MLM network business. Beware, Network Marketing

More and more people are getting involved. Network marketing has reached its greatest heights in Russia. The rating of companies in 2018-2019 clearly shows the development trend of such enterprises. But they decide to cooperate with them only indirectly, still considering such work as just another pyramid. Is this opinion justified?

We will try to understand all this in this article, with clear examples and facts.

The way network marketing works is quite simple. There is a company that produces a certain type of goods or receives wholesale products that need to be sold.

To distribute your product, you need employees - distributors who find potential buyers, conduct advertising (usually, they clearly talk about the functional features of the product) and take orders on the spot. They are found using a referral system - a chain where one employee offers profitable cooperation to others, and they, in turn, offer others.

The salary of a sales consultant depends on the share received from the sale of goods. The company receives benefits due to the retail cost of products, which exceeds store prices, but in this case no funds are spent on advertising or wages for sellers (rate). The distributor chooses his own level of earnings by selling the product.

What does such an employee need:

1. A proven company that brings real earnings.
2. The client base from which the percentage will go.
3. Ability to persuade and present a product.
4. The desire to develop, since in the initial stages it will be quite difficult to stabilize earnings.

An additional incentive for the distributor is to receive a fixed income from involving other people in the business. Such a referral system allows you to receive a percentage not only from your sales, but also from the income of the invited employee.

Many people compare this kind of income to a financial pyramid. But there are some differences:

sales consultants do not pay the upfront fees that are required in a financial pyramid for dubious documents and agreements.

In this case, real goods are sold at inflated, but profitable prices for the population. This business operates legally and does not contradict the laws.

Where to start a network marketing business?

When choosing a job in the field of network marketing, an important aspect is a convenient marketing plan. Everyone chooses an option according to their needs. There are a large number of franchises for remote earnings on the domestic market: (cosmetic, tourism, legal).

The very first company related to marketing was Mary Kay, which began its distribution more than two hundred years ago.

Initially, the cosmetics company worked offline: it created trainings, brought in distributors as part of a bonus program, and sold its products in different cities and countries.

But she was not one of the first to start working online. This was the first step in the development of such a business, and other brands began to emulate Mary Kay.

Other companies are also actively promoting their products on the World Wide Web - Avon, Faberlic, Oriflame, NL And Amway. At the moment, they occupy a leading position in the ranking of successful network companies in Russia.

How to find the perfect network marketing business to work with?

Beginners should get used to this business by attending various trainings and consultations with more experienced workers. Many companies create a step-by-step training system that allows everyone to move up the career ladder. In addition, MLM organizations provide training material and video lessons in the first stages of training and work.

Brand

To check the reliability of the company, you can opt for start-up companies or give preference to already established franchises. , which is just at the origins, can only recommend itself, develop, develop a client base in order to get easy money.

But to promote a brand, you need to work on the name, distribution and advertising of products. Since people do not yet have an idea about the new product.
A reputable, already proven company also has its positive sides.

The product has already been promoted and is being sold in great demand. If the company has confirmed its name, then it will not close in the coming years. Among the disadvantages are the requirements for applicants to become distributors.

Product quality

What commercial network companies produce must be of high quality and environmentally friendly. Since this type of business spreads like word of mouth, any dissatisfied customer can spoil the impression of it.

In addition, there are other criteria for evaluating products:

Limited shelf life. This is necessary to ensure constant demand. If the product has a shelf life of more than a year, then the distributor will practically not be able to find an interested client.

Therefore, cosmetics, chemicals, perfumes, personal hygiene products, and household goods are considered ideal distribution options.

TOP 5 successful network marketing companies in Russia 2018-2019

Oriflame

In addition to cosmetics, there is a Wellness line that guarantees health.

To receive a salary or a good discount, a consultant must achieve a turnover of at least 6 thousand rubles. A 20% discount is given at the first stage.

If the consultant reaches these 6 thousand, then the income from his structure is automatically calculated and submitted; when the next catalog is released, 12% is returned for the personal order of the employee.

From this we can conclude that a person who is going to build his own marketing business receives a total discount of 32% upon achieving turnover.

Interesting fact. The company has five factories and a leather research institute. Scientific works are constantly published on the official website, and there are personally patented formulas.

You can join the Oriflame team right now. By going to link, you leave a request and an experienced, competent specialist will give you detailed instructions on cooperation with the company. In addition to this, you can count on round-the-clock help, support and free training.

The advantages of modern network marketing are that you don’t have to leave home to build your own successful network business. Almost all work processes take place in the virtual space.

