What is network marketing: advantages and disadvantages. What are MLM business projects and how to distinguish them from a financial pyramid

12.10.2019

Dear friend, I greet you. In touch, Rinat Admiralov, an entrepreneur and expert in the field of network marketing with 8 years of “working” experience in this industry. During this time, I earned good money from MLM, bought a foreign car and seven apartments.

I came to develop my business in Stavropol from St. Petersburg. In life I enjoy playing guitar, reading books, personal development, social activities, likes to lead a healthy lifestyle.

The MLM industry has long been the subject of a lot of controversy and controversy. I myself had a negative idea about this activity until I understood this issue in detail. How many people, so many opinions. Some people consider this direction illegal and “equate” it to a financial pyramid, while others believe that this is a brilliant invention of mankind.

I will share with you my economic views and critical thinking on this issue and practical experience, I hope to be useful.

Let’s look at what multi-level marketing is, whether it’s worth doing and how much you can earn.

Entrepreneur and expert in the MLM industry Rinat Admiralov shared information about network business on the pages of the online business magazine “PAPA HELPED”

What is network marketing (MLM) and how does it differ from “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 (company partners) receive a percentage of the turnover of the clients they attract.

This line of business was initially based on the idea of recommendations. 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) to someone: a lawyer, a dentist, shampoo, travel agency, restaurant or movie.

But here’s the problem: no one pays us money for this, even if, thanks to our recommendation, a deal was completed and someone made good money on it.

So, the idea of building a network marketing business is recommendations.

Everyone approaches MLM differently and that’s normal.

For me MLM is micro a franchise that has a number of advantages over “regular” franchising.

Franchise in business- this is the right to work under the brand of a well-known company, using its image, technology and products.

However, you will have to pay well for such “patronage” of a large partner.

The first thing you will have to spend money on when starting to work in a “classic” franchise is: lump sum . This is a one-time payment for using the brand of a partner company, its developments and products.

Second - royalties. This is a certain percentage of turnover that you would pay to the company that granted you the right to work with it under a franchising scheme. However, most well-known companies have a size lump sum measured hundreds of thousands and even millions of rubles.

What does this mean for you as an aspiring entrepreneur looking to launch a “risk-free” business?

Which means only one thing: you must have a solid start-up capital to work under a well-known brand. As soon as you start receiving your first income (not even profit), be kind enough to give another percentage of the money received (royalties).

As you can see, the classic franchising scheme is suitable either for experienced entrepreneurs or people with substantial initial capital.

Of course, there are franchises on the market with very favorable conditions. Therefore, when choosing a franchise partner, it is very important to study the parent company - how they make money. There are often unscrupulous sellers whose main income comes from the sales of the franchises themselves.

Here's a life hack for you. The first criterion that you should pay attention to before delving into the study of the offer is how much the company has their points in the general network.

If it’s less than 50%, then it’s worth thinking about, because if you successfully build a business, the income is constantly reinvested and develops your network.

If this topic is interesting, I will write more detailed review- as without economic education and business experience to quickly identify worthy offers on the market that are worth considering in more depth. Let me know about it in the comments to the article.

Why for me network marketing This is exactly a “micro” franchise. Because its advantages as a classic franchise remain, but many of its disadvantages “disappear.”

In the table below I compared the conditions of a “classic” franchise and network marketing:

Comparison criterion	The franchise is classic	Network Marketing (microfranchise)
The right to work 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 supplies)
Payment of lump sum fee	Yes (almost always)	No
Royalty payment	Yes (almost always)	No
Financial risks	Essential	Minor
Growth potential	High	High
Geographic mobility	Low (most businesses are tied to material point sales)	High (business can be done in any city and via the Internet)

Network marketing can be thought of as symbiosis of a major player in the small business market.

Where the investor partner (network company) took on all operational activities and financial risks, and the small business partner (distributor) can only work on creating a customer base.

In any business, it is necessary to create a client base, but all the risks and the “OS” that everyone dreams of getting rid of remain. A microfranchise solves this problem in favor of small businesses.

It is very difficult for a small business to compete with a large one, but becoming a partner of a large player in the market is already interesting.

Classic promotion, as a rule, involves promoting goods in various ways, including through intermediaries using advertising in the media and the Internet.

For a beginning entrepreneur, such a promotion strategy is more expensive, which is why there are higher financial risks.

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 the consumer and distributor

Consumer- this 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 directly to the company, which sends the goods to delivery points, bypassing intermediaries. The probability of counterfeiting in this case tends to zero, in contrast to usual retail (where the share of counterfeits and forgeries can reach up to 90%).
Personal consultant. The income of a network company consultant directly depends on his turnover. Trade turnover depends on regular and satisfied customers. Therefore, the consultant’s task is to be client-oriented and not just sell a product, but to provide a solution for his clients, giving great value than the buyer paid. In most large MLM companies, consultants are competent people with active life position and a high level of responsibility.
Free shipping. Whatever country or city you order the goods in, if there is an official distribution point of the network company, delivery for you will be free or minimal.
100% product return. Today, competition in all segments of standard goods is very serious and any manufacturer strives to win the fight for the consumer. Large companies, and not only chain ones, offer a guarantee on the return of the product in case of dissatisfaction with its quality, configuration, 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 to “get a job” in network marketing, from time to time there are non-professionals who spoil the reputation of the entire 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 (+):

Accompanying the mentor to the result. You and your mentor are in the same boat, and this is where joint action comes into play. work activity, where the mentor has a financial interest in teaching you. His task is to transfer all his skills and knowledge, and yours is to accept them and put them into practice yourself, so he cannot do it for you. This way you get a player-coach as a mentor. There is such a concept in football. He is a practical mentor with you on the field, who does and continues to do what you are about to do. By acting according to the mentor’s system, you achieve results together with him.
Creating a team of like-minded people. Constant growth and development, communication among “friends” helps to awaken the hidden talents and potential of future and existing “networkers”. Financial results as the main guideline in network marketing help each team member become more effective and financially literate. For example, my “colleagues” and I play the game from time to time Robert Kiyosaki "Cash Flow"(financial simulator real life), we go to nature together, play sports. Also, almost every network company regularly holds meetings with TOP leaders, famous people from different areas, sales and team building trainings.
Creating serious income from your business system. There is an opinion that network marketing is a part-time job, additional income or, in general, something that is impossible to make money on. 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 an increase to their pension or scholarship. People don’t even realize that there are dollar millionaires in this industry and these are not the owners of network marketing companies, but also 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 repeat customers. As you understand, with such a scale, the income of these people amounts to millions of rubles per month. They worked towards this for 8-10-15 years, and got such results.
Access to wholesale prices. A company's client, when purchasing a product from a distributor, overpays by an average of 25-30%. It is logical to assume that it is much more profitable to register as a VIP client of a company based on a recommendation, even if you do not plan to build a business, but simply take goods for your own consumption.
Opportunity to travel at the expense of the company, receive valuable bonuses and gifts. Partner motivation is important for a network company. Therefore, the company gives tourist vouchers as bonuses to especially productive partners, allows them to buy a car on preferential terms, or even gives them for free when the distributor reaches a certain level.

