The best network business. Network marketing companies in Russia. What is modern network marketing: terms and definitions
What is network marketing - a path to success or a mythical way to make money? Historical facts about MLM + pros and cons + TOP-5 companies in the Russian Federation.
What is network marketing?
Most people agree that these are some kind of fraudulent schemes that allow only happy few people to earn money.
Such thoughts are connected with the main problem of MLM - these are extremely high promises to customers.
Today, after reading the article, you will learn what the essence of network marketing operations is.
And, of course, you will get an answer to the question: is it possible to get real income using such a business scheme.
What is network marketing: historical background
Network marketing (MLM) in its current form was not a separate business development model. It appeared as a manifestation of the need to sell goods.
Who was the first to discover such a scheme and become the founder of a network business?
The founder of the first network sales scheme is Karl Rehnborg.
If the thought occurred to you that this person built his policy for decades before starting a business, this is not so.
All complex things began with a banal approach.
Carl Rehnborg grew alfalfa on his property. At that moment, an idea hit his bright head:
“But what if all the useful substances from alfalfa can be converted into an edible form for humans, so that its intake can increase the vitamin tone of the body?”
Undoubtedly, Karl had a good purpose.
Later, he opened his own line of healthy food and began to offer it to friends and work colleagues, explaining the usefulness of the new product.
It is interesting that, out of the kindness of his heart (no other reason can explain this), Karl distributed goods just like that, without demanding any money in return.
What do you think was the effect of promoting free useful products?
No. Nobody believed Carl. Everyone was very embarrassed that a person can simply give away a useful, worthwhile product.
Carl Rehnborg came to an unexpected conclusion: if a nutritional supplement is sold at the average market price, and not just distributed to friends, demand will appear.
And hit right on the spot!
Karl began to use this business scheme, thus giving rise to one of the main postulates of MLM - mutual assistance and team support.
Rehnborg's friends started buying his merchandise. It no longer seemed to them that this was a cheap hoax for one simple reason - it ceased to be cheap.
Then Karl began to look for new ways to expand the network of buyers. And again came to the correct conclusion!
They consisted of a percentage of the sale of nutritional supplements. Now you know the scheme of work of a standard network company? That's how it all started.
The result of the work of Carl Rehnborg:
- 1934 - Carl founds California Vitamins, thereby expanding the range of products sold.
In 1934, Rehnborg renamed the company Nutrilite Products.
The principle of operation remains the same.
A whole network of distributors of products, the so-called partners, was formed.
Each partner attracted new employees by offering a percentage of product sales and dividends for quality organizational performance.
Karl Rehnborg is known throughout the world as the "father of the network business."
After a short historical sketch, it's time to turn to the realities of the modern MLM business.
What is modern network marketing: terms and definitions
Network marketing- this is one of the types of retail sales of products, based on the direct, direct interaction of sellers with consumers.
A feature of network marketing is the ability of each client to become an implementer.
It would be most correct to compare the network business with a multi-level dealership. MLM also consists of several levels.
No wonder such organizations are often called financial pyramids!
Let's take a look at the main components.
The first step of the pyramid: manufacturer - distributor
The first stage of activity under the MLM scheme is that the manufacturing company provides its products to a partner.A partner is a natural person who enters into a cooperation agreement with a supplier.
On the territory of the CIS, this contract is not included in the labor format, i.e. does not provide you with social guarantees, has a special form of taxation.
The terms of the contract have similar clauses in any area of the network business:
- obligatory use of the manufacturer's products by the partner;
- attracting new partners to the organization;
- work according to a clear scheme defined by the organizers;
- unquestioning observance of the moral principles and policies of the company;
- minimum monthly sales.
Subject to the execution of each clause of the contract, according to MLM, you get access to unlimited earnings.
Second Stage: Second Tier Partners
From the second order, the whole essence of the scheme of MLM activity begins.Each partner who was invited by a higher-level participant (Stage 1) performs all the same functions as his curator.
The only difference is that part of the sales income remains in the pocket of the superior curator.
Each participant, as a result, seeks to form his own structure, as this brings real income in the form of dividends from his own sales and the activities of "subordinates".
