for birthdays and other holidays. A very convenient solution to this problem.
- Training and support.Training is an important part of any business or professional process. MLM is no exception. Self-education, raising your own level in different areas, you will have something to convey to your team. I know from experience that people who have recently come into business leave it in the first days or weeks. This is because they do not see their mentor's real interest in them. Conduct developmental meetings, business games with your team, organize a club of entrepreneurs. In a word, you must show by your example that you are a worthy leader, whom you can and should follow.
If you like your mentor's system, you can take it as a basis for your own work.
Point 3. Team
A team is a group of people united by one goal! This goal inspires every team member.
One for all and all for one principle also works well in MLM.
The main rule here is that the result of each fruitfully influences the result of each.
At the first stage, invite everyone to the business, without dividing people into "promising" and "not very". You do not know 100 percent exactly who among your acquaintances will want to do business, so invite everyone.
Often I hear from my guys in the process of compiling a list of potential partners something like this: "I have a friend Vasya, he is an entrepreneur, a serious person, he will definitely be interested" or "yes, this is the number of Petya's guy who collected furniture for me, he is a" burdock " , it certainly doesn't make sense to invite him to a meeting. "
In the end, everything ends up not at all as intended.
Vasya, a serious entrepreneur, is so passionate about his business that he is not interested in other areas. On the contrary, furniture assembler Petya came from another city a month ago, he has big ambitions to build his own business and he will dig the earth with his nose in order to achieve a result in network marketing.
It happens in different ways and only in actions will you see who will become your business partner.
Step 4. Conduct many meetings with potential partners
Team building through meetings is a key moment in the development of a network business. You should have a sales presentation on hand, rehearsed many times and understandable to you and others.
This is the business of statistics, only those who have not done a certain number of actions... You will gain invaluable experience by holding many meetings. Earlier I wrote that it is important to hold meetings according to technology.
If you do everything correctly, then in a few days you will form your first line in the organization, that is, you will recruit an average of 5-7 partners in the structure.
Having taught them to do the same, you start the mechanism for self-scaling of your structure.
Step 5. Expand your circle of acquaintances (effective networking)
Develop, read books, fill yourself and then you will be interesting to others. Study materials not only on business or mlm, but also on other related areas. This will quickly become a versatile person and a pleasant conversationalist. Building a business will not be a job for you, but a "lifestyle".
The broader your horizons, the more people from different spheres you will have in your structure and just as friends. It's nice and helpful.
Be active in networking.
Networking is an expansion of the circle of acquaintances, the main goal of which is to build business communication with people from different fields.
Attend events for the purpose of new acquaintances and self-development: trainings, seminars, sports and cultural events.
People who are passionate about their business are disposed to new opportunities and will certainly be glad to meet you. Even if they will not build a business with your company, at least half of them are your potential customers (product consumers).
List of network marketing companies in Russia - ranking
Dozens of network marketing companies are operating in Russia for 2019.
Among them are several large players who share more than half of the market among themselves, the rest get only 20% of all.
Leading companies of MLM in Russia:
Amway company one of the oldest and most famous in the world. Founded in 1959 by Jay Van Andel and Rich DeVos in the USA. Sponsors sports teams in Russia and abroad. It actively distributes products of various brands through its consumer network. |
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Oriflame company - The Swedish company, known both in Russia and all over the world, operates in 60 countries. One of the pioneers in the MLM industry with an annual turnover of about 1.5 billion euros. It has its own production and research institute, which makes its products affordable and high in quality. |
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Avon company founded in 1886, that is, the company is over 100 years old! In Russia, only a very dense person has not heard of her. Almost every girl has used her makeup or other products. The company positions its products as inexpensive and fairly high quality. |
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Faberlik company founded in 1997 in Russia. Her cosmetics are positioned as oxygen and especially beneficial for health. Several years ago, the company began producing footwear, clothing and accessories, thus expanding its product range. |
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Mary Kay Company was created in America in 1963 and named after its founder Mary Kay Ash. It is one of the largest cosmetic companies in the world, is in the TOP MLM industry in terms of scale of activity and turnover. |
Almost everyone knows about these companies.
The following companies in this industry are also quite famous:
The world operates direct selling association, Russia also has it representation.
Europe has its own similar association - RDSA. These organizations regulate the activities of the MLM industry, monitor compliance with quality standards, products sold and the ethical component of the work of participants - network marketing companies.
Network Marketing Books
Useful saying:
A person with a higher education differs from a person with a secondary education, only in that he has read 50 more books!
By the way, according to statistics, average experts in their field read less than one book per year!
Below is a list of TOP-50 books on network marketing, they can be downloaded in the docx document.
My selection of books includes not only specialized publications, but also top works on related topics that will be 100% useful to you! Be sure to read them.
MLM is primarily a business and, like any entrepreneur, you must master the art of time management, be effective, understand the economic and psychological aspects of starting your own business.
Frequently asked Questions
I am asked these questions regularly, I decided to answer them in detail here, so that in the future these answers will help you.
Question 1. Which network marketing company should I go to to make money and not be deceived? Anton, 21 years old, Bryansk
Anton, again, I advise you to choose a company based on a number of criteria.
I described the main ones below:
- Publicity of the company. This means that its shares are quoted on international exchanges and there is transparent financial statistics of activities available to everyone.
- Age of the company. The longer the company exists, the better. The minimum life of an organization on the market, which indirectly indicates its reliability, is from 21 years.
- Natural consumer product. Good mlm companies sell everyday goods: cosmetics, hygiene products, vitamins, household goods, beauty and health products.
- The company's turnover: from a billion dollars per year. Yes, this is serious money, but you yourself are looking for a serious partner for a long time, right ?!