Paris. I'm going to the famous Disneyland

Disadvantages for the distributor (-):

Illiterate business development leads to misunderstanding of others. Surely each of you at least once in your life has encountered inadequate or overly intrusive “networkers”. They are obsessed with the idea of becoming millionaires, proving to everyone that network marketing is the only way to start your own successful business, especially if you don’t have starting capital. If you are skeptical about their ideas, then you immediately become an object of ridicule and condemnation from the “gurus” of the MLM business. Most often, this problem arises among beginners and those who do not deeply understand the essence of their business. As a result, very diverse ideas are created due to non-professionals. However, for MLM business pros this is not a hindrance, but even a plus, since when they get to a mentor, people have something to compare with.

How to make money in network marketing - I share my own 8 years of business experience in MLM

Many of you have heard that there are royalties for musical and literary works. That is, once you write a book, for each copy you sell, you will receive a portion of its cost as royalties. The same thing is when you rent or perform your song, you will receive money.

It's called residual income, when for once you invest intellectual work you can receive money for life.

Unlike the residual passive income received for the money once invested.

I was very inspired by the idea of earning residual income and began to look for ways to earn it without having the talent of a writer or musician.

Network marketing allows you to create that same 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 income. That is, by building a sales system for the company’s products, you create a “marketing machine” that operates 24 hours a day, 7 days a week. The company provides you with all statistics and reporting and pays a percentage of remuneration for actual purchases according to the marketing plan.

Everything is great with royalties, and to some extent the process of making a profit is similar in both. For once invested work you get money. However, the trick is that a book written once generates income only from itself.

Now just imagine: the book you wrote writes a new book, and you are paid your royalties for this new book, written by your book.

If you let this idea pass through you, you will not be able to sleep peacefully for the first time until you begin to implement it.

This is the teachers' business. Here the skill of learning to learn is valued and rewarded. In other words, this principle is called “trainer of trainers.”

A trained student teaches other students. He writes his book and creates his own copyright. And you are paid your new royalty for previously completed work on teaching and teaching.

This is a reality in network marketing. 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 the company with which I cooperate, the marketing plan involves payments from 6 levels “in depth”.

After developing my structure for five and a half years, I decided to check what residual income is. Will I be paid for the work I once did if I go on vacation for an indefinite period? I didn’t know then that my vacation would last two and a half years.

The first year I started living in light mode, in the second year I moved to Moscow from Stavropol and devoted this time to learning about different areas: scientific, educational, social, cultural and entertainment.

I attended lectures on neurosurgery, bordering on nanotechnology, by the best professors in our country and the world, and met leading scientists from the Institute of Nutrition of the Russian Academy of Medical Sciences. During this time there was a lot more interesting things. I simply lived and developed myself without 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 truly realized the beauty of my residual income.

He kept coming and helped me invest many months into developing my personality. Thanks to this, new horizons opened up for me.

The cool thing is that this business not only provides the opportunity to earn 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 engaging in this activity.

When I first started, I learned every last detail from my mentors, asked thousands of questions, and was very corrosive and meticulous.

Fortunately, my mentors turned out to be real professionals and carefully answered all my questions.

In the end, I realized that THREE factors are important for success in network marketing:

Demand for the product. The product that the company sells must be clear and non-specific. They are also called consumer goods (wide demand).
Repeated customer requests. Regularity of sales is very important factor. For example, people buy a car once every few years, but 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 operating in the market for a long time and pays commissions fairly and stably - best choice for those who want to build a career in the MLM industry.

Think in numbers, how much you need to train your partners and at what turnover, how much you will earn.

Based on this, it will be easy to determine your reference points, understand where you are now and where you will go in the future.

At the end of this point, I would like to wish you to find your own unique path and move along it, starting from your strengths. Take the best from your mentor and adapt it to suit yourself.

MLM business 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 simple steps. Just take it and implement it!

A good attitude is half the success in any endeavor!

Step 1. Set the right financial goal, limited in time

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 earn 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 place exactly 3 reference points?

Look, when you just start your “career” in network marketing, you earn nothing, but within a month or two your net profit will be 5,000-10,000 rubles with due effort.

Let's assume that you have made your first income and in order to move on without losing motivation, you need the next financial goal.

Persistent people make money here pretty quickly 30,000 - 50,000 rubles ($500) per month, but there is a great temptation to stop there 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 it is already enough money for most people to live comfortably. This is the number where most truly successful distributors get stuck.

When you have two more solid numbers ahead, you don’t focus so much on the already achieved financial goal (100,000 rubles).

Once you start earning 300,000 rubles per month, you shouldn’t relax either, because the treasured million is ahead. At this stage, you can put the next number in 1.5-2 million rubles per month.

That is, your financial goal must 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 it!

Nowadays there are a lot 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 an advisor. The advisor thinks that this is how it should be, the mentor did what you are just about to do.

Don’t take his word for it, ask your potential mentor to show his results in generating income in this particular area of activity 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 evidence of high income in MLM, since they could have been acquired through other sources of income.

Step 3: Get your focal points right

What you focus on is what you get the fastest.

You must have THREE focal points:

Point 1. Network. It should be based on a technology according to which you answer 5 questions to your future partner. Below I list them and briefly answer each.

