Network marketing - what is it, history, examples, companies. Is it easy to make money in network marketing, and what is needed for this - experienced reviews Pros of working in network marketing

You can argue endlessly. Some call it fraud and pyramid schemes. Someone gave up, just crossed the threshold, and someone is already moving up the ladder of success, having an obscenely high income.

Everything is known in comparison, so let's not argue about this, but just look at network marketing: the pros and cons of this niche from the objective side.

Usually they start with the bad, in order to brighten up the negative later, but I, perhaps, still start with the positive points. And so, let's get started.

In my opinion, the main and simply obvious plus of MLM is residual income. You know that there is a goal, having reached which, you will be able to receive residual, in other words, passive income, not managing the process, but doing what you love.

And what could be better than having everything you need, and at the same time having the most valuable resource - time?

1. Favorable access to products.

As an MLM partner, you instantly become a consumer of high quality and unique products. And most importantly - you get the opportunity to purchase it at a good discount.

In my practice, I have often come across people who register in the partner database in order to purchase products at competitive prices, and not to conduct business.

2. Easy start.

To infiltrate the team and start developing the business, you do not need any initial investment other than the purchase of products.

Again, a very profitable plus in comparison with the classical construction of a business, where the initial investments are quite large amounts.

Also, MLM companies do not put forward any strict conditions and restrictions on the selection of their team, you do not need to have sales experience or marketing education to get started right now.

3. Free schedule.

Who likes to get up early in the morning, hastily drinking his cold coffee to get to the office at the far end of the city and be at the planning meeting at 8 sharp without getting a fine?

Yes, you are right - no one)))

Being a member of network marketing means doing business development at any time convenient for you. No framework, and clear hours of work.

You can meet your clients and replenish your team late in the evening at a party, visiting or standing in line at the bank. I'm not talking about the internet anymore. Yes, this is the very work that can be productive and bear fruit even on vacation.

By the way, here is one of my tools for partners, so that they can on one's own and successfully build your structure - 7 free video.

4. Training.

MLM organizations improve the skills of their partners. Trainings, master classes, webinars and other training programs are regularly held.

It is always interesting and informative. Such experience helps not only to navigate in a new area and successfully advance in it, but to master a powerful marketing tool that will come in handy more than once even outside of MLM.

But millions of people pay to attend such events or take business courses.

5. Work via the Internet.

All the same, it is worth mentioning this, because. Already more than 90% of networkers conduct their activities exclusively online.

If earlier it was possible to search and attract customers in network marketing only through live sales, today a big plus is the ability to expand your team and find buyers through the Internet and social networks.

Using such a resource, you can actively work while sitting on the couch and sipping the smoke of a hookah.

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6. Support.

And there can be no question of support and assistance in building a classic business model. Every man for himself.

And if you stumble, start all over again, clearing the rubble of your mistakes. But with network marketing, everything is different, and training is one of the proofs of this.

Employers set strict limits for the selection of their subordinates, give a trial period and maximum assistance in this case - this is a week-long internship under the guidance of one of the dissatisfied employees. I didn’t pass it - to the exit, because there are plenty of people who want this vacancy.

While representatives of network marketing do not require the impossible from beginners, they do not put forward conditions and requirements, they teach, give professional recommendations and tools for solving problems.

In this case, one should not be afraid of reprimands of fines, deprivation of bonuses and dismissal, and, in my opinion, this is a very significant plus.

7. Unlimited income.

If when you come to work, you often hear the amount of the dry rate, then in this case, your earnings can be unlimited. It all depends on your perseverance and determination.

8. Passive income.

Once you have structured and assembled your team, you can start earning good income without any effort. This is what I talked about at the very beginning - the residual income that every networker strives for.

9. Additional rewards.

As an encouragement and a good incentive for the team, network marketing representatives use bonuses, as well as prizes and even travel. What I have not seen in any classic business, and it seems to me that I will not meet.