- Own production and research centers. Logistics is an important part of a good network marketing company. Such a company "has something to brag about." Its own manufacturing base and its own product developers indicate that the company has come to the market in earnest and for a long time.
- Classic marketing plan. The most important component of a network business is a marketing plan. There are 5 types of MT in total. They all have their advantages, but also disadvantages. In my experience, the most worthy marketing plan is the "classic" one. When meeting with a company representative, ask what marketing plan this organization uses to promote its products. If you are interested in learning about the types of marketing plans in mlm, write about it in the comments.
- Company management. It's no secret that a business is a reflection of its leader. Find out as much as possible about the top officials of the “potential partner”. Who are these people, how good is their business reputation, whether they have the proper experience in the field of business they are engaged in.
Question 2. Network marketing is a pyramid scheme or is there a difference? Marina, 26 years old, Izhevsk
Marina, there are some differences. Network marketing has nothing to do with a pyramid scheme. Many people, without understanding, really do not see the difference in these concepts.
If they tell you that MLM is a pyramid, know that your interlocutor simply did not understand this business.
In the table below, I have described, point by point, what is the difference between network marketing and a pyramid scheme:
Network marketing | Financial Pyramide |
Legal way to distribute products | The scheme of the founders' enrichment prohibited by law (in most countries, including Russia, the organization of financial pyramids is criminalized) |
There is a product in demand on the market | The product is absent or exists nominally to "cover" illegal activities |
The profit of the company's partners is formed due to the turnover of a quality product | The profit of the contributors to the pyramid depends on the contributions of the participants invited by them |
Entry to business (registration) is free or symbolically low (a few dollars) | You can become a member of a pyramid scheme simply by investing money and receiving imaginary interest or fixed payments |
There are payment and other official documents in the course of business (invoices, checks, contracts) | There are no papers confirming contributions, it is legally difficult to understand on what basis the pyramid should pay interest and the amount of the contribution to its participants |
Good network marketing companies have been around for decades and thrive | The lifetime of financial pyramids does not exceed several years (usually from 6 to 24 months) |
How to make sure that the company you are planning to cooperate with is not a pyramid scheme:
- The most reliable option is to check if its shares are listed on world exchanges. This can be done through the "promotions" application on any smartphone. If a company's shares are freely traded on stock exchanges, it is called "public".
- Pay attention to the company's product. It must be massive and have a real market value, and in the ordinary "market" this product must be comparable in price and quality. Pay attention to the quality standards used in the manufacture of the product.
- In a pyramid scheme, they offer interest on the money invested, which are taken, of course, from new "victims", or fixed amounts.
- On the website nalog.ru you can check the company by TIN and type of activity. Also, be sure to pay attention to the size of its authorized capital. It is he who is a guarantee for the return of funds to creditors and investors in case of bankruptcy of the company. Now the minimum amount of the authorized capital for the creation of an LLC is 10,000 rubles. It is not difficult to calculate, if 10,000 investors invest 100 million rubles in a pyramid, how much they will receive when the authorized capital of this company is 10,000 rubles. In case of bankruptcy of the company, according to the law, 10,000 “wooden” ones will have to be divided among all “victims”.
- An indirect indicator that can be applied in a superficial analysis is whether there is a business case for the company's activities. If you are promised 200-300-600% per annum on your investment, run away from such would-be merchants. Professional investors with big money consider it a great success to earn 25-30% per annum on their investment. And they certainly won't invest a ruble in a project that promises 10-20 times more. If you are at least a little familiar with economic theory, then you know that big business earns on volumes with low profitability and does not just grow 10-20 times per year. And if you are told that this company is reliable and fast growing, then often one thing contradicts the other. Read the nigga and watch the interview of the world's leading investor - Warren Buffett and you will learn a lot about investing.
Question 3. Now many people have heard of the network marketing company NL, what can you say about it? Olesya, 29 years old, Stavropol
Olesya, NL is an interesting company. I will not comment on her activities in any light. I suggest you evaluate it according to the criteria described by me in the answer to the previous question, and you yourself will draw a conclusion.
Question 4. Work in network marketing: how to get it and how promising is it? Ivan, 24 years old, Odessa
Ivan, if you have responsibly approached the choice of a partner company, such cooperation can become a serious business for you in the future. The MLM company has already invested a lot of money in the product, took over its promotion and all organizational issues.
Suppose you have chosen the ideal network company to work with, and the logical question here is, how seriously are you willing to act as a partner?
You are more likely to make money and succeed in network marketing if you meet 3 important criteria:
- Unhappy with the way you live now. And you can earn 30,000 rubles and be happy and can earn 300,000 rubles and be dissatisfied with the current situation. It's not just the material aspect. The “hungry” work (up to knowledge, to financial results, to social responsibility). Maybe you need more freedom or you just want or expand your occupation.
- You yourself think you deserve a better life.This is your inner conviction.
- We are ready to do something immediately. Only actions determine the result. There is such a phrase: to have what you didn’t have before, you must do what you didn’t do before .
As you develop your partners, you continue to develop yourself.
Question 5. How to pay taxes on profits in MLM and when is it worth doing? Olga, 32 years old, Samara
Olga, you can think about paying taxes when you already have a stable turnover and are going to withdraw the money earned on your personal account.
To do this, it is worth opening an individual entrepreneur with a simplified taxation system, where you will pay 6% from the received profit
.Do not be intimidated by the fact that you are opening a "company", this is a standard and very simple procedure. This has already been described in one of the previous articles on the site.
First, you can accumulate the earned funds inside your company's personal account and use them as payment for products in a certain percentage of products.