What is the point of this business? The point of MLM business is to create group turnover and receive a percentage as a reward.
Where does the money come from? The money is already included in the price of the goods. Due to the fact that the developer, manufacturer, logistician and seller automatically reduce all costs for each stage separately. Thanks to this, the company has excess profits, which are used to develop product quality and expand the range. And for the buyer the maximum favorable price. This is also beneficial for the company’s partner, who receives his reward from the generated turnover.
What to do? Gather a team, teach them about personal consumption and forming their own teams. You become a mentor to your students and, if possible, develop leadership skills in them. This way 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 build a business. He is also called an information sponsor. He guides you on the right path, gives you working technology, and at first, under his leadership, you will hold meetings with potential partners of your structure.
What will happen as a result of the activity? If you do everything correctly and professionally, your material and other dreams will be realized. This will happen as a result of residual income. Sometimes it is called passive, but I separate these two concepts. Passive income (financial passive income) arises when initially invested big MONEY(bank deposit) or property (renting out an apartment). Residual income (marketing income) arises for once invested LABOR. Once you invite consumers to your structure (network), you will create a flow of regular customers and receive income from their turnover.

Point 2. System.

A system in a network business is constant and continuous action. It consists of three important components, I also call them “Tamara and I go as a couple”:

Invitation and meeting. Conducted using technology provided by the mentor. It is understood that you must have a unique selling business idea and a presentation that can be easily repeated (duplicated).
Personal consumption and trailer*. Personal consumption allows you to benefit from the product and the same purchase is included in your turnover. necessary to create trade turnover and personal awareness of the products offered. The trailer is 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 products 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. By educating yourself and raising your own level in different areas, you will have something to pass on to your team. I know from experience that people who have recently entered business leave it in the first days or weeks. This happens because they do not see their mentor’s real interest in them. Hold developmental meetings and business games with your team, organize an entrepreneurs’ club. In a word, you must show by example that you are a worthy leader whom you can and should follow.

If you liked your mentor's system, you can use 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.

The principle “One for all and all for one” also works well in MLM

The main rule here is that the result of everyone has a fruitful effect on the result of everyone.

At the first stage, invite everyone into the business, without dividing people into “promising” and “not so promising”. You don't know 100 percent who exactly you know will want to do business, so invite everyone.

I often hear from my guys in the process of compiling a list of potential partners something like the following: “I have a friend Vasya, he is an entrepreneur, a serious person, he will definitely be interested” or “yes, this is the number of the guy Petya who assembled my furniture, he is a “mug” , it definitely doesn’t make sense to invite him to a meeting.”

In the end, everything ends completely differently than expected.

A serious entrepreneur, Vasya is so passionate about his business that he is not interested in pursuing other areas. On the contrary, Petya, a furniture assembler, arrived a month ago from another city, he has great ambitions to build his own business and he will dig his nose into the ground to achieve results in network marketing.

It happens in different ways, and only in actions will you see who will become your business partner.

Step 4: Have a lot of meetings with potential partners

Building a team through meetings is a key point in developing a network business. You should have a sales presentation in your hands, rehearsed many times and understandable to you and others.

This is the business of statistics, the only people who fail here are those who haven’t done it a certain number of actions. You will gain invaluable experience by conducting many meetings. I wrote earlier that it is important to conduct meetings using technology.

If you do everything correctly, then within a few days you will form your first line in the organization, that is, you will recruit an average of 5-7 partners into the structure.

By teaching them to do the same, you will launch a mechanism for independently scaling your structure.

Step 5. Expand your circle of acquaintances (effective networking)

Develop yourself, 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 way you will quickly become a versatile person and a pleasant conversationalist. Building a business will become not a job for you, but a “lifestyle”.

The broader your horizons, the more people from different fields you will have in your structure and simply as friends. It's nice and useful.

Be active in networking.

Networking is expanding your circle of acquaintances, the main goal of which is to build business communications with people from different fields.

Attend events for the purpose of making new acquaintances and self-development: trainings, seminars, sports and cultural events.

Passionate people are open to new opportunities and will probably be happy to meet you. Even if they don’t build a business with your company, at least half of them are your potential clients (product consumers).

List of network marketing companies in Russia - rating

There are dozens of network marketing companies operating in Russia in 2019.

Among them are several large players who share more than half of the market among themselves, the rest get only 20% for all.

Leading MLM companies in Russia:

	Amway company one of the oldest and most famous in the whole world. Founded in 1959 by Jay Van Andel and Rich DeVos in the USA. Sponsors sports teams in Russia and abroad. Actively distributes products of various brands through its consumer network.
	Oriflame company— The Swedish company is known both in Russia and throughout the world, operating in 60 countries. One of the pioneers of 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.
	Avon company founded in 1886, that is, the company is over 100 years old! In Russia, only a completely dense person has not heard of it. Almost every girl used her cosmetics or other products. The company positions its products as inexpensive and of fairly high quality.
	Faberlic company founded in 1997 in Russia. Her cosmetics are positioned as oxygen and especially beneficial for health. Several years ago, the company began producing shoes, clothing and accessories, thus expanding its product range.
	Mary Kay Company was created in America in 1963 and named after its founder Mary Kay Ash. It is one of the largest cosmetics companies in the world, one of the TOP MLM industry in terms of scale of activity and turnover.

Almost everyone knows these companies.

The following companies in this industry are also quite well known:

It works in the world 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.

Books on network marketing

Helpful saying:

Man with higher education differs from a person with secondary education only in that he has read 50 more books!

By the way, according to statistics, average specialists in their field read less than one book per year!

Below I attach a list of the TOP 50 books on network marketing, they can be downloaded in a 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 first and foremost a business, and like any entrepreneur, you must master the art of time management, be effective, and understand the economic and psychological aspects of creating your own business.

Frequently Asked Questions

I get asked these questions regularly, so I decided to answer them here in detail so that these answers will help you in the future.

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 have described the main ones below:

Publicity of the company. This means that its shares are listed on international exchanges and there are transparent financial statistics of activities available to everyone.
Company age. The longer a company exists, the better. The minimum period of existence of an organization on the market, which indirectly indicates its reliability, is 21 years.
Natural consumer product. Good mlm companies sell everyday goods: cosmetics, hygiene products, vitamins, household, beauty and health products.
Company turnover: from a billion dollars per year. Yes, this is serious money, but you yourself are looking for a serious partner for the long term, aren’t you?!
Own production and research centers. Logistics are an important part of a good network marketing company. Such a company “has something to brag about.” Its own production base and its own product developers indicate that the company has come to the market seriously 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 MP in total. All have their advantages, but also disadvantages. In my experience, the most worthy marketing plan is the “classic” one. When meeting 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, do they have the proper experience in the area of business they are involved in.

Question 2. Is network marketing a financial pyramid or are there differences? Marina, 26 years old, Izhevsk

Marina, there are differences. Network marketing has nothing in common with a financial pyramid. Many people, without understanding, really do not see the difference in these concepts.