Cons of MLM

1. Fraudsters.

Yes, sadly, but the popularity of MLM organizations has provoked the emergence of fraudulent companies that want to get rich on ignorant newcomers.

However, such a failure is easy to avoid by cooperating only with large and well-known companies with.

2. The cost of the product.

Companies that produce truly unique and high-quality high-class products. Sometimes the price for it may exceed market analogues of lower quality.

Buying a product is not difficult, because partners, as I have already said, receive a privilege in the form of a good discount, but the terms of sale become more complicated, due to the fact that our people love to eat fish and not go into the pond.

However, having learned the art of marketing, it is not difficult to convince the buyer of its benefits, especially by attaching him to the team, he will be able to buy the product at the same favorable price.

3. Refusals.

Nobody likes to get rejected, and in this case it is inevitable, because it is an integral part of the experience.

It is the failures that help to identify your mistakes, work on correcting them and gain indispensable experience for successful advancement in the future.

In addition, for this, there are a lot of trainings and webinars that teach the art of selling and working with objections.

4. Team turnover.

Not everyone stays in the team and persistently develops their business. Many light up, and subsequently go out and leave, which is reflected in other networkers.

That is why it is very important to support those whom you bring to the team and monitor their success until they are convinced in practice that such earnings are worth the time and effort spent.

5. Not guaranteed earnings.

If you expect that by becoming a partner of a network company and making a start-up purchase you will start earning untold wealth, you will get a cruel bummer.

Such dreamers leave the network with a negative impression of the entire company, spreading rumors that MLM is a scam.

You need to be willing to work hard and spend your time, especially at the beginning, in order to expand the team and receive passive income in the future.

6. Lack of formal employment

Many consider the position of a networker, to put it mildly, not prestigious. But it is, first of all, a business. To achieve results in order to drive a cool car past those who considered working in MLM as not worthy of their attention is, I think, a worthy incentive.

As such, there really is no official employment in MLM companies. At least in all known to me.

But, in order to receive remuneration, as a rule, it is required to conclude an agreement and issue an IP. Payments are made to the current account of the entrepreneur, who independently calculates and pays taxes.

Thus, the issue of official employment, social insurance and pension savings has been resolved.

That's actually all I wanted to say. You just have to weigh the pros and cons, prioritize and draw your own conclusions.

In general, if you don’t try, you won’t know, as they say.

I wish you success, subscribe to my updates, share links with friends and find useful information for yourself. Subscribe also to the Telegram channel - t.me/site. See you later!

The number of distribution companies specializing in MLM is increasing every year. This is due to the fact that this business is profitable and quickly generates income. They are easy to do without even leaving the house. If you study in detail the basics and concept of MLM marketing, you can achieve excellent results in 2-3 months.

What is network marketing

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

History of network marketing

Carl Rehnborg is considered the founder of the MLM business. He developed ideas that later turned into an entire industry with huge multi-million dollar turnovers. In 1927 in the USA, Rehnborg began to work hard on the creation of nutritional supplements. For testing purposes, he distributed the developed drugs for free to his friends, who subsequently refused to take them.

After Carl realized that the free is not appreciated, he began to sell supplements: the results were not long in coming. Information about drugs quickly spread, and the number of people interested in them increased. Karl Rehnborg could not satisfy the needs of all customers on his own, so he had to come up with a new scheme. He invited his acquaintances to provide information about bioadditives, and, subject to successful sales, promised to pay commissions. From these events began the history of network marketing.

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

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

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

Types of network marketing

MLM business is developing at a fast pace, its varieties are increasing every year. The main types of network marketing are as follows:

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

How Network Marketing Works

The principle of operation of Russian MLM companies is the same:

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

The essence of network marketing

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

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

Network Marketing Principles

MLM business is based on the following rules:

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

Network Marketing Structure

Running through the MLM business and not noticing the main thing, many do not achieve the desired results. Why? Because they do not know how to properly build the structure of network marketing. What is a structure? These are people who take part in the organization of trade, and the final income directly depends on their number. It can include acquaintances, friends, complete strangers. The main task is to skillfully unite them and constantly motivate them for successful promotion.

