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Network business in simple words. What is network marketing and how does it work

MLM business, or network marketing, began to conquer the Russian market back in the 90s of the last century, and still remains in trend, attracting new entrepreneurs to its ranks. Thanks to this form of sales, we distribute all kinds of additives, cosmetics, detergents, dishes, etc. According to the Direct Selling Association, 43.5% of the market is occupied by personal care products, 29%- products that promote a healthy lifestyle. 11.2%- clothing and accessories, 9.5%- household chemicals, 5% - household goods and others. But, despite the fairly high demand for goods, and the growing turnover of companies engaged in network business, our attitude towards MLM is very ambiguous.

  • What is attractive about MLM business?
  • Why people don't like MLM: 3 reasons for distrust of business
  • How to start a business from scratch in MLM
  • How to choose the right company to work for and start earning money
  • 3 tips on how to make money with network marketing
  • Internet network marketing: a second wind for business?
  • MLM business trends 2018
  • How to develop a business mindset using MLM

On the one hand, hundreds of thousands of people come to the MLM business who want to earn money and build a career: at the end of 2017, 3.8 million people were engaged in network marketing. With another- They try to avoid network marketing and often do not consider it as an opportunity to make money, preferring a stable job with a stable monthly payment. The thing is that often people have no idea about the true face of network marketing. Let's try to figure out what MLM business is today, what positions it occupies in Russia, whether it has prospects and what awaits it in the future.

What is attractive about MLM business?

The name MLM comes from the English multilevel marketing, that is, multi-level marketing, sales. Network marketing is a certain type of sales of goods and services by independent distributors. Each of them can not only engage in sales, but also attract new partners, and they, in turn,- theirs. Thanks to this approach, a “network” is formed, each participant of which can receive interest both from their own sales and from the sales of people they attract. The larger the distributor network- the higher his income.

Let's say you have a store that sells cosmetics. You can only make a profit when buyers come to you. Opened - earnings will also depend on its customer attendance. Network marketing will provide completely different opportunities. People themselves will order the necessary goods, buy them and distribute them among their friends. It is for this reason that it is so attractive to companies producing certain products. "Dinosaurs" of the market, such as Avon, Mary Kay, Oriflame, Amway do not have worthy competitors for the simple reason that their products are often sold out almost immediately, even at prices that are several times higher than “store prices”. Sales through stores are fraught with competition and unnecessary problems that can be solved through network marketing. The manufacturer does not need to spend money on advertising, renting retail space or incurring other expenses. But for networkers, the big plus is that companies not only earn money themselves, but also give everyone the opportunity to earn money.- those who like their products.

In network marketing you can:

- have a flexible work schedule;

- get by with minimal financial investments;

Make a career;

- create passive income;

- transfer the contract by inheritance or sell.

But despite all the advantages, not everyone manages to achieve success in MLM.

Millions on MLM: how American multi-level marketing differs from Russian

American MLM marketing differs from Russian only in the attitude of representatives of two nationalities towards it. Americans most often consider network marketing to be a side hustle or second job. They are ready to devote some time to it, but not their whole life. If things are going well, and there is not enough time to manage a multi-level company, a few leave their jobs and engage only in MLM business. Some people can actually become millionaires through MLM. But this is only the top of the pyramid, at the foot of which there are thousands of less successful entrepreneurs.

In Russia, newcomers often try to invest all their strength and resources into a new business and constantly run around among acquaintances and strangers, offering goods and trying to sell them at any cost. To build their own network, many lack the skill or desire. Beginners mostly see only a system of bonuses and bonuses plus the opportunity to purchase goods cheaply.

Network marketing today, like any other business, requires a reasonable approach and a clear plan of action. And one more thing: if abroad the times of trials of network companies are a thing of the past, and business has become completely legal and profitable, then in Russia the possibility of encountering fraud still exists.

Multilevel network marketing or MLM (multilevel marketing) is a popular type of business that perhaps everyone has heard of.

However, the knowledge of many is limited only to theoretical concepts. Some people believe that network business is purely a scam, while others believe that building a network structure is the only way to succeed in life and become financially independent.

Some, not wanting to delve into the study of this topic, perceive network marketing as nothing more than an opportunity to buy a good quality product if necessary. However, with the right approach, this type of business can become a source of income. Let's figure out what the essence of network marketing is and how to make money from it.

Network Marketing - General Information

In simple words, the definition of “network marketing” sounds like this – building an extensive distribution network and effectively promoting a product. Translated from English, the abbreviation MLM means marketing, consisting of many levels.

Multi-level network marketing involves a special form of product sales. Sales are handled by distributors who sell the product and expand the network. Total income is determined:

  • own sales;
  • the activity of attracted partners, the number of their sales.

It is important! Many people do not see the difference between a multi-level business and a financial pyramid, however, there are several fundamental differences between them. First of all, the MLM business is a legal activity, which, with proper construction of the network structure and close cooperation with a large, well-known company, is guaranteed to bring profit.

Historical excursion

The network principle of business development first appeared in the mid-30s of the 20th century. It was then that Karl Rehnborg, the owner of a nutritional supplement company, decided to entrust the distribution of products not to sellers, but to ordinary consumers of the product. After introducing this form of cooperation, the company’s turnover increased to 7 million dollars.

In the mid-20th century, two employees of Karl Rehnborg decided to independently build a network business and organized the world-famous American Way Corporation (AMWAY).

Interesting fact! In the USA, absolutely everything is sold through the MLM principle. There are about 4 thousand large network companies in the world, their total turnover is more than 300 billion dollars.

According to experts, the traditional form of selling products will disappear in the near future, and it will be replaced by network marketing. However, in Russia and the post-Soviet republics the situation is far from predicted. Of course, there are network companies, but they are clearly not yet capable of replacing traditional forms of sales.

Principles of multi-level marketing

The principle of operation of an MLM company in some aspects is similar to that of a pyramid - income depends on the activity and sales level of distributors.

From the income of each seller, a certain percentage is calculated in favor of the person who brought this particular seller to the network. That is why those who are at the top of a kind of pyramid and have an extensive distribution network have a greater chance of becoming successful. The main motivation of distributors is financial incentives, which depend on the level of sales.