Avon

The marketing company began its work in 2004. And since 2010, it has been actively integrated into the network. To register as a coordinator and gain the opportunity to invite people as referrals and build a business independently, copies of documents are sent to the company on the official website, after which registration is carried out.

As an advantage, we can name the minimum purchase prices from 1.6 thousand rubles, since cosmetics are available to 95% of the population. Avon guarantees a bonus program of 125 thousand rubles. But it is possible to obtain it if the coordinator recruits 5 new active workers in the first line of the catalog throughout the year.

The company has certain plans and turnover, failure to fulfill which may result in the loss of the opportunity to obtain qualifications. The company gives a discount on each product.

If an employee orders products for himself, the discount is 15%; if the plan is fulfilled, the bonus reaches 32%. From this we can conclude that if an employee does not fulfill the plan regarding recruits, then he must independently fulfill the sales plan regarding them.

How to develop your network team

1. Blogs. Before you start blogging on Instagram or other social networks, you need to develop a client base.
2. Sending letters advertising products.
3. Providing discounts and assistance with advice on the city’s website.

To receive your first income, you do not need to register an individual business; wages are transferred to the card. The company rarely conducts training at the all-Russian level.

There is a company office in every city where you can contact for advice. The first line of recruiting has an almost endless plan. If the plan is not implemented, the company has the right to terminate the contract with the employee. There is no international sponsorship.

Faberlic

The company has been operating in the marketing market for about 20 years. The company began its operations in Russia, which consultants keep reminding us about. Faberlic pays a bonus amount after an employee reaches a certain rank - Director.

The bonus of 55,000 rubles is paid after the completion of this title. Mandatory turnover is to achieve 50 points with the calculation that 1 = 80 rubles. The mandatory purchase must be 4000 rubles. The director reaches a turnover of 400,000 rubles.

The company contains a plan for recruiting the first line. Any Director level has a gap. If the consultant has 2 closed directors in the first line, then to generate income, there must be an additional growing group with a turnover of 1000 points.

If the Super-Director does not have a personal group, then he is not given a salary for this catalog line. This means that passive income is impossible in this case. If the plans are not fulfilled, the cosmetics company may terminate the contract with the employee. There is the possibility of traveling abroad.

NL

Individual entrepreneurship, which is registered in the Russian Federation. The company's products are Energy Diet - expensive but high-quality dietary food products.

One of the few companies that cooperates with equally well-known marketing franchises, for example, Oriflame. Therefore, beginners have the opportunity to get advice regarding food and cosmetics.

To receive a salary, there must be a turnover of 21 thousand rubles during the period. The company is quite profitable, despite its narrow focus and high cost.

Amway

The business of this network company operating in Russia in 2018-2019 was built on the sale of household chemicals and washing powders. There are negative sides. The newcomer pays a small fee to enter into an agreement with Amway.

The product is expensive and has a fairly long shelf life. Commodity turnover in exchange is 10 thousand rubles. Some household products are consumed quickly, which allows them to find a sufficient number of buyers. Selling household chemicals on the Internet is practiced. To do this, they show the capabilities of a particular product online.

Conclusion

Successful Russian network companies are based on a certain established professional organization that is well-established in practice, which is capable of building a stable system to ensure the profitability of personal investment.

New employees should prepare for a slow, but promising outcome, since significant amounts in the first months are almost impossible to obtain. This is especially true for large companies where there is a lot of competition. Therefore, experience is needed in this matter and it is recommended to start with a small company, smoothly moving to global markets.

1. Anatoly
2. Evgeniy
3. Alexander
4. Lyudmila
5. Sergey
6. Danir
7. Alexey
8. Irina
9. Sergey
10. Olga
11. Karina
12. Olga
13. Anna
14. Arthur FLP
15. Anna
16. Victoria
17. Natalia
18. Sadia
19. Irina
20. Vladimir
21. Waist
22. Natalia
23. Catherine
24. Milan
25. Tatiana
26. Rufina
27. Michael
28. Svetlana
29. Svetlana
30. Olga
31. LANA
32. Boris
33. Oleg
34. Kate
35. Andrey
36. Valentina
37. Nelly
38. Mary

Irina Davydova

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The term “network marketing” implies the distribution of goods or services with the help of a well-developed and extensive network of distributors (approx. - independent representatives of a particular company).

Is SM (network marketing) a “pyramid”? , what are its pros/cons, and how does this system work?

How network marketing works - its pros and cons

What is the essence and how does network marketing work?

The point is simple: a person sells goods and invites other people to a similar position, from whose sales he receives interest. The more sellers he brings, the higher his earnings. Thus, a large network of sellers working for one organization is built.