If you are told that MLM is a pyramid, know that your interlocutor simply does not understand this business

In the table below I have outlined point by point what is the difference between network marketing and financial pyramid:

Network Marketing	Financial pyramid
Legal way to distribute products	A scheme for enriching the founders prohibited by law (in most countries, including Russia, criminal liability is provided for organizing financial pyramids)
There is a product in demand by the market	The product is absent or exists nominally to “cover” illegal activities
The profit of the company’s partners is formed thanks to the turnover of a quality product	The profit of the pyramid's investors depends on the monetary contributions of the participants invited by them
Business entry (registration) is free or symbolically low (a few dollars)	You can become a participant in a financial pyramid simply by investing money and receiving imaginary interest or fixed payments
There are payment and other official documents for conducting activities (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 deposit amount to its participants
Good network marketing companies have been around for decades and are thriving.	The lifespan of financial pyramids does not exceed several years (usually from 6 to 24 months)

How to make sure that the company you plan to cooperate with is not a financial pyramid:

The most reliable option is to check whether its shares are listed on world exchanges. This can be done through the “stocks” application on any smartphone. If a company's shares are publicly traded on stock exchanges, it is called "public."
Pay attention to the company's product. It must be massive and have real market value, and in the ordinary “market” this product must be comparable in price and quality. Pay attention to the quality standards used to manufacture the product.
In a financial pyramid, they offer interest on invested money, which is taken, naturally, 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 its size authorized capital. It is this that guarantees the return of funds to creditors and investors in the event of bankruptcy of a company. Now minimum size The authorized capital when creating 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 if the authorized capital of this company is 10,000 rubles. In case of bankruptcy of the company, according to the law, 10,000 “wooden” will have to be divided among all “victims”.
An indirect sign applicable to a superficial analysis is whether there is an economic justification for the company’s activities. If you are promised 200-300-600% per annum on your invested funds, run away from such would-be businessmen. Professional investors with big money consider it a great success to earn 25-30% per annum on their invested funds. And they certainly won’t invest a single ruble into a project that promises 10-20 times more. If you are at least a little familiar with economic theory, then you know that large businesses make money on volumes with low profitability and do not simply grow 10-20 times per year. And if you are told that this company is reliable and fast-growing, then often one contradicts the other. Read the books and watch an interview with the world's leading investor, Warren Buffett, and you will learn a lot about investing.

Question 3. Now many people are hearing about 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 I described in the answer to the previous question and you can draw your own conclusion.

Question 4. Jobs in network marketing: how to get it and how promising is it? Ivan, 24 years old, Odessa

Ivan, if you take a responsible approach to choosing 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, its promotion and everything organizational issues took over.

Let's assume that you have chosen the ideal networking company to cooperate with, and here lies a logical question: how seriously are you ready to act as a partner?

You are likely to make money and succeed in network marketing if you meet 3 important criteria:

Dissatisfied with the way you live now. And you can earn 30,000 rubles and be satisfied and can earn 300,000 rubles and be dissatisfied with the current situation. It's not just about the material aspect. They work “hungry” (for knowledge, for financial results, for social responsibility). Maybe you need more freedom or just want to expand your activity.
You yourself believe that you deserve a better life. This is your inner belief.
Ready to do something immediately. Only actions determine the result. There is a phrase: in order to have something that you didn’t have before, you must do something that you haven’t done before .

By developing your partners, you continue to develop yourself.

Question 5. How to pay taxes on profits in MLM and when should it be done? Olga, 32 years old, Samara

Olga, you can think about paying taxes when you already have stable turnover and you are going to withdraw money earned on your personal account.

To do this, you should open an individual entrepreneur with a simplified taxation system, where you will pay 6% from the profit received.

Don’t be intimidated by the fact that you are opening a “company”; this is a standard and very simple procedure. This has already been discussed in one of the previous articles on the site.

First, you can accumulate earned funds inside your company’s personal account and use them as payment for products in a certain percentage products.

However, opening an individual entrepreneur will entail the payment of mandatory pension contributions, which are of the order 30,000 rubles per year for individual entrepreneurs. Changes annually.

But there is good news here, our activities allow us to make a tax deduction for pension insurance contributions up to 100% (determined by law).

You can collect money on a personal number for a long period of time without withdrawing it, until you reach the income level of 100,000 rubles per month. But in this case, it is necessary to have a financial “cushion” to cover current expenses until the receipts from your business.

Question 6. How to attract people to network marketing if I am a beginner? Ruslan, 24 years old, Nizhnevartovsk

I'll start with humor: held accountable, so I recommend getting interested

Firstly, you need to figure out this business yourself. Mentors, books, videos and audio materials will help you. Fortunately, since the late 40s of the last century, a lot of information on this topic has accumulated.

Secondly, understand that all methods give results if you follow them exactly.

Thirdly, you need to know that there are a lot of people and there is enough “work” for everyone. There are hot, warm and cold contacts. Depending on the selected type of contact, use methods of working with a particular client.

Fourth, act on a 5-point sales technology:

Made contact.
Found out the values.
He made an offer in terms of values.
Replied to revival.
Closed the deal.

Fifthly, remember your expertise in business no one will lift you up. Study and you will succeed.

P.S. The mentor goes to the one who gets him

Question 7. Network marketing business: how long does it take to build it and how much can you earn? Sonya, 35 years old, Kaluga

If we are talking about incomes above the average salaries in your city, then there are many examples when people reach such incomes from two weeks to two months.

This is natural during daily meetings on the technology of building organizations and complete immersion in this area.

There are also people who, for years in SM, simply receive additional income in addition to the salary at their main job. At the same time, their employment is minimal and is not aimed at earning big money.

You can earn above average: from 70 to 80 thousand rubles per month (1.5-2 thousand dollars ), and it’s already quite good 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 arrive every three weeks when the current catalog closes:

Arrival at the end of August 2018

Arrival mid-September 2018

Question 8. Is it possible to do network marketing from home via the Internet? Vladimir, 28 years old, Moscow

Vladimir, yes, it is possible. The main thing is your desire to acquire new skills and apply existing ones to achieve your goals and realize your dreams. Now you can show presentations and exchange any data through Skype, Instagram, WhatsApp, Telegram, Viber and other online platforms.

It doesn’t matter what city your potential partner is located in, their turnover will also help increase your income.

Question 9. How to properly build a network in MLM remotely? Dmitry, 25 years old, Kursk.

The main thing is to build an organization using a duplicated system and create joint online meetings, conduct training for future partners.