P.S. The word "subordinates" is deliberately put in quotation marks: in the structure of network marketing there is no concept of line management.
All relationships between colleagues at various levels are based on mutual assistance - this is simply beneficial for all partners.
Step Three: Entry Level Partners
Lower-level partners differ from the founders only in that they have a lower income. At the same time, functional responsibilities, as units of MLM, are unchanged.
Work at the first or second level involves the manifestation of maximum activity not in the sale of products, but in the promotion and formation of one's own structure.
An intermediate conclusion should be drawn:
The scheme of interaction of network sales involves the development of the structures of each employee.
The explanation of this process is very simple - each subsequent implementer receives a percentage of sales + dividends from the entire network organized by him, as a percentage of the profits of "new" participants.
Network marketing - is it that simple?
The concept of network business and MLM structures has negative associations, especially in the CIS, where people have been taught by the bitter experience of financial pyramids.This section provides the reader with a comprehensive overview of how network marketing works - an unbiased assessment of the income opportunity.
Benefits of network marketing
Lack of a linear system of leadership.
You work for yourself, which is very similar to entrepreneurship.
Close-knit team.
Each partner is interested in supporting "junior colleagues", as it brings him financial benefits.
There will always be a person who will help organize your network activities in the right direction.
Curating is the backbone of network business.
Opportunity for continuous growth.
Another positive aspect of MLM.
It all depends on your abilities, including earnings.
A lot of experience in interacting with people.
This is a useful skill for everyday life and the development of your own entrepreneurial project.
Network business can be considered as a platform for further implementation of one's own business.
Flexible schedule.
Representatives of MLM structures can work from 10 to 30 hours a week, thereby combining it with work or study.
You must understand that network business cannot replace the main source of income.
At least in the early stages of activity.
Negative aspects of network marketing
Possible destabilization of the network structure at any time.
This process may be triggered by the activities of individual partners, which will not meet the company's standards.
You must consider the possibility of the collapse of the entire structure, as many years of experience of MLM participants proves such a possibility.
Undefined payment standards.
An example is the American company Starcom, whose representatives promised high payouts to each participant.
As a result, partners took out loans, pledged property, and the company paid less than 25% of the announced amount.
It is not difficult to guess what material damage customers received.
Opportunity to get into the financial pyramid.
Imagine a situation in which you invested in an MLM structure by purchasing an initial package of products.
Several months pass, the structure of clients expands, they also make deposits, buy products.
Another month passes, you have not yet been able to cover even your own expenses, since the goods are not in demand.
The company is closing...
In this situation, approximately 50% of the participants remain without profit.
They were unable to sell the product, but made a significant investment.
If you have never dealt with entrepreneurship, it will be very difficult to “resist” in the MLM mode of operation.
The specificity of the activity lies in the constant moral tension, since you are responsible for your sales and the entire organized structure.
After analyzing the pros and cons of network marketing, you can assess the degree of risk of such a business activity as quite high.
A feature of working on a network scheme is the constant responsibility for one's work + training and control of lower-level partners.
You already know what network marketing is and you can independently assess the prospects for development in this direction.
If you are confident in your organizational talent, as well as the abilities of a manager and financier, it's time to move on to choosing an employer.
Network Marketing: Choosing an Employer
Your network income and confidence in stability depend on the right choice of employer.To begin with, it is necessary to consider possible options for the Russian business space.
Top 5 Russian MLM market
| Network company name | MLM market share (%) | Description of activity |
|---|---|---|
 | ~30 | Sale of cosmetics, pricing policy - acceptable for the middle class. Get ready to meet a huge female team and find your place in it. Network activities in AVON are more suitable for girls. |
 | ~30 | Marketing sphere - cosmetics, souvenirs, healthy food. One of the leaders of the Swedish MLM market. The advantages include increased loyalty to their employees. Working in this network company will allow you to have a small but stable income. |
 | 8 | Stability is the most appropriate word to describe the activities of AMVAY. Marketing sphere - from household utensils to dietary supplements. Unlike the companies mentioned above, it provides equal chances for development, regardless of the gender of the employee. This fact is derived from the wide range of products on offer. |
 | 5 | A company that only accepts women. Specialization - cosmetics, products for the care of appearance. One of the most experienced network organizations, but still not widely spread on the Russian market. |
 | 4.5 | Leading manufacturer of natural cosmetics. It is one of the most progressive companies on the Russian market, it has a strong base for network marketing. |
The main criterion for choosing an MLM company is experience in the market. This is explained very simply: you will get the expected result, verified by others.