However, the opening of an individual entrepreneur will entail the payment of mandatory pension contributions, which are about 30,000 rubles per year for individual entrepreneurs. Changes annually.
But there is good news here, our activity allows us to make a tax deduction in payment of pension and insurance contributions up to 100% (determined by law).
You can collect money for a long period of time on a personal number without withdrawing it, until you reach the level of income from 100,000 rubles per month. But in this case, you need to have a financial "cushion" to cover operating expenses until the proceeds from your business.
Question 6. How to attract people to network marketing if I'm a newbie? Ruslan, 24 years old, Nizhnevartovsk
I'll start with humor: are held accountable, therefore I recommend to interest
At first, you need to figure out this business yourself. Tutors, books, videos and audio materials will help you. Fortunately, a lot of information on this topic has accumulated since the end of the 40s of the last century.
Secondly, understand that all methods work if you follow them exactly.
Thirdly, you need to know that there are a lot of people and there will be enough "work" for everyone. There is hot, warm and cold contact. Depending on the type of contact you choose, use the methods of working with this or that client.
Fourth, act according to the sales technology of 5 points:
- Established contact.
- Figured out the values.
- Made an offer in the spirit of values.
- Answered for revival.
- Closed the deal.
Fifth, remember, your expertise in business no one will raise for you... Learn and you will succeed.
P.S. The mentor goes to the one who gets it
Question 7. Business in network marketing: how long to build it and how much can you earn? Sonya, 35 years old, Kaluga
If we are talking about incomes above average salaries in your city, then there are a lot of examples when people from two weeks to two months go to such incomes.
This is natural during daily meetings on the technology of building organizations and full immersion in this direction.
There are also people who in SM for years simply receive additional income, plus their salary at their main job. At the same time, their employment is minimal and is not aimed at getting big money.
You can earn as above average: from 70 to 80 thousand rubles per month (1.5-2 thousand dollars ), and already good enough money from 150 to 500 thousand rubles ... Almost all companies have examples of income from 1,000,000 rubles per month. Particularly successful entrepreneurs make money in network marketing 1,000,000 $ per month !
Payments come every three weeks when the current directory is closed:
Arrival at the end of August 2018
Received mid-September 2018
Question 8. Can I do network marketing at home over the Internet? Vladimir, 28 years old, Moscow
Vladimir, yes, it is possible. The main thing is your desire to acquire new skills and apply the existing ones to achieve goals and realize your dreams. Now via Skype, Instagram, WhatsApp, Telegram, Viber and other online platforms, you can show presentations and exchange any data.
It doesn't matter what city your potential partner is in, their turnover will also help increase your income.
Question 9. How to build a network in MLM remotely? Dmitry, 25 years old, Kursk.
The main thing is to build an organization on a duplicated system and create joint online meetings, conduct training for future partners.
Smoothly typing a team in your wall point, add friendly meetings. Moreover, leaders in other cities repeat after you, and on the same days create the same meetings around them.
Learn to ideally do it yourself, and then teach your wards to do the same in relation to their partners, and then you have a "book will write books."
Question 10. How do you rate the quality of cosmetics and other products in network marketing companies? Svetlana, 29 years old, St. Petersburg
If we are talking about companies that have passed the selection criteria (see above), then these products are very competitive in terms of both price and quality.
If this were not the case, then customers in 100% of cases would prefer the products of the "classic promotion" companies and the network marketing companies would not exist for a long period of time.
I enjoy using the products of my company and even recorded a short motivational video on this topic:
conclusions
Can you make money in network marketing? - definitely, yes! However, this is not a panacea and not a perfect business. As I already wrote, it has its own advantages and disadvantages.
If you seriously engage in business in this area, you can get both financial freedom and a temporary resource to create your own lifestyle.
As in any other issue, it is very important to treat an objective approach to the study of the topic.
Such a phenomenon as MLM has existed for decades and has raised thousands of millionaires during this time. Who knows, maybe you will become one of them.
The main thing is, do not be lazy and carefully analyze the company, the client or partner of which you are going to become.
I wish you success in your network business and see you in new articles!
PS. Friends, and you have encountered network marketing in real life, maybe you yourself are clients or partners of such companies? Share your opinion on the topic in the comments, ask questions and I will definitely answer them!
With respect and faith in your success,entrepreneur and expert
business online magazine "PAPA HELP"
Rinat Admiralov
Network marketing or MLM business has existed for a long time, but nothing is said about it in schools and universities, so this topic is still covered with a veil of myths and stereotypes. I wrote this article for those who have encountered network marketing themselves and consider it as an option to make money, become an entrepreneur and go out to passive income. I will try to reveal the truth so that you are not hostage to myths and stereotypes and I will share my vision of how to make the most of this business. If you think that I am wrong in something, write about it in the comments.
MLM business what is it decryption
For those who are not in the know: MLM is MultiLevel Marketing, which translates as multilevel marketing. This is a distribution scheme for goods and services, in which a company attracts distributors who have the right to attract new distributors for a fee.
1. Divorce for suckers, a financial pyramid
Network marketing or MLM business - what is it really?
4.2 (84.14%) 29 vote [s]Consider the answer to the popular question: "network marketing - what is it?" There are many companies on the Russian market that work on this principle, and many people have tried their hand at them. The reviews are ambiguous: some consider MLM to be an ideal job, while others - almost a financial pyramid. Finding out if network marketing is a real way to make money or is it nothing more than a scam?
Network Marketing, aka MLM
The concept of "network marketing" came to Russia in the late 1990s. Sometimes this type of sales is called "multilevel", from the English multilevel marketing or simply MLM. The principle of this sales technique is the sale of goods through a network of distributors, in the role of which are individuals. They are engaged in direct sales of products, and also receive a commission for each attracted participant. This is a rather complex definition.