The main difference between a network business is cosmopolitanism; it has no geographical boundaries, however, doing business is subject to the laws of the country where the MLM company opens a representative office.

Operating principles of network marketing companies in Russia

Such companies are prohibited from:

  • announce wages, since an employment contract is not concluded with the client;
  • attract persons under 18 years of age;
  • sell products without quality certificates or licenses that are hazardous to health and the environment.

To become a distributor, you must complete the following steps:

  • agree to the cooperation of a company representative or visit the company’s office;
  • fill out and sign the agreement;
  • undergo training, usually several lessons from a consultant;
  • purchase catalogs and product samples;
  • start selling the goods.

Important! When starting an MLM company, be prepared that you become a freelancer without social guarantees. In addition, working in such a company does not entitle you to a pension. The main reason why people are afraid of working with a network company is the high probability that the representative office will be closed and the person will be left without work.

Types of MLM marketing

Experts distinguish the following types of MLM marketing:

  • stepped – the most popular;
  • matrix – only 10% of MLM companies choose this form;
  • linear;
  • binary – suitable for beginners;
  • mixed or flexible.

Stepped

A popular type of marketing involves attracting distributors to expand the network in all directions. Payment depends on the number of sales within the branch. A consultant can separate with the group if they reach a certain level.

Matrix

The main difference is a clear limitation on the number of participants in each matrix. The most common matrices are:

Where the first number means the number of participants in the first line, and the second number means repetitions of the first generation. As soon as one matrix is ​​filled, the next one opens.

Linear

With this form of doing business, distributors are equal, and uniform prices for goods apply. With a linear form, restrictions are provided only in depth. The lines created by the distributor are paid for, and income increases gradually.

Binary

This marketing scheme is most convenient for beginners; it provides two branches on one line. The distributor can invite two people. Income is distributed as agreed - equally, 60% to 40% or 65% to 35%.

Mixed

It involves a combination of several types of MLM marketing.

Interesting fact! Women are more interested and enthusiastic about network sales than men. For every one male distributor there are four women.

Advantages and disadvantages

Among the advantages, experts highlight the following:

  • There is always an opportunity to improve your level of education.

Serious network companies conduct training seminars and meetings with mentors for their employees. Unfortunately, training is usually organized at the expense of employees.

  • Flexible schedule.

You are not bound by a strict work schedule that is set for office employees. A person allocates time for work at his own request. The main thing is to be prepared for the fact that not every day will be financially successful.

  • No income limit.

If you have talent, a competent approach and creativity, earnings will increase.

  • Financial independence.

Working for a network company is essentially your own business, it can be expanded. It is important to understand that the better the quality of the products, the easier and faster you will create your own network and achieve financial independence.

  • Close-knit team.

Working in online companies is always very easy, there are no intrigues, and newcomers are always helped and supported.

  • Exciting work.

You will communicate with a huge number of people, you will forget about the tedious sitting in the office.

However, network business also has negative sides:

  • Unstable income.

Network marketing does not guarantee constant high earnings and, especially, the payment of a constant salary. The larger the network, the more stable the income.

  • The need for material investments.

Any network business requires material investments. You will have to buy catalogs, product samples and even corporate clothing.

  • Emotional stress.

As a rule, product distributors cause irritation and negative emotions in people. You need to learn to take this philosophically and choose for yourself an effective way to get rid of emotional stress.

The pros and cons, as well as the whole truth about this form of marketing, are written in books that are a must-read for those who plan to professionally engage in this type of business:

  • Don Fayla “10 lessons on a napkin” - business basics for beginners;
  • Yarnell Mark “Your First Year in Network Marketing” - how to build a business from scratch;
  • John Maxwell “Leadership” - how to properly invite people to your network;
  • Tom Schreiter “Turbo-MLM” - the whole truth about the network principle of doing business;
  • John Milton "The Greatest Networker in the World" - an autobiographical book, simple examples of network marketing.

Network marketing how to make money - 7 successful steps

Experts note that this area of ​​business is not easy, but promising. To achieve financial independence, it is important to adhere to certain recommendations.

Step #1: Choosing a company

The right choice of a reliable company is the foundation of your future business and success. You can trust a company if it:

  • has proven itself well in the market;
  • offers a high-quality, useful product;
  • has been on the market for many years;
  • offers several forms of income - active and passive.

Step #2: Education

If you think you know everything, you won't succeed in your online business. As a rule, such self-confident people become disappointed in this form of business. Remember, practical attempts to realize yourself will be more successful if they are preceded by theoretical preparation.

The most common form of training:

  • in the company on special courses;
  • from the direct supervisor.

Step #3: Work in two directions

Activities should be carried out in two directions:

  • active sales;
  • attracting new network members.

In the first case, you ensure your current income, and in the second, you guarantee constant payments in the future.

It is necessary to strive to ensure that the income from passive earnings exceeds the profit from active sales.

Step #4: Website creation and use of social networks

The possibilities of Internet resources are endless. Constant work on your own website and social networks will lead to the fact that potential customers themselves will begin to be interested in the product and earning opportunities.

It is most effective to contact a specialized company that promotes websites and products.

Step #5: Planning

Start each day with planning. Otherwise, you will soon begin to rush, get confused, and feel chronic fatigue. As a result, important things will be postponed until tomorrow, and this will inevitably lead to a decrease in profits.

Step #6: Development and self-improvement

All companies whose business is built on the network principle regularly conduct seminars, trainings and webinars for their employees. Take every opportunity to develop your skills and experience, only in this case will your business prosper and develop. As soon as you stop developing and decide that you know everything, your income will stop growing.

Step #7: Be better than others

Important! Be prepared to work – a lot and hard. Don't expect instant results; the path to success is long and difficult. However, if you show persistence and leadership qualities, you will certainly achieve your goal.

How to effectively develop your own network

The skeleton and reliable foundation of the business are partners. According to statistics, the optimal ratio is:

  • clients – 95%;
  • partners – 5%.