It is dangerous to work for the "newbies" of the MLM market, because you cannot be 100% sure that all obligations are true.
You can learn about the many benefits of network marketing from the video:
What is network marketing? After reading the article, you are already able to independently determine the meaning of this term.
Network marketing evokes a subjective attitude in every reader.
With 100% certainty, only one thing can be said - making money working in the MLM system is possible and cannot be argued with.
A completely different question - will it be possible for you to do this?
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What is network marketing, what are its pros and cons? Which MLM business companies are popular for 2018? How to make money in the network business the first money?
Hello, friends! This is Alexander Berezhnov, an entrepreneur and one of the authors of the HiterBober.ru website.
Today, the network marketing industry is gaining a new wave of popularity, and the development of the Internet plays a significant role in this.
However, this concept is still controversial in society. Someone calls network marketing almost the only opportunity to open your own business without investments, others are sure that this is all a pyramid scheme, a scam and a hoax.
Some time ago, I myself was involved in network marketing and I know firsthand what it is. In this article, I decided to dot the “and” and reveal this topic from all sides, including taking into account my experience in this industry.
After studying this article, you will firmly decide for yourself whether it is worth doing an MLM business, what are the pros and cons, and also find out which companies are better to start in and why.
So, let's begin!
1. What is network marketing (MLM) and what is its essence?
I'll start with a definition and then expand on it and give examples.
For example, the production cost of ORBIT chewing gum ranges from 20 to 50 kopecks per pack of 10 pads. However, while the gum is on the counter in the store, its value increases by several thousand percent! It's all the fault of intermediaries - large and small wholesalers who sell chewing gum to each other.
But everything does not end there, because, as you know: advertising is the engine of trade and intermediaries spend a lot of money on advertising.
Fact
In large companies, up to 50% of the final cost of the product is the cost of advertising and promotion of the product.
Thus, we buy Orbita packaging for 20-50 rubles. Yes, this cost, of course, includes the manufacturer's own margin, but intermediaries also want to eat. So it turns out that the end consumer suffers, who overpays at exorbitant prices.
About a hundred years ago, people thought about the problem of unreasonable markups of resellers and intermediaries.
Network marketing idea
Make the process of promoting goods (services) more convenient, cheaper and faster. Remove intermediaries and expensive media advertising from the promotion scheme.
This can be done if the people themselves tell each other about the product of the network company, and their motivation will be the percentage that they will receive from the sales of the products of the MLM company.
But you won't earn much just on interest. Therefore, multi-level marketing allows you to build your own business by creating a wide network of product consumers.
It is assumed that a person who has developed his network structure will receive a percentage of the entire turnover of his structure. That's how he can create himself tens of thousands of dollars a month.
Be sure to watch the video below to learn how you can create such an income in mlm. This is a cartoon about Pablo and Bruno - ordinary guys who chose different ways to gain financial freedom, and both wanted to become millionaires. Let's see what they got.
Network marketing was designed to solve the following tasks:
- Reduce the cost of goods for the end consumer. This can be achieved by moving away from expensive standard advertising on radio, TV and the Internet.
- Accelerate the process of delivering goods to the end consumer. It is achieved through well-thought-out logistics (network of own warehouses in different cities and countries).
- Avoid fake goods. In the process of resale of goods, it is possible to substitute it and falsify large quantities. The MLM company works directly with the end consumer, so the likelihood of product falsification tends to zero.
- Motivate company employees with money and business opportunities. In multi-level marketing, there is an opportunity to make good money and build your business from scratch.
2. How network marketing works
To begin with, I will tell you about the general principles of the work of this industry.