What is "network marketing" in simple terms? This is the principle of selling goods through a network of agents. An agent's profit directly depends on his entrepreneurial spirit and ability to sell. In MLM, products are primarily sold to friends and also through social media. You can increase your earnings by attracting new members to the network - a commission is charged for this. Thus, a multi-level network of sellers and buyers is created who sell goods to each other.
In fact, such companies are well known in Russia. For example, "Avon" and "Oriflame". There is nothing illegal in their activities. With due diligence in MLM, you can really build a career, make good money and self-actualize. This is work with a flexible schedule and actually for yourself. Social networks can significantly increase the number of potential customers.
Network marketing is one of the modern sales methods
Network Marketing Challenges
Network marketing solves several problems. They can be divided into 3 categories: manufacturer tasks, distributor tasks and customer tasks. The manufacturer, with the help of MLM, creates an effective way to market products through a network of agents interested in sales. He does not need to maintain stores, hire staff and pay him a salary, and also spend money on advertising.
For agents, network marketing solves the problem of building a career or even their own business with a minimum of investment. A team in a network business is an analogue of the staff of its company with the difference that it does not require documentation, the maintenance of a wage fund. Another challenge is personal development and motivation.
Network marketing helps buyers to buy goods at better prices: the cost of goods decreases, because it does not include advertising, rental of premises, utilities and other related costs.
Differences from the financial pyramid
Network marketing is not a pyramid scheme, despite the fact that there are certain external similarities. It should start with the fact that MLM is legal, and for organizing a financial pyramid, a criminal penalty is imposed. In network companies, agents are engaged in the sale of real goods, and their earnings are derived from this. The pyramids do not conduct any business activity, and their income is limited only by the money of new participants.
Recruiting in an online business - that is, attracting new members - is optional. You can only engage in sales and not invite other agents, however, earnings will be slightly lower. The participants in the pyramid scheme are obliged to find new depositors, because without this there will be no income.
The similarity between MLM and the pyramids is limited by the presence of an entrance fee. Only in the network business, a participant buys products for an entry fee, which he can then resell. In the pyramid, the money goes to other upstream investors and is not returned to the participant in any way.
Scheme of work
Why is network business profitable? Because the MLM scheme is cleared of all unnecessary things. The structure of the work of such companies has been built for decades, therefore it is cleared of all unnecessary things. This business assumes a flexible schedule, work outside the office and directly with clients. Refusal to rent premises and expensive advertising helps to reduce the cost of products, that is, to make them more attractive to the buyer.
There is no linear leadership and subordination, which allows agents to feel more independent and free. Let's consider in stages how network companies work.
Manufacturer - distributor
A manufacturer who decides to sell his products according to the principle of network marketing is looking for partners who buy or receive consignments of goods on special terms. Individuals act as partners (in rare cases individual entrepreneurs). The manufacturer and the partner enter into a cooperation agreement.
In the agreement, by mutual agreement of the parties, the following conditions may be established:
- attracting new partners;
- minimum volume of monthly sales;
- adherence to company principles;
- use of the manufacturer's products by a partner.
With the help of network marketing, cosmetics and perfumes are most often sold. products for doom and food additives
Second level partners
The first partners invite the next participants who will perform the same functions. The difference is that the first partner receives dividends for their work. From this moment - with the involvement of new agents by the first partners - the construction of the network begins.
Partners of different levels are not each other's bosses and subordinates. They are equal, but those who came to the company earlier receive a commission for the work and achievements of each involved. This system is absolutely open, the conditions are initially known to all parties. Thus, each partner is interested in attracting new participants to MLM.
Entry Level Partners
Agents who join the company in the third, fourth and all subsequent queues are called entry-level agents. The only difference between them is that they receive less income because they joined the business later. Otherwise, their rights and responsibilities are no different from higher-order agents.
Recruiting
Each entry-level partner can invite new members and increase their income. The goal of recruiting is to increase your income with dividends for new partners. In MLM, this is not a duty, but a right. If an agent does not want to engage in attracting people, no one will force him. He can only engage in sales and receive income from them.
Social media is opening up new opportunities for recruiting. A few years ago, agents were limited to a circle of their acquaintances, pasted ads and handed out business cards on the street. Now such tricks are not needed. You can search for buyers and new partners on VKontakte, Facebook, Instagram.
Types of network marketing
MLM companies are actively developing, so there are different formats for doing such a business. They differ among themselves in the principles of networking. Types of network marketing:
- Multistage. The most orderly version of work, where the participants are in a strict hierarchy, but do not obey each other. Development is envisaged: from lower levels to higher ones. For example, from representative to director, from director to CEO, and so on.
- Layered. A more confusing scheme, which involves the simultaneous work of several levels of employees. No stepwise development is foreseen.
- Binary. What is a binary? This is the principle of MLM, in which each participant builds only 2 branches, and receives dividends from the entire subsequent structure. That is, he invites only 2 participants, who will then invite the next. The network will deepen, and the first participant will receive a commission not only for 2 invitees, but also for everyone attracted by them.
The types of marketing plans are diverse, but they do not fundamentally differ from each other. Their differences are limited to the internal structure. The principles remain the same: selling products through a network of agents, recruiting new members, lack of subordination.
Network marketing is not a pyramid scheme, despite certain external similarities
Key to Success in Online Selling
Can you build a career in online sales and make a lot of money? The reviews are mixed: some really manage to occupy their niche and receive a stable income, but most of them fail to create income. Then people tend to accuse the network companies of fraud, when in reality there is no fraud.