However, you need to spend up to 95% of your time searching for 5% of distributors. Where to look for business partners? Here are some practical recommendations.

Before you start forming a network, remember one rule - do not invite everyone into the business, but only those who meet certain criteria and are sincerely interested in distributing products.

Familiar

The traditional way of building a network in business. Start by making a list of people you know and then add to it regularly.

When communicating with each acquaintance, be sure to ask them to recommend 3-4 acquaintances who may be interested in the product. Don’t be upset if most of your friends don’t agree to your proposal; you always have the opportunity to return to this conversation after some time.

Advertisements in the media

According to statistics, this method has a fairly low percentage of effectiveness, while the method is quite expensive. Remember that the people who responded to your ad are looking for a specific job and are not interested in growing your business. When composing advertisements, honestly indicate all the nuances and features of the work; in this case, people who are truly interested in online business will be interested in the offer.

Advertisements on the street

Quite an effective way to find partners. Performance depends on several factors:

  • text literacy;
  • ability to conduct personal meetings;
  • ad locations.

Internet capabilities

Look at sites where people post their resumes. Select the most interesting options and call them. Tell the truth, do not hide the fact that we are talking about network marketing.

Place advertisements on the Internet on thematic websites, forums, and social networks. The more information there is on the Internet, the more people will respond to your offer.

It is important! A distributor who uses the company's products automatically attracts customers and partners. Simply talk about the benefits of the product and demonstrate the results.

How to distinguish a pyramid from network marketing

Of course, there are many network companies with a good reputation, but companies with a negative reputation appeared that disguised themselves as an MLM company. Such companies with a negative history used the concept of a pyramid. At first glance, the two principles - network and pyramid - are similar. However, in practice there are significant differences.

  • The finances of an MLM company are formed from products sold by distributors, and in the pyramid - from contributions from each participant.
  • To become a member of the pyramid, you need to make an initial payment or buy completely useless goods for a large amount.
  • The network company does not recruit people, but trains them. In the pyramid the situation is completely opposite.
  • The organizers of the pyramid are excellent psychologists; in the recruitment process they play on basic human feelings - greed, fear, stupidity.

It is impossible to win in a pyramid; it is built on the principle that all losing participants pay for a comfortable life for several founders of the scam.

Features of network marketing on the Internet

Any business can be successfully developed online. A multi-level company in this sense is no exception. The Internet opens up almost limitless possibilities for promoting goods and building your own network.

The features are as follows.

  1. No geographical boundaries. You can sell goods all over the world; you don’t have to be present at the transaction to do this.
  2. Sales can be conducted at any time and anywhere.
  3. All processes are automated.
  4. Communication only with the target audience and interested parties.
  5. Large selection of tools for product promotion.

Leaders in the network market

Summary

Undoubtedly, the MLM industry is a promising line of business, since such companies easily survive economic crises without reducing profitability. According to statistics, 20% of billionaires began their careers in such a company, and the average profit per person is 4 thousand dollars per month . The statistics are quite attractive, but to achieve success, you will need to work hard and communicate with people.

Good day, my dear readers! Many people interested in the network marketing industry are always concerned with one question at the very beginning: “Network marketing, what is it really? What is the job of a networker? I'll tell you about this right now.

From this article you will learn:

Three simple actions that a networker performs

Creation of a client base

But what does it mean to create a customer base? Doesn't this mean that we need to distribute some products? Unfortunately, most people have exactly this idea of ​​network marketing: running around doorways with bags and trying to sell goods. Let's find out everything right now so that no one else can mislead us.

  • First difference. How does a real networker differ from a distributor? The distributor's task is to find the client in any way and try to sell him the maximum amount of goods. The easiest way to find clients is by door-to-door. The algorithm is simple: sold the goods - received the money.

A networker does not have to physically sell a product or service to a client. A networker sells a person a new quality of life, which the client will achieve by purchasing a product or service of the company.

  • Second difference. Distributors primarily sell durable goods. For example, a vacuum cleaner. How often do you buy vacuum cleaners? Infrequently. What about electric kettles, frying pans, screwdrivers, etc.? We do not buy these products as often as, for example, cosmetics, vitamins or washing powder. Therefore, you will not see the person who sold you the product for a long time, and after a while you will forget about him. And if this seller doesn’t come to you anymore, why would he sell you high-quality and expensive goods? It is much more profitable to buy a cheap, low-quality product and sell it to you at a higher price, keeping the difference for yourself. But then he will have to look for a new client again. Network companies sell goods that tend to run out quickly so that customers repeat the turnover every month, for example, cosmetics, dietary supplements, cleaning detergents, and so on.

It is not profitable for a network marketing distributor to talk about low-quality products, because next month the client will refuse the low-quality product, so all network marketing products are of high quality.

If, of course, the company thinks about its future. Distributors do not have to look for new customers all the time, but it is enough to have 5-6 regular customers and not look for anyone else. Moreover, a distributor of a network company can use in his work an Internet site that will inform visitors 24 hours a day about new products and services of your company. This is called intellectual distribution. It is fundamentally different from the physical one that the distributor deals with.

  • The next, third, important difference is the appearance. The distributor always walks around with large bags in which he carries goods for sale. The distributor works in business or simply neat clothes, with a briefcase or folder in which he carries documents, a history album, a catalog and other tools.

The distributor-networker looks elegant, he does not need to carry bags with goods at all.

So, we have found out the first task of a networker: with the help of his mentor, an information sponsor, to find his first clients and provide them with the latest information about the company’s products and services. Where and how to find your first clients? This is the least of the problems. Each network marketing company has several ways to quickly find 5-10 clients, including personal meetings and group meetings, as well as an Internet site that works for you 24 hours a day.

It is worth remembering that a new distributor never works alone. At the initial stage, he is helped by his mentor - an information sponsor. The sponsor simultaneously teaches the newcomer all the skills of doing business and holds first meetings with his acquaintances, showing him how to do it. He and his superior sponsors are interested in the success of the newcomer, so they are ready to reveal all their achievements and secrets.

Only in this business can you hear from a manager: “Dear colleague, how can I help you so that you become more successful in our business?” Therefore, a beginner is always supported and provided with all training materials, as well as effective tools for starting this business. Everything is very simple.