The manufacturing company has its own factories for the production of goods.
She sells these products without stores, products are distributed thanks to a built-in system of recommendations. In everyday language, this system is called "word of mouth".
A large number of people like this principle and they are happy to buy goods from the company.
Now all orders of an MLM company can be placed via the Internet, and paper catalogs that were popular some time ago with the development of information technology are fading into the background.
The customer uses the products and can start building a business with a direct selling company. To do this, he needs to find several people who will constantly buy products and attract new business partners to develop the network. That is why this type of marketing is called network marketing.
Having its own warehouses and delivery services, the network company delivers products to the warehouse, and then these products are delivered to the offices that the company's partners (distributors) have personally opened for themselves. Sometimes the company delivers the order to the client directly to the house, which is very convenient.
Now I will talk about the features and principles of multi-level marketing for the manufacturer of goods (company), for the end consumer (client) and for the person who decided to open his own business (entrepreneur) using the capabilities of mlm.
From the point of view of an MLM company
A distinctive feature of the promotion of goods in a network way is to reduce the cost of advertising their products. The company cares more about promotional materials for its distribution partners (sometimes called independent entrepreneurs) and building a system of professional training (mentoring).
It is from the qualitative transfer of the MLM idea from person to person that the business of the enterprise ultimately depends.
From the consumer's point of view
It is convenient for the client to receive goods with a quality guarantee, he likes affordable prices, samples, catalogs. Often, direct selling companies have exclusive products and accessories that cannot be found in regular stores.
From the perspective of a distributor (entrepreneur)
People who want to start their own business without investment can succeed here. After all, the whole system has already been built, the market has been formed, most of the large companies are already on the lips of the population. In addition, a powerful system of training and mentoring in network marketing companies makes the opportunity to build your own business more than real.
3. MLM business industry - history and development trend
Network marketing originated in the West in the USA.
In 1945, American entrepreneurs Lee S. Mytinger and William S. Casselberry started their own business, becoming the national distributors of Nutrilite Products. The basis of their activities was the principle of recommendation (network) marketing.
Further, in the late 1950s, two companies were created in the USA: Shaklee and Amway. In Russia and the CIS countries, people are widely familiar with Amway products and the peculiarities of its business. The company itself was founded in 1959 by Rich DeVos and Jay Van Endel and was originally called the American Way Corporation.
The industry developed especially rapidly in the 1980s and 1990s. The range of products grew and by the mid-1990s, mlm-manufacturers offered their customers literally everything: from cosmetics and detergents to automotive products, household appliances, long-distance communication services and computers.
Today, the network marketing industry has undergone great changes and almost all mlm companies have gone online in one way or another.
In 1996, Russia established Direct Selling Association(rdsa.ru), which contributes to the development of the industry, its self-regulation and maintaining the reputation of the network business at a high level.
According to the Association for 2015-2016 in Russia, one way or another, multi-level sales are involved 6% of the total population(distributors), and these are millions of people, not counting consumers.
The Internet space has allowed the industry to develop at a rapid pace. And this is quite logical.
Example
You can now build your business in a network marketing company not only through face-to-face meetings at home or in a rented office, but also via the Internet, using the capabilities of Skype, e-mail and social networks. Advanced entrepreneurs create their own websites.
This is exactly how “networkers”, as it is customary to call distributors of products of multi-level companies, are now actively processing the online space in order to expand the membership of their group (branch).
However, the development of digital technologies has also given rise to another side of this industry - the emergence of fraudulent companies and financial pyramids, which, under the guise of investment funds or just respectable mlm-firms, draw honest people into illegal and immoral schemes.
Later in the article, I will touch on the issue of fraud and tell you what not to do and how to distinguish a reliable network company from a scam.
4. Why do many people today associate network marketing with a pyramid?
In continuation of the previous paragraph, as promised, I will reveal the “pyramidal question”.
The association with pyramids, deceit and fraud in people arises rather out of inexperience.
I must say right away that there is the concept of "classic marketing" and "network marketing", although it is very conditional. For the sake of completeness, let me tell you how they differ.