MLM is sales. The key skill for success in it is the ability to present and sell products, attract and build customer loyalty. How the agent does this - through advertisements, personal charisma, or via social media - doesn't matter.
People who want to make an income in the network business are interested in books and sales trainings. It is important to realize the fact that income depends solely on personal activity and enterprise. The key to success is constant and stable work, searching for new sales channels, loyal customers and recruiting new network members.
Advantages and Disadvantages of Networked Business
MLM companies are already quite developed in Russia, so you can objectively assess their advantages and disadvantages. Reviews about the network business of NL International and other popular companies are mixed. Among the advantages are:
- the ability to receive unlimited income;
- lack of leadership, bosses and coercion;
- prospects for a successful career and even your own business;
- flexible work schedule;
- self-realization and personal growth.
The disadvantages are not so obvious. Firstly, unlimited income in words is in fact limited to sales in a circle of acquaintances, a few subscribers in social networks... Secondly, attracting new members is also not as easy as it seems. The market is oversaturated, many are afraid of fraudsters and are in no hurry to become "agents" and "partners". Thirdly, in order to earn money, you need to be very active. Some hope they will build a “network of partners” and get rich off the dividends. This is impossible, in MLM you will have to work hard, learn and attract new and new clients.
In network marketing, you can make money on the sale of any product if you are active and work hard
Examples of network companies
Many network companies are actively working in Russia, the names of which are widely known to the public. Most often, such companies distribute cosmetics, perfumes, and health products. For example:
The network business NL International sells several product categories at once: slimming products, vitamins, supplements, coffee, cosmetics, hair products and household goods.
- Essence is network marketing. Perfumery, cosmetics.
- "Siberian health". Food, sports supplements, household goods.
- Avon. Cosmetics and perfumery.
- Oriflame. Cosmetics and perfumery.
- Faberlic. Cosmetics and perfumery.
- Mary Kay. Cosmetics and perfumery.
- Amway. Household chemicals and household goods.
- Herbalife. Healthy food products, dietary supplements and cosmetics.
- Vorwerk. Equipment for kitchens and floor care.
- Agel. Edible fruit and berry gels.
Conclusion
Network Marketing is a popular business development model. In this case, products are sold through a network of agents. The activities of such organizations are completely legal, although outwardly it resembles a financial pyramid. With the help of MLM, you can earn and build a career, although it is quite difficult.
Multilevel network marketing or MLM (multilevel marketing) is a popular type of business that, perhaps, everyone has heard of.
However, the knowledge of many is limited only to theoretical concepts. Someone thinks that network business is purely a deception, while others believe that building a network structure is the only way to succeed in life and become financially independent.
Some, not wanting to delve into the study of this topic, perceive network marketing as nothing more than an opportunity to buy good quality goods if necessary. However, with the right approach, this type of business can become a source of income. Let's see what the essence of network marketing is and how to make money from it.
Network Marketing - General Information
In simple words, the definition of "network marketing" sounds like this - building an extensive distribution network and effective product promotion. Translated from English, the abbreviation MLM means - marketing, consisting of many levels.
Multilevel network marketing involves a special form of product sales. Sales are handled by distributors who sell the product and expand the network. The total income is determined:
- own sales;
- the activity of attracted partners, the number of their sales.
It is important! Many do not see the difference between a multi-level business and a pyramid scheme, however, there are several fundamental differences between them. First of all, MLM's business is a legitimate activity, which, with a competent construction of the network structure and close cooperation with a large, well-known company, is guaranteed to bring profit.
Historical excursion
The networked principle of business development first appeared in the mid-30s of the 20th century. It was then that Karl Rehnborg, the owner of a nutritional supplement company, decided to entrust the distribution of products not to sellers, but to ordinary consumers of the product. After the introduction of this form of cooperation, the company's turnover increased to $ 7 million.
In the middle of the 20th century, two employees of Karl Rehnborg decided to independently build a network business and organized the world famous American Way Corporation (AMWAY).
Interesting fact! In the USA, absolutely everything is sold through the MLM principle. There are about 4 thousand large network companies in the world, their total turnover is more than $ 300 billion.
According to experts, the traditional form of selling products will disappear in the near future, and network marketing will replace it. However, on the territory of Russia and the post-Soviet republics, the situation is far from being predicted. Of course, there are network companies, but they are clearly not yet capable of replacing traditional forms of sales.
Multilevel Marketing Principles
The principle of operation of the MLM company in some aspects is similar to the activity of the pyramid - income depends on the activity and level of sales of distributors.
A certain percentage is calculated from the income of each seller in favor of the person who brought this given seller to the network. That is why those who are at the top of a kind of pyramid and have an extensive distribution network are more likely to become successful. The main motivation for distributors is financial incentives, which depend on the level of sales.
The main difference between the network business is cosmopolitanism, it has no geographic boundaries, however, doing business is subject to the laws of the country where the MLM company's representative office opens.
Principles of activity of network marketing companies in Russia
Such companies are prohibited from:
- to announce wages, since an employment contract is not concluded with the client;
- involve persons under the age of 18;
- sell products without quality certificates, licenses, hazardous to health and the environment.
To become a distributor, you must complete the following steps:
- agree to the cooperation of a company representative or visit the company's office;
- fill out and sign an agreement;
- to be trained, as a rule, these are several lessons from a consultant;
- purchase catalogs and product samples;
- start selling the goods.
Important! Starting an activity in MLM, be prepared that you will become a freelancer without social guarantees. In addition, work in such a company does not entitle you to a pension. The main reason why people are afraid of cooperation with a network company is the high probability that the representative office will be closed and the person will be left without work.