Smoothly recruiting a team in your wall station, add friendly meetings. Moreover, leaders in other cities repeat after you, and on the same days they create the same meetings around themselves.

Learn to do it perfectly yourself, and then teach your wards to do the same in relation to their partners and then you will have “a book writing books.”

Question 10. How do you evaluate 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 both in price and quality.

If this were not so, then clients in 100% of cases would prefer the products of “classical promotion” companies and network marketing companies would not exist for a long period of time.

I enjoy using my company’s products and even recorded a short motivational video on this topic:

Conclusions

Is it possible to make money in network marketing? - definitely, yes! However, this is not a panacea or an ideal business. As I already wrote, it has its advantages and disadvantages.

If you seriously engage in business in this area, you can get both financial freedom and time resources to create your own lifestyle.

As with any other issue, it is very important to take an objective approach to studying 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 not to be lazy and carefully analyze the company whose client or partner you are going to become.

I wish you success in your network business and see you in new articles!

PS. Friends, have you 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

online business magazine "PAPA HELPED"

Rinat Admiralov

Network marketing as a type of business is conquering new heights. However, not everyone is familiar with it - some trust it and are happy to cooperate with such companies, while others try to stay away from MLM trading and sincerely consider it a scam and a “pyramid”.

Network marketing and financial pyramids - similarities and differences

The second category of the population is only partly right - the principles of network marketing are actually similar to financial “pyramids”. It lies in the fact that in order to make a profit you need to attract other people. However, this is where the similarities end.

Simply put, in the second case, you can bring as many new participants as you like, but if they don’t buy anything, then the income of the “agitator” will be zero.

With the first option, the opposite is true - the client receives a percentage of the contributions of new members. However, the amount of the down payment is usually quite significant and can range from $100 to infinity. The participant most often does not receive a real product or acquires something that does not have a high value in the real world.

How to choose a company for cooperation

For those who have decided to start a career in network marketing, experts advise choosing the right company to cooperate with.

Here you need to pay attention to the following factors:

Training and information for consultants

For a beginner, this is very important - to have the opportunity to attend various trainings and consultations with more experienced sellers. Many companies offer step-by-step systems training that allows everyone to quickly move up the career ladder. In addition, MLM organizations often offer training and promotional materials.

Company reliability

There are two ways here - choose a start-up company or one that has already proven itself in the market. In the first case, you can find yourself at the very origins of the business and have more opportunities to attract new clients and get “quick” money. But here the “pitfall” is the new name of the company: firstly, the quality of its products is unknown to anyone, and secondly, it can quickly cease to exist.

In the second case - going to work for a reputable company - there are also pros and cons. From positive aspects: the products of this company are already known to the consumer, so they sell better. Moreover, it is unlikely to break up in the next few years. But there are also disadvantages - such companies already have enough distributors, and competition among them is high.

Manufactured products

It must meet the following requirements:

high quality and environmental friendliness are prerequisite! After all, network marketing is built on the principle of “word of mouth”, and in the case when the buyer is dissatisfied with the quality of the purchased product, he will recommend that his friends not use it;
a wide range - in this case, each buyer will be able to choose something special for himself and his family. How many advisors can be successful trading only two or three positions?
affordable prices - they should be such that 95% of the country’s population can afford to purchase this product;
not a very long validity period - this is necessary so that the client purchases these products as often as possible. If a product has a shelf life of several decades (for example, tableware), then the distributor will have to constantly be on the lookout for consumers. The ideal goods for trade are cosmetics, household chemicals, perfumes, hygiene products, .

Rating of companies

Continuing the topic, you can casually note that a company for cooperation is chosen based on its financial performance. And this is logical - the more sales a company has, the better its products are in demand among consumers, the more stable it develops and the faster it grows.

The ranking for 2018 is as follows (in billions of dollars):

Amway – $9.50
Avon – $6.16
Herbalife – $4.47
Vorverk – $4.00
Infinitus – $2.88
Mary Kay – $3,70
Perfect – $3.58
Natura – $2.41
Tupperware – $2.28
Nu Skin – $2.25
Tiens – $1.55
Primerica – $1.41
Ambit Energy – $1.40
Oriflame – $1.35
Belcorp – $1.20
Telecom Plus – $1.17
New Era – $1.16
Jeunesse – $1.09
New Avon – $1.01
Young Living – $1.00

In Russia there is a Direct Selling Association (DSA), whose main goal is to develop the network marketing industry. She is also involved in protecting consumer rights and monitoring compliance with ethical standards when doing business.

This association includes only 21 MLM companies out of many companies operating in the country:

Senior members of the APP:

Amway
Herbalife
Mary Kay
Oriflame
Tupperware
Tiens

Active members of the APP:

Jafra
Coral Club
Mirra
Morinda
Nu Skin
Tentorium
Faberlic
Florange
Associated members of the APP:
Accord Post
AlliancePrint
Filuet

Based on this data, you can select for cooperation great company and start, albeit small at first, but your own reliable business.

The basis of MLM (MLM) business is a special sales organization. It does not involve the presence of retail outlets, but the attraction of regular buyers of a certain company’s products using active marketing.

The success of a distributor (product distributor) in to a greater extent depends not on your own level of product sales, but on the number of like-minded people attracted to the business. It depends on how wide a network the team member builds. MLM structure is a classic type of network marketing that many have heard about, but are afraid to try.

Basic structure of MLM

Is MLM business a pyramid? Many people ask this question when they receive an offer to become one of the participants in the network structure. At first glance it really looks like a financial pyramid. The lower links, connecting to the network, ensure the growth of trade turnover and the well-being of those in the upper echelons. But the lower echelons earn money from the first purchase of products.

Distributors buy goods at a 30% discount. It is profitable to have high-quality branded products at a price significantly lower than the market price.
By selling goods at market prices, they get good trading margin(surcharge).
By attracting new people, the distributor generates passive income in the form of referral fees from the sales of his clients. More people on your team means more money.
The company gives gifts to successful independent entrepreneurs who have reached a high level, organizes trips to seminars around the world, and pays passive income in the form of remuneration for a stably operating network.

The first two positions are low earnings. The third and fourth positions are the levels when the business begins to generate significant income and becomes the main activity in life.

Please note that business participants do not invest money and passively wait for income, as happens in a classic financial pyramid. Distributors work and receive remuneration corresponding to the level of sales.