1. Classic marketing
These are all the ways and means of promoting goods that we are used to seeing around - advertising on TV, radio, outdoor advertising, and so on.
Selling goods in stores is also a standard way of promotion. As a result, all this can be attributed to the concept of "classical marketing".
2. Network Marketing
This is just an unusual way for the bulk of people to distribute goods. It, as you know, is also called multi-level marketing.
In this concept of promotion, there are no retail stores familiar to many, there is no standard advertising in crowded places, and the goods themselves, as a rule, are of a higher quality in comparison with their familiar counterparts.
Unusual for many, the model of distribution of goods instills fear in those who have heard about various kinds of deceptions or have already fallen into financial pyramids.
Dear readers, remember!
Network marketing has nothing to do with pyramid schemes, fraud or illegal activities.
Associations with the pyramid arise because both in the pyramid and in mlm you need to attract people in order to earn.
Only in the first case, you get money for "heads", that is, your earnings depend from the number of people involved, who invested money in the pyramid, and in the second - the income depends on the turnover that the clients you attracted will make.
That is, if we are talking about normal multi-level marketing, you can sign at least 1000 people into your structure, but if they don’t buy anything, then your income will be zero.
In the pyramid, the opposite is true, where everyone attracted is obliged to make a contribution, usually quite significant (from 500 to 5000 dollars) and you are guaranteed to receive a percentage of his money, and your client will not receive a real product. He pays only for the opportunity to earn money by attracting new “victims”.
Below, in the answers to frequently asked questions, I have clearly outlined the criteria by which you can distinguish a good mlm company from a pyramid scheme.
5. Network marketing on the Internet without investment - myth or reality?
There is no myth here and cannot be. Building your network business via the Internet is a new trend that is gaining momentum every day.
How to find a client in your mlm structure via the Internet - 5 proven ways to attract:
- Social networks. One of the most popular ways. You can create here a group (community) on the topic of earnings and self-development. The people who enter will be your potential customers. You can also “spam”, that is, send messages to everyone in a row, but then you risk getting your account blocked by the administration of the social network.
- Thematic forums. In the forums about earnings and personal growth, you can also find future partners in your multi-level structure.
- Contextual advertising. You can create a website and set up contextual advertising on it, thereby attracting targeted visitors. There is already an article on our site,. However, this method can be quite expensive for such a purpose.
- SEO - promotion. By analogy with the previous method. You can make your own Internet resource and write articles on it containing keywords related to success, earnings and network marketing. Gradually, these articles will be promoted through the subscription form located on the site, and you will receive people loyal to your activities.
- Lead generation. This method consists in creating a flow of contacts (applications) of potential customers whom you will attract with various advertising tools. You can learn more about what advertising is and what types of advertising exist from. You can process applications of potential customers (leads) and attract them to your multi-level marketing company.
You can use these and other ways to attract potential participants from the Internet to your network structure.
6. Pros and cons of network marketing - an overview of the main advantages and disadvantages
Network marketing, like any phenomenon, has a number of advantages and disadvantages.
That is why there are people who fiercely campaign for mlm, and there are those who are afraid of "network". For clarity, I have compiled a corresponding table that reflects almost all aspects of the SM:
Pros and cons of network marketing:
| № | Comparison criterion | pros (+) criteria | Minuses (-) criteria |
| 1 | Opportunity to start your own business | You can open an MLM business with little or no investment and create passive income over time | Many novice distributors leave the business in SM, as it grows slowly and you often hear rejections |
| 2 | Doing Business Online | The unlimited possibilities of the World Wide Web provide practically limitless opportunities for the growth of your business. | Not all people will agree to cooperate with you and cost business with your company, since getting into an interested audience through cold contacts is small |
| 3 | Buying quality goods at an affordable price | In network companies, you can buy really high-quality goods, often their counterparts on the open market are either not available or are much more expensive. | Sometimes the products of multi-level marketing companies are unreasonably expensive, even if they are of high quality. |
| 4 | party, team | For many people in this industry, the very atmosphere of running an mlm business is a way of life and they feel “like a fish in water” here. | For most people, spending time at various seminars, trainings and events of such companies is tiring and does not correspond to their nature and psychological type. |
| 5 | Skill development, personal growth | In the process of work, you can acquire good skills in interpersonal communication, planning, leadership and management | There are not many people who are constantly striving for development, most prefer much more understandable ways of earning money, for example, regular work for hire |
| 6 | Reputation | It is believed that people with leadership and well-developed communication skills will certainly succeed here. | In society, the reputation of network marketing is significantly damaged, so finding like-minded people, and even more so turning them into your clients or business partners, is not easy. |
If you have not yet decided whether it is worth doing SM, then the criteria described in this table will help you once again understand whether it is for you or not.