The operating scheme of most network companies is usually the same (with minor differences in individual companies).

• During the interview you are told about job prospects. and “huge” opportunities (usually the opportunities are overestimated or greatly exaggerated). For example, about a solid income in the first six months of work.
• After registering, you may be asked to make a membership fee . It is worth noting that reputable network companies use exclusively legal schemes and do not require any contributions.
• Next, you look for and recruit new sellers , which are already registered through you. This is the main feature of SM.
• Profit (the difference between purchases and sales) comes to you after the sale of goods, which, as a rule, you have to buy with your own money. The profit also comes as a percentage of the sales of the people you recruit.

Network Marketing - Benefits

1. Saving money on advertising. The products of a network company are advertised mostly through word of mouth - direct contact between sellers and buyers. By saving on advertising, the market price of products is reduced and the distributor's income increases.
2. Purchasing effective and high-quality products , not available in regular stores.
3. Possibility of part-time or full-time work with a good income.
4. Free work schedule.
5. The amount of earnings depends directly on the time invested , human abilities and desire for high incomes.
6. Opportunity for your own business. True, not immediately, but after you recruit people, train them and develop your own recruitment system. And, of course, it won’t be possible without investments. The only question is their size.
7. Help from professionals. As a rule, in every network company, along with the products, a person also receives a personal “guru” who helps, trains, and mentors him.
8. No age restrictions. It doesn’t matter whether you’ve just turned 18 or are retired—everyone can earn money.
9. No college diploma required . Instead, you will need qualities such as communication skills, ingenuity, etc.
10. Availability of a “promotion” system (career growth).
11. No need

Network marketing - disadvantages:

1. Instability of earnings. Especially at first, when the work will resemble a part-time job.
2. Material investments. It's inevitable. Even if they tell you the opposite, when accepting you into the ranks of the SM. The amount of investment will depend on the situation, company, product. Plus: the investment always pays off.
3. Selling products is not as easy as you initially think. Until you find your way to effective sales, you will experience a lot of negative emotions.
4. Not everyone will be successful. This point follows from the previous one. Much depends on your capabilities, abilities, experience, and learning ability. Someone will become successful, someone will leave this opportunity for a part-time job, and someone will leave altogether, muttering through clenched teeth: “You won’t earn anything here.”
5. You will work in the business, but you will not own it. Why? But because the products you sell do not belong to you. You will not be able to sell it as your own - for this you will have to develop your own product and open production.

Interesting job or financial pyramid?

Should you be afraid of working in a network company? What are the differences between SM and financial pyramids?

It is worth noting that SM has nothing in common with the notorious “pyramids”. The reputation of SM was considerably damaged, “thanks” to scammers who successfully disguised their companies as network ones.

How to distinguish a network company from a financial pyramid?

Signs of a “pyramid”:

• The idea is to attract a large number of people to collect as much money as possible into the pyramid and disappear.
• You make a profit for each person you invite who brings money to the pyramid.
• The company's product (service) cannot be sold on the open market.
• Consumers of products (services) are distributors only.
• It won’t be possible without investing your own money. The size depends on the scale of the pyramid. Moreover, with your own money you are not buying a real and high-quality product, but dummies that, at best, simply do not cause harm. And in most cases, you give your hard-earned money for “membership fees” or some “papers” that have value exclusively within the pyramid.
• Absence of any printed materials.
• By investing money in a pyramid, you only receive promises that “very soon” you will become rich, rich.
• In the pyramid they teach you to lie.

Signs of a legitimate network company:

• The idea is to attract a large number of people to grow the company and increase the earnings of distributors.
• You receive a percentage of the sales of people you invite to work.
• The company's products can be freely sold on the open market.
• Consumers of the products are ordinary buyers and distributors themselves.
• Investment is only for goods that you buy and then sell.
• Printed materials are usually present. At a minimum, product catalogs.
• By investing in SM, you receive a quality product and interest on sales.
• In SM they teach how to sell.

The most popular examples of businesses built using network marketing

The first of the first in SM were companies that appeared back in the 30s of the last century. They were engaged in nutritional supplements and sold only one product.

The most successful company in SM was the one that started in 1959 AMWAY. It was one of the first to go beyond the boundaries of selling the “1st product”, expanding the range of nutritional supplements with household goods.

Traditionally, on the first Sunday of December in Russia, Networker Day is celebrated - a holiday for everyone involved in network marketing and direct sales. On this occasion, we decided to recall the most famous MLM companies and understand whether multi-level marketing is a serious competitor to retail.