The second difference is that money is not invested with the promise of interest. Real goods are purchased for subsequent sale. When a person understands this, he does not compare network marketing with a financial pyramid.

Features of MLM business

The secret to the success of network companies is mobility, the ability to deliver goods to each consumer individually. Such organization of trade ensures the strength of MLM structures. The financial well-being of the participants depends on the work of the entire team. The income level of the upper echelons depends on the success of the lower echelons, so the former actively help the latter.

The condition for the stability of the business of a network company is the benefit of its founders. They do not need to build stores, pay rent, utilities and other costs for maintaining extensive infrastructure. The advantage for distributors is that they are their own masters and builders of their own business and begin to receive income from the first steps in business. First small, then bigger and bigger.

Benefits of Network Marketing

The variety of opportunities attracts new people to this field of activity. Business can be done online and offline. At your own discretion. Complete freedom of entrepreneurial activity is a big advantage of MLM.

The advantages include the opportunity to communicate on the sidelines of seminars. The advantage of seminar classes is the opportunity to gain knowledge and gain experience in running a business, which will be useful in life.

At the first levels, an independent entrepreneur does not pay taxes; the company does it for him. Going out to high levels, a business participant is registered in tax authorities and pays taxes according to a favorable simplified system.

Entrepreneurship in the network marketing system - minimal employment, minimal investment and the opportunity to gain financial independence.

Historical background

The beginning of network marketing dates back to 1927 and is associated with the name of K. Rehnborg, the creator of nutritional supplements. He was the first to involve a circle of close friends in the distribution of products, and this began to generate significant income.

Like-minded people from Nutrilite Products, Lee S. Mitenger and William S. Casselberry, created the theory of MLM marketing, which in practice has become an opportunity for many people to become rich.

The work of the founding fathers was continued by the leaders of the current Amway company, which has been operating on the market since the 50s. Today Avon, Oriflame, Mary Kay, Faberlic work according to this scheme.

Criticism of MLM

From the very first days of its existence, network marketing has been criticized. The main argument is that the bottom has to work like ants in order for the top to make a profit. This is true, but the upper echelon at the beginning of their careers were also “lower”, but they managed to build a subsystem that brought them to the top.

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

Today in our country there are quite a lot of companies that operate in the MLM market. And not all of these companies promote this business correctly. I can't say why this happens. Perhaps distributors are creating the wrong work.

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

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

Or - you don’t build a network yet and you won’t be able to receive money until you reach a certain level of personal turnover.

Our hair stands on end from such rules in companies.

Let's figure out what network marketing is. And first, let's turn to the all-knowing Wikipedia. And Wikipedia tells us that

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

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

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

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

Your check in this case will be from 100-200 thousand rubles per month! And if you don’t run away from business in the first stages, you will definitely have the same result.

Myths about network marketing

Only the top make money

Probably, if you don’t think so yourself, you’ve heard this objection. Yes, many people (even those involved in network business) believe that only those who came at the very beginning earn money.

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

After all, in the network business, people earn money from product turnover, and not from how many people they managed to connect. And if you are able to create a team that will be able to create a large turnover in the country’s market, or abroad, then you will earn decent money.

This is a business for beggars

Oh, how much time is spent explaining to people that network marketing is not a means of earning money for the poor and that there is a lot of money in this business that brings huge income to the partners of network companies.

Yes, I agree that people come to MLM completely different people. And those who earn a lot and those who earn nothing. And of course those who are poor are the majority. Well, because, in principle, they are the majority in our country. And therefore one gets the impression that only the poor are here.

But I assure you that this is not so. And there are a lot of people who have their own traditional business with an income of half a million, and begin their journey in network marketing because they see in it great prospects for their development and replenishing their wallets)

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

We need to convince people

I’ll say right away that if you are going to convince people about network business, then this will definitely not lead you to success. Because everyone whom you once convinced, persuaded, hypnotized, will wake up and think to themselves: “Damn, why did I even do this, now I was scammed.” And they will never pick up your phone again.

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

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

We need to sell here

This myth comes from the misconception about network marketing where people think that it is just a direct sales business.

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

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

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

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

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

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

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

I will tell you 100% that when fulfilled right actions, you will definitely have it!

How not to lose money in network marketing, or how not to be a sucker

Here I will keep it short and simple! If you have not yet chosen a company in which you want to develop, then choose one that does not fit!

If your company is not a financial pyramid, then in any case you will remain in the black, because you will already have a discount on the products!

Friends, I hope that the time I spent writing this article will not be in vain and it will definitely help many people understand all the myths about network marketing and show the real things in it.

If you decide to seriously engage in network business, be sure to add me as a friend at VKontakte. I am sure that we will be able to share experience and interesting ideas to promote our common cause - network marketing!

Well, write comments here below. I will always be interested in communicating with you and hearing your opinion on this entire topic.

And see you soon in new articles!

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About network marketing - Myths and reality: 31 comments

Love
Alexey, interesting article, in business, as in any job, you must first of all study and implement the acquired knowledge
Irina
Indeed, not everyone, and even few people, understand the principle. And they think that by filling out a form with the company, everyone already owes them everything.
Natalya Dryaba
Thank you very much for the articles! I read it avidly, very useful and interesting!
Irina
It’s very interesting, especially for me. I’m not young, but I decided to try it. And now I’m studying this business. And your instructions and comments are very interesting. I think I will have many questions for you in the future.
Anonymous
And in my opinion this is nonsense.
Anonymous
Within any company there is a certain amount of money supply, which is essentially distributed among the participants, and those who are at the top of this economic hierarchy are unlikely to want to share with anyone. After all, each of you wants to earn money yourself, and not give money to someone. Accordingly, because the total money supply in this flow of goods is not infinite, then the lion’s share of it is received by a few, and the majority by little things. Thus, the majority cannot earn millions by definition.
In general, there is nothing illegal or immoral in this, except for that immoral moment when people like you start fooling newbies about the essence of the business, instead of directly saying that you need to look for those who, in turn, will look for those, etc. etc., who will buy the product, and at the same time you can try to sell the product to someone else. But you need to be able to do this and not everyone is given this and there will not always be sales, today there is, but tomorrow you didn’t sell anything, but you need to eat every day and other expenses.
Yes, it requires effort as in any business, but most people are simply not inclined to do this and do not want to do it, and they are often misled by veiled reasoning instead of briefly and essentially saying what exactly a person should do to earn money and that perhaps he won’t earn anything, but the company won’t just pay him the money, since he couldn’t sell the goods.
And the subscribers on your channel are simply ridiculous, not impressive. All your supposed income is only in words, which we cannot verify in any way, as well as the veracity of your other information.
1. Post author
  Well, here you are right. Not everyone will earn big money in the online business. Not everyone is ready to devote themselves to business like that. But this happens in absolutely any field - the one who works hard earns money. Those who don’t work hard are left behind as outsiders.
  And the principle of operation is simple and the usual statistics work:
  — Conduct three meetings a day, you will earn 30 thousand in three months. TESTED ON YOURSELF AND ON YOUR PARTNERS! I will NOT describe here why this is so. But just count the statistics, approximately 80/20.
  