Network companies

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

• Life;
• Oriflame,
• "Siberian health";
• Faberlic;
• Avon;
• Primerica;
• Shaklee;
• Talk Fusion;
• Neways;
• Vitamax;
• Zepter International;
• Kirby;
• Atistek;
• Lurk;
• True.

Work in network marketing

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

Network business on the Internet

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

• the ability to conduct business from anywhere in the world;
• the possibility of attracting potential partners from any regions, cities and countries;
• a lot of information programs that provide prompt assistance in solving organizational issues, conducting education and training;
• the possibility of selling through online stores with an integrated order basket;
• possibility of learning online.

How to make money in network marketing

To be successful in this business, you need to follow a few simple rules:

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

Cons of network marketing

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

• unstable income;
• great moral burden, constant pressure from customers;
• the need for material investments;
• a high level of responsibility for the people involved.

Network Marketing Benefits

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

Video: how network business works

Surely the vast majority of us have an idea of ​​what MLM business is or, as it is commonly called, network marketing. So much false data and opinions of people who have absolutely nothing to do with it have been piled up around this concept that we decided to clarify this issue, because. network marketing is a relatively new phenomenon (especially for Russia), with incredible speed, has already managed to win its rather impressive segment in the business market.
Here we will consider all the advantages and disadvantages of this type of private business, as well as what prevents it from developing at a faster pace, although it is already many times greater in its growth dynamics than the growth of other classical models of our business.

1. This is an opportunity to combine work on creating your own network without leaving your main place of work. It is difficult for a person to immediately abandon the main source of income, but, as it turned out, there is no need for this. Most of the network millionaires before the start of "independent swimming" had a main place of work and parted with it already when the level of income of their business exceeded the salary level at the main place.

2. Network business is a very high level of freedom. Moreover, freedom in everything: in the choice of work schedule, in the choice of business partners, in the choice of distributed products or services, in the choice of methods for promoting the product ... I cannot list everything. Network business is a perfect opportunity for revealing your business and creative potential. Perhaps this is the biggest plus of this business, because the most important thing in our society is the person himself and the disclosure of all potential opportunities. Only with independent, self-sufficient, capable individuals can our society flourish, and it is network marketing that "makes" such individuals.

3. This is the unlimitedness of your income. That's where there is no "ceiling of earnings", so it is in the network business. Here only you can limit your income - no one else. Only you can limit the growth of your team and your personal growth.

4. The absence of "bosses" and, consequently, a directive method of leadership. Well, tell me, who among us has not suffered from the tyranny and arbitrariness of narrow-minded and self-satisfied individuals? There is no such. In the online business, things are different. Having harmed his partner, the networker limits himself in his growth. Here the success of everyone depends on the success of the whole team and the achievements of the whole team are directly reflected in everyone. Among other things, there is no linear model of subordination in the network business, and therefore, we repeat, there are no bosses and subordinates here, but just partners in a common business.

5. A very small amount of start-up capital to start your business is the fifth undoubted advantage of network marketing. According to the research of our statisticians, today it takes from 600,000 rubles ($20,000) to start a business, and whether it will then generate income is a big question. It takes between $20 and $50 (average) to get started in network marketing. For example, to start working with one of the world's largest network companies 4life Research, you will need only 750 rubles, and even then this money will "go" to complete your own information package in order to train you and familiarize yourself with the company's products.

6. You will not find another business that provides such a huge number of different connections. A huge number of people of various professions work in the network business, these are teachers, and builders, and doctors, and lawyers, and people of creative professions, and the military, and managers of various directions and levels - all those who want independence and financial freedom. And they are all on the same team. Would you like to work in such a team?