Creation of a distribution network


The main networker is a commission from the company. What does this mean? As usual, you tell your friends and acquaintances about new and high-quality products and services of the company. Someone you know starts using the company’s services and buying its products.

Let's give a simple example. Imagine that the company pays you only $10 for each purchase, even if only five of your friends want to buy something for themselves from this company. This means your commission will be $50. A little. Now imagine that your friends will repeat you and tell five friends the same thing, and that’s already 25 people. In this case, your reward will be 250 dollars. Next, calculate for yourself how much you will earn every month if these 25 people each tell five more of their friends. The number of buyers will increase to 125 people, and your commission will be $1,250.

The good news is that no one limits you in the number of people you invite, and you can plan your income yourself. People will start using the company's services and products without your participation. Moreover, many of them will not even know you by sight.

This means that having done the job once, you will constantly receive your fee as a percentage of the total number of sales of all clients attracted to your distribution network.

To make your work easier, the company and its leaders organize special meetings and group presentations at which successful networkers will tell your friends about all the advantages of this business. Also, you have the opportunity to use special tools: for example, and many other tools. Now we have found out the second task of a networker: to build a network of distributors who will talk about your company’s services and products, and the company will reward them and you with cash payments. This means that you give people the opportunity to earn money by doing what they always do: sharing new information with friends and making recommendations. What's wrong with that?

Education


Own training and training of your newcomers. You will pass on the knowledge that you receive from your mentors to your newcomers. There is nothing simpler: your mentors, information sponsors, periodically conduct various seminars, schools, and trainings. This is where you will invite your newcomers. Today it is very convenient to teach beginners using the Internet. All you have to do is connect to the system and learn from your mentors in real time.

So, the third task of a networker is to learn and transfer this knowledge to your newcomers, because you and your sponsors are interested in the success of any new person. Network marketing is a team environment where everyone supports each other. Success in network marketing is achieved together.

Now you know what a networker does during his workdays. But working in network marketing wouldn’t be so attractive if it only involved everyday work. You deserve much more than routine, banal work, so a whole reward system has been invented specifically to make the networker feel comfortable and enjoy his work.

This means that distributors receive recognition for their work. These include special gifts from a gold badge to an apartment or a car, these are insignia, this is career advancement, this is a trip to different countries, as well as exclusive training from world leaders in this business. In short, the lifestyle of a networker can truly be called a dream, but do not forget that the company rewards conscientious distributors, those who really work. Everything is fair. Reward based on merit.

How long does this business take?

You and I have the right to say that we have little time, that we don’t even have time to do household chores, sometimes it seems to us that we don’t even have time to rest, we don’t have time to do this business. Of course, but if you and I continue to live like this, then time will definitely not increase. Think about it, all people have the same amount of time of day, yet all people achieve different levels of success. Some people can’t tie ends meet, while others manage to do a lot in less time. What's the secret?

This is the huge advantage of a network marketing business. It frees up your time: once you create a working business system or, in other words, a network of regular customers or distributors, you receive royalties regardless of what you are currently doing. This is where free time comes in, but for this to happen, you need to now set aside a couple of hours a day to start building your future.

Many successful networkers started this business, combining it with their work, devoting only a couple of hours a day to it. This is exactly the time we spend in front of the TV, but watching TV will not change your life for the better and will not feed your children.

So maybe it would be better to use this time to create a business that will bring you income in the future, even when you are relaxing or doing what you love? Time is a resource that you can simply spend, and then it, like money, becomes less and less, but it can be wisely invested in creating a working business structure that brings you profit and gives you more free time, because the distribution network you created will grow and multiply and bring you increasing income. This, in turn, will allow you to choose for yourself what is worth devoting more of your time to.

How much money does it take to start a network marketing business?

Someone might say: “I don’t have any money for this at all.” Here you need to understand that starting any business requires money. Another question: “How much?” You and I are used to thinking that organizing a business requires substantial investments, and there are no guarantees that things will work out and that we will be able to get our money back. And this is a true statement, but not for network marketing. One of the advantages of working in network marketing is that you can start it with the money that you probably have.

You do not need to purchase expensive equipment, you do not need to hire staff and pay them salaries, you will not have production, packaging and transportation costs, you will not need to pay for the work of an accountant. The company will do all this for you, and, moreover, completely free of charge; you do not need to invest tens of thousands of dollars in organizing this business.

100-200 dollars is enough to get a turnkey business system + a set of goods or company services for yourself and your family. For example, to start working with Avon you will not need any investment at all.

The benefit is that you cannot go bankrupt in this business. You will never lose the money invested, because already at the first stage you get high-quality goods for your money at a significant discount, which you can either sell and make a profit, or keep for yourself and use them as an ordinary privileged customer. You can no longer be called a deceived investor, but plus you get your mentor and an entire business system that has already made many people in your company successful.

Therefore, there are only two outcomes of this matter, and both are beneficial for you: either your business will begin to develop and bring you increasing income, or you will receive an exclusive product or service of the company at a deep discount and become a privileged customer.

Let's look at this situation from another side: if you were offered to buy a new Audi or Porsche for just a thousand dollars, provided that the money must be paid tomorrow, would you take advantage of this opportunity? Certainly! And a business worth 100-200 dollars will bring you much more than a new car. People who say they don't have money for this business simply failed to see this greatest opportunity in human history and this unique system that has made many people around the world successful and free.

When will I start receiving money and how much?

You need to understand that there are several sources of income in network marketing. We will tell you about two universal ones that are available in any network company that operates legally.

  • The first source is profit from customers who will not want to and will constantly purchase products from you without a discount. You may ask, “Why won’t they want to register? After all, it’s profitable!” Yes, but not everyone understands this. Moreover, the distributor buys products in small wholesale, for example, for $200, and the client may only need to spend $100 to provide himself with products for a month, and today he has no desire to spend more than this amount, although the benefits are obvious. If he spent $200, he would receive a significant discount. This means that there will always be people who will purchase the company’s products at one hundred percent of the cost. This will provide you with a small but fast cash flow. Some distributors earn between $400 and $2,000 per month using this source of income alone.
  • The second source is income from the turnover of the distribution network you have built. This source of income is the most attractive because it gives you the opportunity to earn passive income. The downside is that in the first months of your work you will not see much profit, but the upside is that by creating passive income for yourself, you will free up your time and will receive money no matter what you do. The network is built and lives its own life.