  Even if it’s terrible to conduct meetings and you don’t know how to do it at the very beginning, then all the same, one out of ten will come to the team. And that's okay.
  
  Now ask those who chew snot and say that he was online and did not earn anything - did he hold three meetings a day? I'm pretty sure he didn't spend that much time in a week. And then ask the leader of the company - how many meetings does he hold, what time does he get up, etc. Everyone who earns money devotes their life to it!
  
  By the way, I don’t tell fairy tales either on the channel or here. I am 100% sure that every person can earn money here. But whether a person is ready to do something for this, he already decides. We have a tool, a product that everyone uses and specific training on what to do. The rest depends only on the person. No one will hold meetings for him..
  ______
  As for the fact that the channel is not large, there are several reasons for this:
  1. The channel is young. The top network marketing channel has about 60 thousand subscribers. Moreover, he is about 10 years old.
  2. Wrong promotion strategy and content plan. But I'm working on it now
  3. The network business niche is not that big. And the maximum I can reach here is 100 thousand subscribers. There is such a goal.
  4. And finally, the number of subscribers is not important. Their quality is important. I don't have an entertainment channel
Anonymous
In general, I think network marketing is an abnormal type of activity, which people who do not want to get a normal professional education go into, because... you need to make efforts and study in order to eventually become a good specialist, as well as those who want, without making efforts, to earn the way entrepreneurs usually earn, who, as many cases as I know, spend a lot of time and effort every day to have a high income , because you need to withstand competition, you need to control all processes, negotiate with numerous counterparties. And these are people who, thanks to entrepreneurial experience, have not in theory, but in practice, an understanding of business, including trade in goods. Why do you think, despite the fact that, according to you, everything is so great in network marketing, entrepreneurs do not switch to it en masse, but instead en masse engage in ordinary business activities, although in network marketing they were spared from many things, for example, the need to do accounting , deal with legal issues and much more.
And who in the country do we know of famous network businessmen who achieved wealth in this way? Here I will answer you myself - not a single one, because... this is a sham. You networkers like to say a lot that it’s great not to work for an uncle, but for yourself, although in the end you yourself sell some uncle’s goods and in fact there is no difference in this moment. But in a normal job, you have a guaranteed monthly salary, as well as an employment contract with paid vacation, sick leave and, ultimately, pensionable service, etc.
Network marketing is legal, but it's risky and you can get burned. It’s good if the product you are selling does not need to be purchased in advance, but a demonstrative sample is given, and if you can only sell it by purchasing it yourself, then the situation will be aggravated by the fact that not only may you not earn money or little, but you will also have to spend money yourself.
And if you consider network marketing to be normal, then why are all the advertisements about attracting people to you always disguised as a need for an executive assistant, etc., instead of honestly writing that we are talking about network marketing?
1. Post author
  Well, if you say that about network marketing, then you just have a vague idea about it. Now I will answer the questions you asked in order:
  
  1. If we talk about real network marketing, then this is not sales, etc. This is, let's say, the job of a manager. Those. managing a large organization. And this is the skill of negotiation, the skill of motivation (without the ability to force), the skill of organizing clear work of the structure, etc. In general, here, in order to succeed, you need to learn a lot in the process and put it into practice. To do this, we watch webinars and go to events (and not to clap, as some people think). Therefore, network marketing is not sending letters to social networks and not posting advertisements. This is a complex process of promoting a product and increasing the volume of the sales market that needs to be organized. This is what we do. By the way, this is another reason why people don’t succeed online—the reluctance to learn.
  
  2. Regarding the fact that entrepreneurs do not switch to network marketing - well, everyone shouldn’t be involved in networking) Understand correctly, I’m not saying that network marketing is the most ideal and best way make money. That would be nonsense. In order to earn big money, you need to love what you do. Remember Steve Jobs and others. I don’t know what you do, but I will say that every successful entrepreneur does not do business for money... But because it is his favorite business, he puts his soul into it. Therefore, I don’t see the point in dragging everyone into network marketing. By the way, you can earn good money at work. I also have nothing against work. I know a lot of people who work and are happy.
  
  3. Regarding networkers, I won’t remember them all. But, for example, Brian Tracy. Quite famous in his circles. And, by the way, if you, for example, don’t know him, then this doesn’t mean anything, because only a few people are famous throughout the world. Well, many after networking, gaining experience, etc. open their own businesses. And in the future we will open our own business (not a network one), because it is normal to grow, to open our own business, our own enterprise. You don’t look at the zombie networkers who say that it’s just networking and that’s it. As a rule, these are either beginners or non-professionals in their field.
  
  4. The risk, in essence, is only that you can lose time. And then only if you do nothing. It is impossible to lose money here (if this is a normal network company and not a pyramid). At the very beginning we invested 2000 rubles. for the wife’s contract, and 2000 rubles. for my contract the next day. Those. 4 thousand rubles, which were recouped instantly. And if the conversation is about investments of 50-100 thousand rubles, then it’s worth thinking about whether this is a financial pyramid
  