7. And the last. What are we all living for? For the sake of being happy, for our children, parents, relatives and friends to be happy. Man, by nature, should simply be happy. The realities of today are such that one of the components of our happiness is financial independence. We are not saying that money should become an end in itself for you, but a capable and happy person should be financially independent. What does network marketing give us in this matter? A few numbers:
- more than 50 people working in network companies around the world become dollar millionaires every day;
- Only in the USA today there are more than 400 thousand millionaires in the field of network marketing;
- the annual turnover of the network business in the world is increasing by 20-30% and today is more than 200 billion dollars.
- every day in the world more than 60,000 people become independent distributors;
- in Russia, about 2.7 million people are employed in the network business, and today our country ranks first in the world in terms of network sales growth - 540% per year (!).

How to distinguish a network company

Many companies that are now appearing on the market position themselves as MLM companies (Multi-Level Marketing). You need to know that any company providing services is not a network company. The network company provides a physical product, the sale is person-to-person, it does not have retail space.

Is Network Marketing Worth It?

The article is based on real stories of network marketing consultants. It expresses the opinions of several cosmetic sellers, from different marketing companies that have developed over a long period.

Hello dear readers! I want to tell you that, like many others, I also take eau de toilette, shampoos, shaving and aftershave products, and much more from consultants from various marketing companies. At the same time, I talked a lot with them, about whether such an occupation is profitable or not.

They told me that every person, throughout his life, strives to achieve financial success. Most get a job and work for a salary, while, if there is a chance, they do not refuse additional earnings. My interlocutors chose network marketing selling cosmetics as an additional income, explaining their choice by the fact that:

1. At any enterprise, cosmetics are used by everyone without exception! Both women and men! With the right approach, it is quite possible to find yourself regular customers.
2. Word of mouth will quickly spread the word about you, and you will have individual buyers outside of your organization.

Network marketing is the same job in which you need to take a course in addition to sales. With a skillful approach, network marketing can bring additional income and increase the family budget well, the main thing is to delve into the very essence of such work, while not being afraid to get down to business.

Before you start active sales, you need to understand that selling cosmetics is not just a job, but in fact is a hard and responsible job. The difficulty of such work lies in the fact that you need to constantly monitor the news and updates of the catalogs of the selected products. Tell your customers about them.

The responsibility lies in the fact that each customer is special and each needs an individual approach. For example, you need to know which cream and which type of skin is best suited, and there are many more similar nuances that my interlocutors told me about.

They believe that their occupation can also be called the sale of cosmetics at home, since people come home to buy cosmetics. A big plus in this is that, without looking up from everyday affairs, you get additional income and spend time in communication.

However, you should not take the network business as your own business. If you leave the company, then the business will not suffer from your absence, because it has its own owner and its own structure, independent of you. This business is more like a hired job where you work for the result.

Also, do not count on passive income from such a business. The owner is interested in you working constantly. You will have to invest a lot of time in finding regular customers, recruiting your team, etc. Unlike freelancers, you won't meet networkers on long journeys. Also, your work is very dependent on which leader you get, what he can teach you and whether he will provide real help and support.

In addition, you have to be very sociable, because you have to talk a lot. Add to this an excellent product knowledge as well. only competent advice contributes to the return of the buyer.

Don't forget to treat people with respect. Buyers are different, some are very meticulous, and before buying they try to find out as much information about the product as possible. Therefore, you need to be patient and kindly explain everything and, of course, be well versed not only in products, but also in promotions and discounts of the company.

That's what all those women beauty sales consultants from different marketing companies told me who have been distributing cosmetics for several years and are not thinking of quitting.

What else is important to know

They will tell you that you don’t need to do anything, you don’t need any investments, you don’t need to work. Beautiful stories will be told that someone earns millions in the company and constantly travels. The truth is that in order to get any money, you need to do a lot of turnover, you need to work even more than in a normal job, and there is no guarantee that your team will not fall apart and you will earn at least something.

Pros and Cons of Network Marketing

Network Marketing: Pros

The upside is that network marketing is the best sales school.