7. Rating of grid companies in Russia - list of TOP-5 market leaders in 2017-2018
The most interesting thing is that the first two companies Avon and Oriflame occupy 31% and 30% respectively in this rating. This means that these companies are far ahead of our citizens in the MLM industry.
As you can see, Mary Kay and Faberlic have almost the same market share, while Amway is somewhere in between.
In any case, I am sure that you have heard if not about all of these companies, then most of them for sure.
I consider them reliable and I advise you to work with these companies if you decide to go into network business.
8. FAQ - answers to frequently asked questions
These questions are often asked to me, and here I cite them with answers as the most popular.
Question 1: Should a newbie start a network marketing business?
Yes, it is worth it, but only if you are ready to wait a long time for the result (from 6 months to 3 years) and have a cash reserve that will “feed” you in a cashless period. I also advise you to analyze your strengths and weaknesses, objectively assessing your capabilities.
But if you get tired of communicating with people and have a hard time enduring rejection, then you better not rush into this pool with your head.
Question 2. How to earn the first money in network marketing?
To do this, find 2-3 customers and simply sell them your company's products, after registering as a partner in it.
Then you will feel the "taste" of the first money. Perhaps it will be a very small amount: from 100 to 1000 rubles, but it will already be your money earned in direct sales.
If you want to get a more serious amount, then find 3-5 people who plan to build a business with you. Help them find 3-5 more people for each and in a few weeks your income will grow to several thousand rubles a month and will increase as your "branch" grows.
Question 3. What and how can you attract people to network marketing today?
Today, you can attract people to network marketing, as always, with the idea of earning prospects, creating passive income and a free (flexible) work schedule.
The quality of products and the range of direct sales companies is constantly growing, so to say that we have high quality products is no longer so appropriate.
But if you show the convenience of working with the company's website and the possibility of doing business via the Internet, this will definitely impress your potential partners.
Question 4. How to distinguish network marketing from a pyramid scheme?
It's no secret that some scam companies tarnish the honor of decent MLM businesses and masquerade as them.
How to distinguish scammers? There are some characteristic signs of dishonest firms:
Here they are:
- Unreasonably high entry fee. As a rule, it is from 100 to 5000 dollars. It is from this money that the remuneration to the “distributor” is paid.
- The product, as such, either does not exist at all, or has no market value outside of this organization.
- There is no documentary confirmation of the fact of receiving money and other relevant documents (invoice, contract, checks, etc.);
- You are told that you will receive money from number of attracted participants rather than from the turnover structure.
- The focus of the organization is on quick money , and the product (if it exists) is needed only as a cover for the activity of the pyramid.
If you notice at least one of them in the company where you are invited, you should thoroughly study it for fraud and the legality of doing business.
Question 5. How to choose the right company to start in the MLM business?
To do this, pay attention to the following criteria:
- Lifespan on the market. Do not cooperate with companies that are less than 5 years old on the market.
- Demand for products. If these products are really in demand and have regular consumption, that is, they are often consumed. For example, cosmetic and household products, food.
- The site of the company. How convenient, functional and presentable it is.
- Training and support. Is there any, how professionally the mentoring system is built and whether you like it.
- Marketing plan. Is it fair and what type does it belong to:
- Stepped with branch.
- Matrix.
- Linear (single-level).
- Binary.
It is best if this is a stepwise marketing plan with a branch. Such an MP is used by most reliable companies, such as Oriflame.