This way your business can become international, since many of your distributors have friends and relatives abroad, and you will be able to say: “I am in international business.” But be prepared for the fact that at first you will have a small profit, but the more people join your team, the faster your income will begin to multiply.

This can be depicted visually: the lake is completely overgrown with lilies in 30 days, every day one lily gives birth to another lily, and if today only a lily grew, tomorrow there will be two of them, the day after tomorrow - 4, then - 8. And here’s what’s interesting : on the 29th day the lake will be overgrown only half and in just one, 30th, day another half of the lake will be overgrown. This is how the distribution network grows, which at the very beginning does not bring much results.

But there will come a time when doubling your network will bring you significant income. Imagine that you can invite just one person per month to this business and teach him to do the same, that is, invite just one person per month to this business. Let's calculate how many people will be in your network in 1 year. First month: you invite one of your friends, now there are two of you. Second month: you invite someone else, and your friend will do the same. Now there are four of you. Third month: all four will invite one at a time, and there will be eight of you. It is easy to calculate that in the fourth month your network will consist of 16 people, in the fifth month - of 32 people, in the sixth - of 64. At this moment, it may seem to us that the network is developing poorly and will not bring in a lot of money, but be patient, because in the seventh month there will already be 128 people in your network.

And this is only if you invite only one person per month. Even if we are lazy, and half of our network is also not active, your network will still consist of two thousand people, even if only half of them buy something, you will receive commissions from 1000 people, which is not bad money. Provided that you will receive $10 from each purchase, your monthly income will be $10,000, even if these people work twice as hard, your income will still be a decent amount. Agree, this is a good increase in your salary!

But I can hear a legitimate question from you: “I don’t have so many friends, where can I get so many people?” This is one of the advantages of a network marketing business. You only need to invite five people into this business, and they, in turn, will bring an entire army, repeating you. This way, your network can grow exponentially. Moreover, it is not necessary to build a network within your city. Having friends and relatives in other cities, your distributors will take this business beyond your place of residence, expanding its borders.

So, if you decide to get into this business, what lies ahead for you?

  • Your environment and personal growth. What does it mean? The fact is that your life largely depends on the people who surround you, and if you are always surrounded by poor or sick people, then most likely you will be the same. Working in network marketing, you will be surrounded by positive people who are determined to succeed, you will be trained by successful people, which means that after some time you will become the same.

Working in network marketing provides you with unlimited passive income. This means that once you complete the job, you will receive income for the rest of your life.

  • This can be compared to running water. You can go to a well every day to fetch water, or you can, after spending 2-3 years, build a water supply system, and the water itself will flow into your home. You will only open the tap when necessary.
  • Recognition and journey. Every network marketing company rewards its distributors not only with money, but also with career opportunities. And the higher your status in the company, the more bonuses and gifts you will receive.

Many companies reward their distributors with new cars or apartments, as well as trips to exotic places on our planet.

  • One of the most attractive benefits of network marketing is freedom.. Freedom from bosses. You won't have a boss, but you will have a mentor interested in your success. Freedom of choice. You will choose who you work with, when and where. Freedom from the alarm clock. You don't have to wake up to an alarm clock at seven o'clock every day. You will plan your own work schedule. Freedom to choose your income. Now no one will be able to limit your income; you yourself will set any level that is comfortable for yourself.

Too good to be true? Yes, we have heard a lot of bad things about this industry, but think about whether a person who does not work in this business can give any advice, is it possible to judge what we do not understand and we can choose who to learn from? and who to listen to: the successful or the poor and sick. All this sounds good, but what are the pitfalls? After all, it can’t be that everything will be fine?

Yes, we must tell you about the disadvantages of this business and the main one is refusals. In ordinary life, we are not used to receiving refusals, but in this business, 8 out of 10 people will say: “No.” It's unpleasant, but you and I understand that these are the people who failed to see the greatest opportunity in this business. They say: "No!" not to you, they say: “No!” themselves, they deprive themselves of a good future, deprive themselves of travel and free life, they say to themselves: “No!” But two out of ten will say: “Yes!” They were able to see in this proposal all the advantages for themselves, for solving their problems. It is with these people that you will achieve success together, using network marketing as the greatest opportunity in the history of mankind, and then everything will be great in your life!

Hello, dear readers of the online financial magazine “RichPro.ru”! The topic of today's material is network marketing (MLM): what it is, which MLM companies in Russia have a high rating, how network business works, and so on.

After all, for many centuries the model of distribution of goods and services “ manufacturerlarge wholesalesmall wholesaleretailbuyer"was the only possible one.

ButV30's years XX century The product distribution system was born in the USA and subsequently developed. manufacturerdistributorbuyer».

At the same time, the activities of MLM companies for many years have been surrounded by various rumors, comparisons with financial pyramids and ambiguous public opinion. Based on this, for an objective look at this type of business, you should consider in more detail all aspects and nuances of network mlm marketing.

So, from this article you will learn:

  • What is MLM - the history of the network business industry;
  • The main advantages and disadvantages of network marketing;
  • Which MLM business network companies are the most popular (ranking by sales volume in the world).

After reading this article, you will decide for yourself whether it is worth engaging in network multi-level marketing, find out which companies are better to choose and why, and read reviews from “experienced” mlm marketers.

What is network marketing and how does it work, what is the basis for the scheme of cooperation with MLM business, which MLM companies have high ratings and much more, read below in the article

Network marketing is a system for selling goods and services from manufacturer to buyer, which is carried out through recommendations from person to person.

The essence of MLM business is in non-store retailing, in which the distributor independently establishes contact, advertises and sells the product to a potential buyer.