Here you will learn:

• sell;
• negotiate;
• organize events and events;
• build relationships with people;
• painlessly hearing the word “no” to your sentences;
• work in a team.

You can also add a free schedule and constant access to your favorite products to the pluses.

Cons of network marketing

• it is not your own business;
• in real life, you should not count on passive income;
• team turnover;
• there is no official employment and social package;
• no guaranteed income;
• takes a lot of time and effort;
• Often, spam is used to attract customers and recruit teams, which causes irritation and negativity.

See a real review of a person, is it worth doing network marketing:

Network, or multi-level, marketing as a type of business is developing quite actively. Indeed, for the implementation of such activities, a store is not needed, and goods are sold with the help of agents who are engaged in retail sales of products. Despite its novelty for Russia, this form of doing business has both its advantages and disadvantages. In our article, we will talk about what pros and cons are known, and we will analyze each of them in detail.

Advantages

Let's start with the positives. So, the advantages of MLM business are as follows:

1. There are no restrictions on the possibility of making a profit. Earnings in multi-level marketing completely depend on the activity and desire of the agent. The more he attracts new members and customers and makes more sales, the higher his income. But the usual salary always has some kind of restrictive framework. The most important thing is to be able to pick up a worthy team that will move this business forward.
2. Gaining financial freedom. Those who are engaged in MLM are not dependent on the employer. A person is his own master and decides what pace of work to choose and what strategy to use. At the same time, a person is not left to himself, he has a mentor with whom you can consult and from whom you can learn useful knowledge.
3. Personal business. Many people are attracted to the idea of ​​starting their own business, but lack of money and fear of failure prevent this. In network marketing, this is easier. Firstly, no material resources are required to start, and secondly, the risk of failure is minimal, because a whole team is working, whose members are ready to lend a shoulder. If the outcome is unsuccessful, everything costs only a waste of time.
4. Friendly team. In this activity, team building is given serious attention, because the overall income depends on the creation of the team. Therefore, trainings are often held, aimed not only at training the team, but also at developing the team spirit, and this helps in the work.
5. Obtaining passive income. Network marketing over time provides an opportunity for passive income. But first, you need to work hard to create a developed distribution network. And after that, you can safely move away from business and receive well-deserved dividends.

Network marketing over time provides an opportunity for passive income.

Negative sides

Despite the many positive characteristics, this type of business is not complete without. The main disadvantages are:

1. Earnings are unstable. In the beginning, entering into such a business, a person will receive very little, although distributors promise an increase in income over time. At first, such activity is more like a small part-time job. But if a person manages to hold on, then he will be able to develop further and receive more. Communicative people with leadership abilities usually succeed, because they are the ones who find new customers the fastest.
2. Nervous tension. It's not easy to work with people, offering them your products and regularly hearing rejections. Only a stress-resistant person can handle this. In addition, beginners undergo difficult training.
3. Responsibility for other people. Multi-level marketing assumes that the participant must take assistants and organize their training. And after all training always assumes moral responsibility for results and experiences.
4. The need to buy the company's products. Often, the network company sets conditions for the participants, according to which they must buy its goods from time to time at their own expense. Such expenses can sometimes even outweigh the income, especially at the initial stage.
5. Bad attitude from society. Many consider network marketing a scam and a scam, so they don't want to have anything to do with it. It can be quite difficult for participants to find new customers and persuade them to take advantage of their offer. Therefore, at first, clients are usually found among relatives and acquaintances, because it’s easier that way.
6. Registration as an entrepreneur. Now some prefer to work in the "shadow" in order not to pay taxes and not make mandatory contributions to funds. But most of the large network companies operate legally.
7. High level of competition. There are already many distributors working in the network business, so finding customers is becoming more and more difficult.

In conclusion

We add that this form of doing business is not suitable for everyone. It requires a person to display organizational qualities and certain communication skills. You need to be a good psychologist, because you constantly have to work with living people.