Why did I choose the cautionary title for the article? Because, unfortunately, recently I have come across deplorable stories of people working in network companies and having the same deplorable results of this very “work”.
Network marketing (or multilevel marketing; English multilevel marketing, MLM) is the concept of selling goods and services based on creating a network of independent distributors (sales agents), each of which, in addition to selling products, also has the right to attract partners with similar rights . At the same time, the income of each network member consists of commissions for the sale of products and additional remuneration (bonuses) depending on the volume of sales made by the marketing agents involved.
Network marketing originated in the 1940s. The dawn of the network companies industry came in the 80s and 90s. One of the pioneers of the industry was the notorious American Way Corporation (Amway).
Myth #1. Network marketing is my business.
Do you seriously think that this business is yours? What if you think well? Thought? Not! Network marketing in 99.999% of cases is not your business. Network marketing is only a business for the (very smart and enterprising) people who started it. Dot. This is the business of those people who speak to you at the company's seminars once a year and deliver motivating and "grand" speeches from the stage.
What is the problem here? And the problem is that those newcomers who come to the network company from the very beginning are “explained” that he will be engaged in BUSINESS. Yes it is. But not all newcomers clearly understand whose business they will be engaged in. Understand that a business is only yours if you have the authority to make key decisions about running it. Can you make such decisions in "your" network company? Can you change the price of products? Can you change the assortment and suppliers? No. You are only RESELLING the products yourself or through the attracted new sales agents. You are forced to obey and comply with all the conditions and rules of doing business, which are dictated to you by its founders. Even if you have registered a business or a company and sell the products of "your" network company, you have very limited freedom of action, unlike a full-fledged entrepreneur.
Understand that if you work for a network company, then this is NOT your business. In this case, your activity can only be called an alternative to working “for an uncle” and self-employment, but by no means a full-fledged business, in the true economic sense of the word.
Myth #2. There is a lot of money in network marketing and you can get rich quick there.
Of course, the best option is, of course, to try and see the result. But, as long-term practice shows, there is NO big money in network marketing. Sometimes there is no money at all, let alone a lot. How so, after all, network companies make billions in profits? Yes, they do. The founders and those who head these companies and are personally close to the management receive. Ordinary mortal distributors are content with small checks to barely make ends meet. You can object, they say, you can become a leader! You're right. You can also fly into space. The whole question is who will not "vomit" on the way to this space, who will not lose consciousness and how long to fly to this "space". And in general, do you need this space?
All that an employee of a network company does is to search for those who would sell more and those who would sell more and who would be looking for the same thing.
Network marketing people (forgive me) are just middlemen. Just INTERMEDIATES. Of course, intermediaries can sometimes make good money, but the main profit is received by the owner.
There is no big money for an ordinary distributor in network marketing, they simply do not exist there. All the golden mountains that your "mentors" and leaders draw for you are a farce and pure motivation with profanity. Getting rich in network marketing is very difficult. I won’t say that no one has made a fortune selling detergents, toothpastes or super horseradish cutters, but the pictures that you are drawn are radically and dramatically different from the harsh reality.
Think of network marketing as an alternative to a regular job (and then carefully), as an additional source of income, but not as an easy and short path to wealth. I repeat, of course, there are people who, being distributors, have become leaders and made a fortune for themselves. But these are tough, unceremonious people with pronounced leadership qualities, these are people who have gone through fire, water and copper pipes in this business, putting a good part of their lives on it. Such "lucky ones" are one in a million distributors. Do you want to try your luck? That's your business.
Myth #3. My mentor is my friend, he will help me in everything, teach me everything and explain everything.
Hell no! Someone who is your mentor is definitely not your friend. Friends do not strain each other from month to month, constantly reminding that it would be necessary to qualify this month and buy three and a half more super horseradish cutters for the future, they say, they may be needed. Friends do not receive material benefits from friends, at least good and true ones.