In addition to earnings from retail sales, the sales agent offers consumers, for a percentage of sales established by the company, find new buyers , which “attract” new clients under similar conditions. As a result, a multi-level network is formed.

Network Marketing Objectives

  • Product pricing optimization. Before 70% The retail price of everyday goods consists of the costs of the distribution network and advertising. Changing the distribution structure allows you to reduce costs.
  • Providing customers with high-quality, authentic products. With traditional product promotion, there are obvious prerequisites for the appearance of counterfeits on the market, but in the direct sales method they are absent: the product is not as widely known as analogues from the traditional market, the manufacturer, distributor and buyer are not interested in the appearance of counterfeit products.
  • Improving the product delivery system. The manufacturer's control over the logistics and storage of goods allows us to provide the consumer with a product of appropriate quality and in optimal time (read the article at the link).
  • Improving the distribution of profits of the manufacturing company. Reducing costs allows you to direct financial resources to incentive programs for sales agents, various bonuses and incentives, as well as improve product quality.

Below we will consider the principle of network marketing.

2. How network business (marketing) works - the operating principle of MLM companies 🗺

Multi-level marketing is the interaction of a manufacturer, an entrepreneur and a buyer.


How multi-level network marketing works - 3 sides of profitable cooperation with MLM

2.1. Network marketing from an MLM company

The MLM company produces products at its own factories. It also develops a marketing and sales plan, based on which revenue from product sales is distributed.

As a rule, a business plan motivates distributors in several areas:

  • a) consume the products themselves;
  • b) sell goods to customers;
  • c) create a network of entrepreneurs.

Manufacturers organize delivery of products to their own warehouses in different countries and cities, and also ensure that distributors receive the goods at home.

For proper efficiency, entrepreneurs receive all the necessary materials on products, master classes and seminars are held aimed at developing a variety of skills.

2.2. Network marketing from the consumer side

A distinctive feature of the direct sales method is the creation of convenient conditions for the buyer:

  • Delivery. Entrepreneurs, as a rule, deliver goods to their homes.
  • Service. Before purchasing, the buyer receives all the necessary information about the product. Also during operation it is possible to consult with the distributor.
  • Quality guarantees. Most MLM companies guarantee the quality of their products, with the possibility of a full refund if the client is dissatisfied.

2.3. Network Marketing from the Entrepreneur's Side

Multi-level marketing - a very attractive type of activity for people who do not have large initial capital and business experience.

An entrepreneur has the opportunity to independently plan his employment based on his capabilities. Students, housewives and retirees are most involved in this type of business.

Some terms and definitions used in the network marketing business:

Distributor - a sales agent who has an agreement with a direct sales company and receives a remuneration for product sales, as well as a percentage of commissions for the turnover of the network created by this entrepreneur.

Sponsor (partner) of the 1st level – a sales agent who introduced the consumer to the possibilities of this business and helped to conclude an agreement with a network marketing company.

Sponsorship (affiliate) line – a list of entrepreneurs directly interested in the success of the distributor’s activities, which includes a 1st level partner, his sponsor, etc.

Side Entrepreneurs – a set of distributors that do not belong to either the sales agent’s subnetwork or the sponsorship line.

Bottom line partners – a list of agents included in the distributor’s network.

Organization width — a set of partners of the 1st bottom line.

Depth of organization — all agents of the 2nd and subsequent lower lines in the distributor’s subnet.

Active income – monetary reward for work performed by a person. Income depends only on the quantity and quality of labor invested.

Passive income- profit received by a businessman constantly, for one-time work performed. To obtain this income, a prerequisite is the presence of assets, which can be real estate, bank deposits, shares, etc.

8. Advantages and disadvantages of network marketing - an overview of the main disadvantages and advantages of the MLM business 📃

MLM business has a number of advantages and disadvantages. The assessment of this type of activity in the media, among reputable businessmen and politicians varies greatly.

Advantages of MLM business and its advantages

Let's consider the main ones:

  1. Low barrier to entry into the market. When opening any business, an entrepreneur evaluates the resources he needs to start in the market. In a direct sales business, you need little money to start your own business. There are also no costs for renting premises, warehouses and other fixed costs.
  2. Possibility of doing business on the Internet. Since the end of the twentieth century, more and more consumers, manufacturers, and businessmen have been making purchase and sale transactions on the World Wide Web. Doing business online is an undeniable advantage of business.
  3. Product quality. Thanks to the peculiarities of MLM marketing plans, companies have the opportunity to allocate large sums for the production of quality products compared to competitors who use traditional marketing to promote goods.
  4. Training programs. To develop the skills of sales agents, direct sales companies introduce training programs that include books, CDs, seminars and a variety of trainings and presentations. This information allows you to develop not only in sales, but also contributes to personal growth, improvement of family relationships, etc.
  5. Part-time employment. The opportunity to work in your free time and at the same time have income from your main activity.
  6. affiliate program. The sponsorship (affiliate) line is interested in the success of the distributor. More experienced partners support, help and advise newcomers in every possible way. Relationships are built on equal terms, regardless of income.

As you can see, there are significant advantages for which you should start this business. We also suggest you read the article “”, perhaps you will find useful information there.

Disadvantages and disadvantages of network marketing

Let us now consider the main disadvantages:

  1. Reputation. Due to the lack of restrictions and selection of agents, sometimes new entrepreneurs conduct business incompetently: they impose products and the business itself, give false information and thereby compromise this type of activity in every possible way.
  2. High likelihood of deterioration in relationships with friends and family. The majority of the population prefers to work for hire. If you run a business without an office, warehouse or employees, friends and relatives have a negative attitude towards this business.
  3. Slow or no business growth. As a rule, an entrepreneur receives the first significant results within a period of six months to two years, subject to systematic work and training. A very large number of distributors have not been successful in this business.
  4. The vast majority of proposals for cooperation are rejected. With active participation in building a business 80 95% of the work does not bring results.
  5. Only a few entrepreneurs achieve significant success. On the path to success, a sales agent encounters many difficulties, which require perseverance, education and self-improvement to overcome. Not everyone is ready to overcome all possible obstacles.

Above we presented the main disadvantages and disadvantages of cooperation with MLM companies.