Types of MLM marketing
Experts identify the following types of MLM marketing:
- stepped - the most demanded;
- matrix - only 10% of MLM companies choose this form;
- linear;
- binary - suitable for beginners;
- mixed or flexible.
Stepped
A popular form of marketing involves attracting distributors to expand the network in all directions. Payment depends on the number of sales within the branch. The consultant can separate with the group, subject to reaching a certain level.
Matrix
The main difference is a clear limit on the number of participants in each matrix. The most common matrices are:
Where the first number means the number of participants in the first line, and the second is the repetitions of the first generation. As soon as one matrix is \u200b\u200bfull, the next one opens.
Linear
With this form of doing business, distributors are equal, uniform prices for the goods apply. With a linear form, only depth restrictions are provided. The lines created by the distributor are paid for, the incomes increase gradually.
Binary
This marketing scheme is the most convenient for beginners, it provides two branches on the same line. A distributor can invite two people. Income is distributed by agreement - equally, 60% to 40% or 65% to 35%.
Mixed
It involves a combination of several types of MLM marketing.
Interesting fact! Women are more interested and more enthusiastic about online sales than men. There are four women for one male distributor.
Advantages and disadvantages
Among the advantages, experts highlight the following:
- There is always an opportunity to improve the level of education.
Serious network companies conduct training seminars for their employees, meetings with mentors. Unfortunately, training is usually organized at the expense of employees.
- Free schedule.
You are not bound by the clear work schedule that is set for office workers. A person allocates time for work of his own free will. The main thing is to be prepared for the fact that not every day will be financially successful.
- There is no income limit.
With talent, a competent approach and creativity, earnings will increase.
- Financial independence.
Working in a network company is, in fact, your own business, it can be expanded. It is important to understand that the better the products, the easier and faster you will create your own network and achieve financial independence.
- Close-knit team.
In network companies it is always very easy to work, there is no intrigue, newcomers are always helped and supported.
- Fun job.
You are waiting for communication with a huge number of people, you will forget about the boring office sitting.
However, the network business also has negative sides:
- Unstable earnings.
Network marketing does not guarantee constant high earnings and, moreover, the payment of a permanent salary. The larger the network, the more stable the income.
- The need for material investments.
Any network business requires material investments. You will have to buy catalogs, product samples, and even corporate clothing.
- Emotional stress.
As a rule, distributors of products cause irritation and negative emotions in people. You need to learn to take this philosophically and find an effective way to get rid of emotional stress.
The pros and cons, as well as the whole truth about this form of marketing, are written in books that must be read for those who plan to professionally engage in this type of business:
- Don File "10 Lessons on a Napkin" - Business Basics for Beginners;
- Yarnell Mark “Your First Year in Network Marketing” - How to Build a Business from Scratch;
- John Maxwell "Leadership" - how to properly invite people with your own network;
- Tom Schreiter "Turbo-MLM" - the whole truth about the network principle of doing business;
- John Milton's The World's Greatest Networker is an autobiographical book, simple examples of network marketing.
Network Marketing How To Make Money - 7 Successful Steps
Experts note that this direction in business is not easy, but promising. To achieve financial independence, it is important to adhere to certain guidelines.
Step # 1: Company selection
Choosing the right reliable company is the foundation of your future business and success. You can trust a company if it:
- well established in the market;
- offers a high-quality, healthy product;
- has been on the market for many years;
- offers several forms of earnings - active and passive.
Step # 2: Training
If you think you know everything, you will not be successful in the networking business. As a rule, such self-confident people become disillusioned with this form of business. Remember, practical attempts to realize yourself will be more successful if they are preceded by theoretical training.
The most common form of training:
- in the company at special courses;
- from the direct curator.
Step # 3: Working in two directions
Activities should be conducted in two directions:
- active sales;
- attracting new network members.
In the first case, you provide yourself with current earnings, and in the second, you guarantee constant payments in the future.
It is necessary to strive to ensure that the income from passive earnings exceeds the profit from active sales.
Step # 4: Website development and use of social networks
The possibilities of Internet resources are endless. Constant work on your own website and social networks will lead to the fact that potential customers themselves will become interested in the product and earning opportunities.
The most effective way is to contact a specialized company that promotes sites and products.
Step # 5: Planning
Start each day with planning. Otherwise, soon you will begin to rush, get confused, feel chronic fatigue. As a result, important things will be postponed until tomorrow, and this will inevitably lead to a decrease in profits.
Step 6: Development and self-improvement
All companies whose business is built on a network principle regularly hold seminars, trainings and webinars for their employees. Use every opportunity to develop your skills and experience, only in this case your business will flourish and develop. As soon as you stop developing and decide that you know everything, income will stop growing.
Step # 7: Be Better Than Others
Important! Get ready to work hard and hard. Don't expect instant results, the road to success is long and difficult. However, if you show perseverance and leadership qualities, you will certainly achieve your goal.
How to effectively develop your own network
Skeleton and reliable business foundation - partners. According to statistics, the optimal ratio is:
- clients - 95%;
- partners - 5%.
However, searching for 5% of distributors takes up to 95% of the time. Where to look for business partners? Here are some practical guidelines.
Before you start building a network, remember one rule - do not invite everyone to the business, but only those who meet certain criteria and are sincerely interested in distributing products.
Acquaintances
The traditional way of building a network in business. Start by making a list of people you know and then add to it regularly.
When communicating with each acquaintance, be sure to ask them to recommend 3-4 acquaintances who may be interested in the products. Do not be discouraged if most of your acquaintances do not agree to your proposal, you always have the opportunity to return to this conversation after a while.