  5. Idiots send out job advertisements about attracting people through disguised job advertisements. I can't really name them anymore. Moreover, this is the most harmless thing about them
Anonymous
But here I just stated my opinion. It is clear that this will not change your position and you are unlikely to give up network marketing because of my words, because and you know what he is. If you personally have managed to achieve high income through network marketing, well done. But exceptions only prove the rule. This is not a reliable way to make a good living. Much more effective way- this is to be a good specialist in any field. Personally, I have respect for this, because... Growing professionally and getting an education requires a lot of effort, but then you really don’t depend on any “uncle” as a networker, because You can always change your job if you are not satisfied with something, for example, the size of the salary, unless of course you yourself are a good specialist who will be happy to be hired anywhere, but for this student years you need to really study, and not earn extra money in network marketing. Otherwise, you won’t achieve anything in network marketing, nor will you learn properly as a specialist.
Anonymous
And yes, from observations, the majority of networkers earn absolutely nothing, a few earn millions, but not at the expense of their personal professional qualities, but at the expense of the majority of the stupid layer of networkers who do not understand that the top will always earn at their expense, and you say “not to work for an uncle, but for yourself,” although it is precisely for several uncles and aunts that networkers work, essentially like slaves, risking earning nothing at all and at the same time having no social package and a guaranteed monthly remuneration, as in ordinary work, where they “work for their uncle.” And a relatively large stratum of networkers end up earning money just like at a regular job, although they could also earn money at a normal job without all this torment of selling goods. And as a result, unlike working under an employment contract, they cannot go on paid leave and what will happen to their pension if they work in a network business all their life.
Anonymous
And yes, for this to be economically justified, you need to have a lot of meetings with people every day, and not 2-3, taking into account that not everything will work out with everyone, high turnover is also typical for network business, etc.
Anonymous
In general, of course, if someone is confident in their abilities, they can try network marketing, but in the end, in order to earn like some kind of real entrepreneur, you need to make no less efforts, and for me, it’s better to be highly educated, so that due to your professional knowledge have a high income, working no more than 8 hours, with normal days off and other amenities. But this must be preceded by intellectual work during his student years. Although for me, this is disproportionately less effort, because... study for 5 years, and then for the rest of your life, when you already start working, including network marketing, but then throughout your life you can live normally, and not worry about sales.
1. Post author
  Well, here everyone chooses their own. Some people like certainty in terms of work, etc., while others want to earn money differently. For example, I worked for eight years. And I never liked it. For me, getting up in the morning and going to work was torture, although I saw people around me who really liked it.
  
  Therefore, when I learned that it was possible to live differently, I immediately jumped at the opportunity. After four months I could afford to quit my job.
  
  By the way, sales is not network marketing at all) We now even forbid our team from going to stores, offices, etc., because it spoils the image. But when large number people simply use the products (and, mind you, they don’t buy tons, but simply use them). Everyone buys their own shampoo, toothpaste, coffee, etc., then this is much better and more stable than ten people with wide eyes proving to others and selling the product. I myself went to sales at the beginning (because I was taught incorrectly) and I can definitely say that it’s not for me)))
  1. Anonymous
    I still don’t understand what exactly generates income in your case. You say that it’s just that, for the most part, people, i.e. networkers use the products because According to your statements, you are not making sales. But what is the point then, if every networker simply spends money on the products of his company and it is not a fact that these are worthwhile products, I prefer to buy this or that product from well-known world manufacturers rather than spend money on experiments. That is, the minus here is that the networker must spend the money he earns only on his company’s products and cannot choose another manufacturer, otherwise there will be no profit for other networkers to generate. And in the end it turns out that all networkers provide for each other by buying goods. But some earn more, some earn less, and accordingly some earn at the expense of others. There is not much difference between a network business and MMM in this case.
    I repeat, the only source of income in a network business is the sale of goods to the relevant company. Someone must buy this product, otherwise there will be no income from it. This raises the question, how can a networker make money, and even better, how do you describe it here if he has to spend money on purchasing his company’s goods? Or some networkers will wait for others to buy more in order to make money on them, while they themselves will not buy anything or will buy little. 02/12/2019
    And why there are generally negative reviews about network marketing from people who have had experience in it, don’t you think there is any pattern in this. For normal work, without a catch, this is uncharacteristic.
  2. Anonymous
    And most importantly. You are essentially lying to beginners, exaggerating income and prospects, hiding the fact that earning the way you describe is only possible with significant effort and it is not a fact that anything will come of it. If you are honest and straightforward, then even if you fail, at least there will be no complaints against you, at least justified.
  3. Anonymous
    If network marketing were so good, then over many years in Russia it would have grown substantially due to everything more people. But this doesn't happen.
  4. Anonymous
    And about product promotion. To promote it, you need to have a good understanding of it and you don’t have to use it for this, you just need to study it detailed information about the properties, various nuances about the product, ideally, this should be taught by the company producing the product. For normal companies, this is the norm as part of corporate training. Otherwise, according to your logic, sellers in all stores should use the products of their store, although this is not the case. And discussions about the need to use the company’s products to promote it are precisely typical for network companies, because It is the selling of these products primarily to networkers that is the key to profit and is the main goal of a network business. In ordinary stores, where sales assistants are normally trained, they provide training at the employer’s expense about the product they are supposed to sell. This happened to a friend of mine, and for successful trading this was enough and there was no need to buy goods from your store to work in it, because... this is not normal, the employee is not obliged to do this.
    The calculation of the creators of network companies is based on the fact that it is networkers who must make a profit by purchasing a worthless product, which, with conventional advertising and other marketing rules, simply cannot withstand competition with global analogues. It is the creators of the company who mainly make money from steaming. Networkers, for the most part, simply buy unnecessary goods in the hope of fabulous enrichment, thinking that they will thereby be able to expand their sales among non-networkers, but it all comes down to the fact that basically only networkers buy their products, ultimately earning nothing. It cannot be otherwise, given that for a good income you need to regularly sell a lot of products (because the expensive ones will not be in great demand), then the profit is simply not evenly distributed among all networkers, and according to the hierarchy, the top receives more and the ones below get less and less . In this respect there is little difference from MMM. The only thing is that this is legal, but it does not change the essence of the matter - only the top will get rich, because The network marketing system itself is built this way, by selling unnecessary goods to the overwhelming majority of networkers, although similar products from non-network companies may cost significantly less or be of better quality.
    Thus, in order to truly make money in an online business, you need to lure a lot of people into it and make money from them, because It’s unrealistic to simply do this through personal sales, because this approach simply will not work, given that the products of network companies are not unique and do not have other qualities that give them significant competitive advantages in comparison with products from other companies.
    Accordingly, in any case, some will always earn at the expense of others, and not through simply selling goods, as is typical for ordinary stores, where there is no such approach to disproportionate recruitment of personnel.
    Most people who go into network marketing are poorly educated people or who have not become good specialists, as well as a socially vulnerable category of citizens such as pensioners, maternity leave, who for some reason cannot find a job.
    Natalia
    Write interestingly😂👍Indeed, people are simply too lazy to understand the intricacies of network marketing; it is much easier to call it a pyramid and a scam. Success depends not only on the right company, but also on the person you came to join the team.

October 12, 2015

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

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

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

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

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

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

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