9. Rating of network companies in Russia - list of the most popular MLM companies 📑

The first mentions of network marketing in Russia are dated 90s of the twentieth century and are associated with the company " Herbalife" The company's products were rapidly distributed throughout the country. Tempted by the possibilities of new business, thousands of people decided to cooperate with this organization. Expecting quick success many distributors suffered collapse , attributing to the fact that the activities of this company are illegal .

At the same time, many financial pyramids have appeared in our country that have an external resemblance to MLM companies. All this affected the reputation of this type of activity.

Despite these factors, the direct sales business in Russia has grown significantly in the coming decades.

By the beginning of the new millennium, all the global leaders in network marketing were present on the Russian market.

In this table you can consider the most popular network companies in Russia.

No. Company name Brand country Products MLM market share in Russia (%) Global sales volume, $ billion
1. Amway USA Wide range of products: household goods, cosmetics, vitamins, dishes, water filters. 8,1 9,5
2. Avon USA Inexpensive cosmetics for the middle class 28,8 6,16
3. Oriflame Sweden Wide range of products: from cosmetics to dietary foods 27,4 1,35
4. Mary Kay USA Cosmetics 4,9 3,7
5. Faberlic Russia Oxygen cosmetics made from natural ingredients 4,8 no data
6. Herbalife USA A variety of products for balanced nutrition, weight control and appearance care 3,0 4,47

The table shows that the world leader in this industry is the company “ Amway"in Russia it ranks only third in terms of sales.

Corporations have the largest market share " Avon" And " Oriflame».


Is it possible to make money in MLM, what do you need to make money in network marketing?

10. Is it easy to make money in network marketing, and what is needed for this 💰

Due to its advantages, network marketing is a fairly popular activity.

According to the Russian Direct Selling Association based on the results of the last five years 6% population was employed in business based on multi-level marketing.

Distributors' earnings vary significantly, which does not depend on the level of education, profession, number of children, marital status and other factors.

A small percentage of sales agents achieve results quickly and easily. This is because success requires knowledge and experience.

To achieve significant results in business, you should follow the following tips:

A dream is the main factor that allows an entrepreneur to overcome difficulties and achieve success. To maintain motivation, you should “break the path to your dream” into intermediate goals.

A sales agent must realize that the result of his activities depends only on his efforts and dedication to the business.

Tip 3. Learn and develop

Most network marketing companies have training programs. They include business literature, CDs with recordings of speeches by business leaders, and training seminars are also periodically organized.

To be effective, you should write a list of your acquaintances in a notebook and update it periodically.

Tip 5. Present business and product

Based on the list, you should “get in touch” with potential partners or clients. The number of presentations influences the final result.

Tip 6. Consult sponsorship line

It's better to learn from other people's mistakes. Top line partners have more experience and are always ready to help the distributor, as they are personally interested in the success of the entrepreneur.

Tip 7. Build a business based on the developed strategy

A stable, long-term result can be achieved only if there is a balanced development of the “width” and “depth” of the structure.

Tip 8. Repeat the actions and methods of achieving success used by higher-level partners.

It is also worth noting that downline partners also observe the distributor and will repeat his actions.

11. FAQ - answers to frequently asked questions

Before engaging in multi-level marketing, potential distributors have a number of doubts and questions.

Question No. 1. Should a beginner start?

It's worth it, but you shouldn't expect quick success. No risk of being in the red, small initial investments, high-quality educational programs, help from partners - factors that can influence success.

Question No. 2. How to make your first money in network marketing?

When starting cooperation with a “network” company, sales agents strive to do so as quickly as possible. The activity should begin with simple retail sales.

Buying a product at a wholesale price and selling at a retail price - distributor makes money . First of all, products should be offered friends, relatives and acquaintances, since they will be more loyal to an inexperienced seller, and in the future they will be able to become regular consumers or business partners.

Question No. 3. Network Marketing: Is it Legal?

The direct sales business is a legal activity, which is confirmed by the very fact of the existence and development of these companies for decades.

Many illegal structures disguise their activities under the guise of network marketing companies.

Important! The potential client is asked to deposit an initial fee, pay for mandatory training and purchase a minimum quantity of goods. This is accompanied by the absence of receipts and invoices confirming the purchase of products or the provision of services.

Also the consumer should be wary of poor product quality or lack thereof.

Network companies offer good quality products and do not require significant financial investments to open their business.

Question No. 4. What reviews does network marketing have - is it possible to really make money from it?

There are many different reviews about network marketing on the Internet.

Here are some of them:

Review 1."At first 2000s a colleague at work suggested trying the company’s products “ Oriflame" I really liked the product and became a regular customer. A couple of months later, she invited me to become her partner in business and told me how to make money.

At the first stage, I managed to have a fairly large income, but then everything changed. I am raising two children alone, and as my network grew (at that time I had 34 people on my team), it became increasingly difficult for me to combine household chores and business.

As a result, income began to decrease, and at a certain point 12 people “left” my network. Later, I decided to switch to the classic business. In order to have great success in this direction, you need a lot ambition, determination and activity. One girl from my structure achieved great success in " Oriflame" I don’t regret anything, the knowledge and experience gained at that time allow me to now successfully do my business.

Olga, Samara»

Review 2.“In the second year of university, our stream was “swept by the virus” of network marketing. Earning opportunities from " Faberlic» fellow students discussed everywhere. I've never been a fan of sales, but I still decided to give it a try.

Over time, I realized that it’s hard to make money in this business; the bulk of the income from your turnover goes to your higher-ranking partners. To achieve success, you must be able to sell products.

I do not advise anyone to engage in network marketing.

Alina, Rostov»

Review 3." IN 2009 I had to close my own business and ended up owing money to the banks $40,000, of which 2 000 it was necessary to pay every month. I urgently needed to get out of this situation. I was in search of a solution, considering various options for making money.

Unexpectedly, an old friend, whom he had not seen for many years, approached me with an offer to do business in collaboration with the company “ Amway" At the presentation, he told me about the possibility of decent earnings in a year or two. But I was told as quickly as possible that I should focus on personal sales of expensive products that have a significant margin. So I started in business by selling water filters and cookware sets.