Your mentor is the one who is most interested in your success, eloquent people told you in seminars and meetings, he will teach and guide you. So it is, but what is the problem in this situation? And the problem is that the wards begin, under the yoke of their “beloved” mentor (who, by the way, should have been sent to a dense forest for a long time) to do things that contradict the actions of a person in a bright mind and good health. Such wards begin to take loans, get into hopeless and hopeless debts, begin to make decisions that are not their own and not their own brain. This often leads to very unpleasant consequences that have to be sorted out by the wards themselves, already without the “help” of mentors and leaders.
In general, in our life we are under the constant influence of other people, whether we like it or not, and very often there is no awareness in our actions and decisions. In network marketing, dependent distributors, listening to the motivation of a mentor and looking at his painted pictures of mountains of gold, lead their lives downhill (in a very bad case) without knowing it. This is sad.
Your mentor can be a good person and he can really be your friend, but this is in very rare exceptions and only if he is not very interested in your results in the network company, respectively, as well as his own. Understand that the boss will never have a true and sincere friendship with his subordinates - this is nonsense and it is contrary to business.
Mentors, seminars, educational and entertainment collective events in network marketing - their actions are mostly aimed at brainwashing, retaining distributors in the company and increasing the company's profits. They wanted to spit on you, on your life and on your problems. Remember this. The first leaders of the company will never share with you the intimate knowledge they have, 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 unleashing your potential.
Let's sum up.
Of course, there are many positive aspects in network marketing. Working in network companies, a person learns a lot, goes through an excellent school of sales techniques and learns a lot of interesting things. In the process of work, he can radically (perhaps for the better) change his lifestyle, he can start traveling if he has not traveled before, communicate with interesting and successful people, he can open himself from a new perspective, and so on. There are definitely advantages. But there is no need to rely on MLM companies as if this is the only occupation worthy of you, that this is a gold mine and some unknown Klondike.
I repeat, you can consider working in a network company as a means and starting point for revealing your potential, as a school of sales, a school of communication and interaction with people. But those myths that you read above should not be forgotten. As one 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, working as a distributor, but the happiness that you are told about at the first and subsequent presentations is definitely not there.
We often take wishful thinking. You need to look at the results and draw conclusions. You need to use such a precious tool of yours as thinking. Use it! Think with your head. Trust the facts and results, not the words and pictures of your mentors and leaders. If nothing has changed for you for several (or even decades) years, then it is not prudent to believe that doing the same thing further (for example, plowing in a network company) something will change for you and you will start rowing money with a shovel. Don't start.
P.S. Who am I to talk like this about working in network companies?
I am directly related to work in network companies. I had the good fortune to work as a distributor of Chinese goods, and in a not very simple way - with a bag at the ready, wandering around the organizations. Handled cold sales. I consider it the most aggressive and difficult form of network marketing. I had a sales system, as in all similar companies, I had a mentor (and not one), there was a bunch of “washes” of my then still virgin brain, and so on. I went through it all and realized (pretty early, thankfully) that this was NOT my business, that the mentors were NOT friends, and that things were NOT as sweet as they told me. Plus, I have many friends and relatives who are involved in network marketing in one way or another (some for more than 10 years). So I more than know what I'm talking about.
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Translated from English, MLM (Multi-Level Marketing, MLM) is multi-level (network) marketing, the so-called Multi-Channel Marketing Systems. This concept implies the creation of a multi-level organization in which direct contact is used to promote goods (services) directly from the manufacturer to the final consumer. Each level of the organization receives a certain income - a commission.
Most often, MLM companies do not have their own stores. The goods are promoted exclusively through distributors, "from hand to hand". In fact, a person becomes a consultant of the company, advertising it to his acquaintances, relatives, friends, even strangers. The distributor receives as payment for his labor the difference between the wholesale purchase price and the retail sale price and, as mentioned earlier, some commission. For successful business development, it is important that the distributor himself likes the promoted product. It is difficult to sell something of poor quality, especially to find regular customers in these conditions. The maximum that you can count on is one-time transactions. But if the distributor successfully uses the goods that he promotes, he will be able to show by personal example how high-quality, convenient, functional, useful, etc. the products are.
- promotion of goods, services;
- dissemination of information about the business, its opportunities and prospects;
- attracting people to your structure (learning the art of disseminating information).