Announcements in the media
According to statistics, this method has a fairly low percentage of efficiency, while the method is quite costly. Remember that people who have responded to your ad are looking for a specific job and are not interested in growing your business. When writing ads, honestly indicate all the nuances and features of the work, in this case people who are really interested in the network business will be interested in the offer.
Announcements on the street
Quite an effective way to find partners. The effectiveness depends on several factors:
- literacy of the text;
- the ability to conduct personal meetings;
- location of ads.
Possibilities of the Internet
Browse the sites where people post their resumes. Select the most interesting options and call them. Speak the truth, don't hide that this is network marketing.
Post ads on the Internet on thematic sites, forums, social networks. The more information on the network, the more people will respond to your proposal.
It is important! A distributor who uses a company's products automatically attracts customers and partners. Just talk about product benefits and show results.
How to distinguish a pyramid from network marketing
Of course, there are many network companies with a good reputation, but firms with a negative reputation appeared, which masqueraded as MLM. Such companies with negative histories have used the pyramid concept. At first glance, the two principles - network and pyramid - are similar. However, in practice, there are significant differences.
- MLM finances are formed from the products sold by distributors, and in the pyramid - from the contributions of each participant.
- To become a member of the pyramid, you need to make an initial payment or buy completely useless goods for a large amount.
- The network company does not recruit people, but trains them. In the pyramid, the situation is completely opposite.
- The organizers of the pyramid are excellent specialists in psychology, in the process of recruiting they play on the basic human feelings - greed, fear, stupidity.
It is impossible to win in the pyramid, it is built according to the principle - all losers pay for a comfortable life for several founders of the scam.
Features of network marketing on the Internet
Any business can be successfully developed online. A multi-level company is no exception in this sense. The Internet opens up almost limitless possibilities for promoting goods and building your own network.
The features are as follows.
- Lack of geographic boundaries. You can sell goods all over the world, you do not have to be present at the deal.
- Sales can be done anytime, anywhere.
- All processes are automated.
- Communication only with the target audience and stakeholders.
- A wide range of tools for product promotion.
Leaders in the network market
Summary
Undoubtedly, the MLM industry is a promising business area, since such companies easily survive economic crises without reducing profitability. According to statistics, 20% of billionaires started their careers in a similar company, and the average profit per person is 4 thousand dollars a month ... The statistics are attractive enough, but it will take a lot of work and communication with people to be successful.
A detailed article on what network marketing is, what the three letters "MLM" mean, what advantages and disadvantages such a business has, how they make money on it, recruit distributors, why this type of activity is dangerous and why you should not become part of the "pyramid".
The beginning of the path of network marketing falls on 1945. Its foundations and principles were laid in America by two entrepreneurs, William Casselbury and Lee Mitanger. A similar field of activity came to Russia and the CIS in 1990. Since then, millions of people have been involved in it and new network companies have opened.
Despite the fact that this type of business is widespread, many do not fully understand what network marketing is, what advantages and disadvantages it has, and why it is dangerous. It is all this that will be discussed below.
What is network marketing and how does MLM stand for?
Network marketing is a type of business that is based on selling various products and attracting sellers. The seller of the goods receives income from each attracted seller. The seller, in turn, attracts new sellers and already has his own percentage of profit from them.
If you look at the entire structure of such a business, then it will be in the form of a pyramid. And the one who is at the top earns the most.
The abbreviation MLM stands for Multi Level Marketing, which means multi-level marketing. In common people it is called a "pyramid".
In network marketing, products are most often used that cannot be found in conventional stores. These can be dietary supplements, kitchen utensils, cosmetics, etc. A vivid example of this is the well-known Oriflame or Faberlic - the products of these brands cannot be found on store shelves. Moreover, 90% of goods are produced outside the CIS.
At first glance, network marketing may seem like a pretty easy way to make money. Yes, some millionaires and billionaires claim that it was on MLM that they made their fortunes. However, most people, not only in Russia, the CIS, but also in the world, avoid this dubious activity. And there are reasons for that. But they will be discussed below. To begin with, it is better to consider all the positive and negative aspects of network marketing.
The light and dark side of network marketing
First, it's worth demonstrating the benefits of network marketing in order to understand why it still exists.
MLM advantages
- Anyone can get into network marketing. This does not require experience, special education, registration of entrepreneurial activity and other points necessary for a traditional business.
- Network marketing can be an additional source of income - small, but still. This is a good option for students or moms on maternity leave.
- Unlimited income, which people sitting at the top of the "pyramid" talk about, really is. But few - even a few - can make good money with network marketing. To get decent money, you need to be a purposeful person who knows how to find an approach to people, and have a lot of free time in the store.
- Financial freedom is also present here. It consists in the fact that the seller has no bosses, and the profit depends only on himself. Freedom also means the absence of a work schedule - you can work whenever you want. However, you shouldn't take financial freedom literally. Rather, it consists in not depending on the wallet of parents, relatives or husband. And this does not guarantee a complete absence of money problems.
- Network marketing gives you the opportunity to try yourself as an entrepreneur and open your own business, which you need to promote yourself. Here you can learn several useful skills, such as, for example, the ability to communicate with different people and build business relationships with them. In the future, if it turns out to create really profitable business in another area, then all the skills acquired in MLM will be useful.
- Team cohesion is the only virtue of network marketing. Indeed, the team of network companies is friendly and responsive. Each new member of this team is assigned a teacher who willingly helps the newcomer (naturally, for his own benefit). Network companies regularly conduct various master classes, seminars and trainings, which, again, unites people who are passionate about one thing.
All of these benefits are present in network marketing, but some of them should not be taken literally, such as financial freedom. Yachts, villas, expensive cars and living abroad in a penthouse are definitely not to be expected.