I have enough wealthy friends and, to get out of my situation, I had to actively promote the products. During my first year in network marketing, I spent about 2-3 meetings with clients, and on weekends - 6-7. The result was not long in coming - I paid off my debts and, without actively “attracting” partners, achieved 9 – 12 % levels of achievement.

Next, I studied the company’s marketing plan in more detail and began to more actively develop my own network of distributors. I'm currently at the level Platinum Independent Entrepreneur.

I agree that making money in this business is not easy, but if you have the motivation, then anything is possible.

Andrey, Peter»

Question No. 5. How to distinguish network marketing (MLM business) from a financial pyramid?

Most conduct their illegal activities under the guise of direct sales companies.

The table presents the comparative characteristics of these organizations.

Comparison criteria Network marketing Financial Pyramide
1. Initial investment Typically a small initial investment. For this money, the distributor receives “tools” for his activities: catalogs, information about the company, product and detailed description of the business plan. Many companies, with a certain volume of initial purchases, provide these materials for free . Impressive start-up investment from 100 to 6,000 dollars. From this money “bonuses” are paid to higher “agents” of the pyramid.
2.Product All activities are based on the sale of products. The product is of high quality and is in significant demand in the market. The product is unavailable or has little value to consumers.
3.Priorities in the organization's activities Receiving profit from the sale of products and its fair distribution between distributors and the manufacturing company. Attracting new participants and distributing profits from their contributions between higher-level “distributors” and the organizers of the pyramid. The emphasis in activities is on making quick money.
4. Paperwork Registration of depositing money in a legal way: support of purchases with checks, invoices. Drawing up an agreement between the company and the sales agent. Lack of documents or their improper execution.
5.Distributor motivation The business plan is based on promoting the manufacturer’s products to the market and corresponding remuneration for sales agents. The plan only involves attracting new “agents”.

Question No. 6. How to choose an MLM company to start?

Beginners who consider the direct sales business to be a suitable activity are faced with the question of choosing an organization for cooperation.

For an optimal solution, a number of aspects should be taken into account:

  • Reputation and age of the company. It is better to choose an organization with a good reputation and significant experience in this field.
  • Products. The basis of any trade is the product. Its quality will directly affect the result. It is also worth paying attention to the features of the product. It is important that it ends after some time, and clients turn to the sales agent again. The diversity of the product range is also a significant factor when choosing a company.
  • Tutorial. The education system has a significant impact on business success.
  • Availability of the company's business on the Internet. Not being online significantly reduces opportunities for business growth.
  • Business plan. It is important to evaluate the company's marketing and sales plan against the criterion of fair distribution of the organization's profits. You should also find out if there are restrictions. The best type of business plan is " multi-stage plan with compartment».

Question No. 7. I want to try myself in network marketing at Oriflame, Faberlic, Amway - what do I need for this?

In order to become a distributor of direct sales companies, it is necessary to draw up a cooperation agreement with this organization; the age of the applicant must be at least 18 years old.

To register an agreement, it is necessary for the newcomer to have a sponsor who will help prepare the documents.

12. Conclusion + video on the topic 🎥

In recent decades, various methods of product promotion have been rapidly developing in Russia, one of which is network marketing. Despite its controversial reputation, this method of trading has become convenient and popular among customers.

Possessing thorough information about what constitutes direct sales business , the consumer can make the best decision about its use - to access quality goods that are not available in retail stores, receive additional income or develop their own online business with the prospect of significant income.

In conclusion, we also suggest watching an interesting video about online business:

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 partners of network companies.

Yes, I agree that completely different people come to MLM. 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 if you do the right things, you will definitely have it!

By the way, if you like the article, be sure to subscribe to mine. There I share my experience, and also post announcements of my articles and new videos on the topic.

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 In contact with. 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: 33 comments

  1. Love

    Alexey, interesting article, in business, as in any job, you must first of all study and implement the acquired knowledge

  2. 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.

  3. Natalya Dryaba

    Thank you very much for the articles! I read it avidly, very useful and interesting!

  4. 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.

  5. Anonymous

    And in my opinion this is nonsense.

  6. 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 network 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

  7. 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 among the 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 being sold 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 on social networks or 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 do network marketing) Understand correctly, I’m not saying that network marketing is the most ideal and best way to 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

  8. Anonymous

    But here I just stated my opinion. It’s 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. A much more effective way is to be a good specialist in some 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 something doesn’t suit you, for example, the salary, unless of course you yourself are a good specialist who will be happy to be hired anywhere, but for this, during your 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.

  9. Anonymous

    And yes, from observations, the majority of networkers earn absolutely nothing, a few receive 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 as if they were doing 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 they will have nothing to do with their pension if they work in a network business all their life.

  10. 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.

  11. 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 a large number of people simply use the products (and, mind you, they don’t buy tons, but simply use them). Everyone buys 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.
        And yes, if you claim that not only networkers buy goods, then how does this fit in with your statement that you do not make sales, some kind of contradiction emerges. 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 at the expense of an ever-increasing number of 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 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 (since the expensive ones will not be in great demand), then the profit is simply not distributed evenly among all networkers, and according to the hierarchy, the top gets 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 the products of 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.

      5. Ivan

        Quote: “Most of the people who go into network marketing are people with little education 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.”
        Really a myth.
        I am a person with a higher legal education, a law enforcement retiree, a corporate trainer and a Gazprom specialist, I believe that this is a unique business in which you can earn an unlimited amount of money, expand your social circle, communicate with successful and interesting people, improve yourself, get rid of complexes, organize your own workflow and the list goes on.
        EVERYTHING DEPENDS ON YOU!

        I know many entrepreneurs, top managers of large companies, hiring specialists who have achieved success in their professional activities, who are engaged in this type of business.
        This is one of the most viable and promising forms of marketing and doing business.
        Please note that more and more modern companies are starting to distribute their products in this way. Many IT products are sold through an affiliate network.
        This is beneficial to the company since it does not need to spend money on hiring an office, personnel, logistics, etc. (as in direct sales).