Now about the dark side of the "pyramid".
Network Marketing Pitfalls
- Lack of stability is one of the main disadvantages of MLM. It is expressed in the volatility of income. Such an occupation can become an income, but by no means a permanent field of activity. Although, again, motivated people are still capable of achieving good results. But this will take a lot of time, money and effort, which can be invested in the implementation more.
- There is a very large psychological burden in MLM. Most of the people whom salespeople turn to react negatively to outright “pushing” something. Clients are especially negative about obsession. Therefore, salespeople of network companies often encounter inadequate people. Moral difficulties also arise due to the fact that after some time the seller himself will teach someone to sell, and here you need iron restraint, since there are people who quickly grasp everything, and there are those who are not inclined to quickly absorb all information and apply it correctly in practice.
- Whatever the mentors say, network marketing requires a beginner monetary investments... He must buy a product for his own money, and then sell it at different prices with a percentage from this. Accordingly, there is a risk of losing money. That is, a person bought a product, but no one bought it from him, and he does not need it either. Financial losses can be from 1,000 rubles. up to more than 50,000 rubles.
- In network marketing, there is responsibility for others. If the seller has attracted a person to the team, then he is responsible for him, is obliged to help him and solve any work issues. And not everyone is capable of being a mentor and taking responsibility for someone.
These are not all the pitfalls of MLM. After all, there are a number of other risks that make most people unwilling to join the ranks of network companies. But more on that later.
Now it is worth considering in detail the ways of making money. That is, how and with what people earn money in network marketing.
How to make money on network marketing: the principle of building a business
The whole essence of building a business in network marketing is to create a network of distributors (sellers) of goods. And the more they are in the pyramid, the better.
For example, a person started working in a network company. He was attracted to her by a specific person who is assigned to him as a mentor. A person is taught everything there is to know, he buys a product and starts selling it. At the same time, in parallel, he is in search of new distributors, whom he will train, and receive from them his percentage and additional bonuses (incentives).
Getting new sellers is pretty easy. The person is correctly "processed", told about the prospects, how much can be earned, and that he will have huge discounts on all goods and he is entitled to free gifts. That is, they begin to flavor a person with a bright future, their own dignity, and additionally play on a simple human feeling of greed.
Not only the product itself is sold to future sellers, but also images of a bright and rich future. With the help of such techniques, gullible and impressive people are drawn into the "network". That is, there is also a share of psychology in this business.
From the above methods of attracting new members of the "pyramid", it becomes clear why the common people call network marketing a sect. There are some significant similarities here.
In principle, it is extremely difficult to call MLM a business, in its usual sense. Since everything is built here on deception and illusion. Only those who sit at the very top of the main pyramid make money in network marketing, and the lower ones work hard and do not receive the promised riches.
The main task of network companies is to quickly and in large quantities sell their products or goods. And how this will happen, they are not at all interested. Only distributors are interested here - the more you sell and attract, the more you earn.
Everyone can independently judge the honesty of such a "business" or earnings. But a number of facts, not in favor of network marketing, remain indisputable.
Now the time has come to consider all the existing risks and dangers that are fraught with the "pyramids".
Why network marketing is dangerous
Scientists have long conducted a number of studies that prove that network marketing is no different from a totalitarian sect. They recruit in MLM just like in a sect. A potential salesperson is skillfully brainwashed. Moreover, according to a specific technique, which provides for a certain fetish of one's own chosenness, missionary work (just like in a sect), elitism and significance.
After a person has been "cuddled", they begin to tell him about a carefree future and complete financial independence. Do not forget to mention the "freebie" that a person regularly gets. All this is fed to the brain of a potential distributor in the correct portions, and at the end it is simply squeezed that it is no longer possible to refuse the "tempting" offer.
Seminars of network companies are a separate story altogether. Always smiling people come to them, who are happy with everything around them and dreaming of the immense wealth that MLM will bring them. And speakers at seminars only fuel these feelings in people.
The newcomer was recruited, now he needs to sell the product. Naturally, the newbie agrees and pays for his first wholesale purchase in the hope of quick sales and easy money. But as a result, things are not so simple. Not as the "teacher" promised.
Naturally, the newly-made "networker" is surrounded by sane people - relatives and friends. They begin to explain to him that this is not a business at all, but only a deception and he will not earn anything on this. And here quarrels and loss of friends begin. The person remains practically alone with his "correct" opinion.
Regardless of the success of sales, a person starts investing money in his business - buying a new product. In doing so, he drags himself into debt.
The danger of making such a living is that newcomers with brain fog are unable to think soberly. For example, they do not understand that before entering any market, they need to analyze it and understand whether the offered product is needed by consumers at all. And if the market does not need this product, then it is extremely difficult to sell it.
As a result, it turns out that the money has been spent, the goods are lying and nobody needs them, there are already debts, but there is nothing to give them back, since no one will return the money for goods purchased in bulk.
Moreover, even if the product is more or less sold, then such an activity is illegal. entrepreneurial activity... And at one point, a person comes to the attention of the tax office. As a result - a punishment with serious amounts of a fine. Moreover, for tax evasion now you can get a real term.
And, of course, the biggest danger in network marketing is that it pulls people into a swamp. Then it is extremely difficult to get out of it.
From the information above, you can see that MLM is really dangerous. Making money on it is difficult, but losing money is easy. Network marketing is truly a sect, but not in its traditional form.
In conclusion, it is worth drawing some conclusions.
You can really make money on network marketing. But how big is this earnings? It is impossible to call MLM a business - more like extra money. The fact that such a field of activity is dangerous is a fact. Whether it is worth trying yourself in such a "pyramid" is undesirable, but this is everyone's personal business.