Not a weak link

Multilevel marketing (MLM) is one of the direct sales methods. With it, the sale of goods is carried out through a network of independent agents, each of whom can not only sell the company’s products, but also attract partners for this. In this case, his income will consist of his own income and a percentage of the income of the people he hires. Another name for the system is Network Marketing, which translates as “network marketing”.

Profits from direct sales for distributors are quite low. They give most of the proceeds to the company and the distributors above them. The main profit comes from sales of sponsored distributors.

MLM companies are often confused with “financial pyramids” such as MMM or Khoper Invest. Indeed, “pyramids” took the principle of network marketing as a basis.
Participants who stand at their origins receive money from the contributions of “newcomers”. But, unlike network companies, “pyramids” do not offer specific goods, but essentially trade in air. The life cycle of “financial pyramids”, as a rule, is no more than several years - they exist only as long as new investors appear. While large MLM companies have been successfully operating for decades, they bring small but stable incomes to the lower levels, and billions to those who are at the origins.

Explorer Carl Rehnborg

The history of the creation of MLM companies is associated with the name of entrepreneur Karl Rehnborg. In 1927, he opened a small company selling food additives of his own production. At first, Rehnborg sold the products to acquaintances, and they, in turn, shared rave reviews with their friends.

And there were those willing. In 1934, Carl Rehnborg founded California Vitamins, which was later renamed Nutrilite Products. Very quickly the company achieved a turnover of several million dollars without spending a single cent on advertising - only through direct sales.

To this day, the most popular products sold through MLM marketing remain nutritional supplements and cosmetics.

AMWAY

Amway (American Way of Life) was founded in 1959 by Nutrilite Products employees Richard DeVos and Jay Van Endel. They decided to slightly change the operating principles that Nutrilite used. Firstly, Amway began to sell different groups of products. In addition to dietary supplements, the assortment now includes many household chemicals and cosmetics. The company now offers over 3,000 items. Secondly, DeVos and Van Endel introduced a multi-level marketing plan for employees and began to pay remuneration not only from personally recruited distributors, but also for sales volumes of agents at all levels. This led to Amway's rapid growth.

Now the company's turnover is over $8 billion, and it ranks 25th among the largest private companies in the United States according to Forbes. True, the history of Amway is not cloudless. More than once she became a participant in scandals. Thus, one of the company’s former top distributors, Eric Scheibeler, who was personally acquainted with the founders of Amway, in his book “Merchants of Deception” accused the corporation of fraud and called it a totalitarian sect. This is not the first time Amway members have been accused of sectarianism. The company's training methods have been criticized more than once.

AVON PRODUCTS

The “long-liver” among MLM companies dates back to 1886 with a small company called California Perfume. It was created by American David McConnell. Initially, the company's assortment included only 5 types of simple perfumes with floral aromas. Now AVON offers hundreds of items of cosmetics, perfumes, jewelry and accessories. The company's turnover is about $10 billion a year, and the number of distributors around the world is in the millions.

Why McConnell is not considered a pioneer in the creation of MLM enterprises - history is silent. Perhaps the fact is that although the company used the principle of direct sales from the beginning of its existence, it did not immediately come to a multi-level scheme. But AVON has gone down in history by being the first of the cosmetic giants to abandon testing of products on animals.

MARY KAY

Another American corporation. Created in 1963 by Mary Kay Ash and named after the founder. Offers hygiene products, cosmetics and perfumes in the mid-price segment. In 6th place in the world among companies engaged in direct sales according to 2012 data.

The trick of Mary Kay is that its consultants do not just sell products, but act as “beauty consultants.” That is, they undergo basic training in skin care. The second feature is that territories are not assigned to a specific consultant: they can hire their agents anywhere in the world.

Like Avon, Mary Kay stopped testing its products on animals in the early 90s, but resumed testing in 2010. For which she was severely criticized by the “greens”.

ORIFLAME

The Swedish cosmetics company Oriflame was founded in 1967 by brothers Jonas and Robert af Jochnick. In the early years, only one line of products was sold, but now the range includes about 1,000 items of cosmetics and perfumes. The annual turnover is about 2 billion dollars, the number of consultants in the world is over 3 million people.

Oriflame positions itself as an environmentally friendly company and even prints its catalogs on paper made from artificially planted forests. Therefore, Greenpeace does not attack the company much. But she came to the attention of the tax authorities. In August of this year, the Russian representative office of Oriflame failed to pay taxes for several million rubles.

FABERLIC

The first Russian MLM company was created in 1997 by entrepreneurs Alexander Davankov and Alexey Nechaev. The original name was “Russian Line”, the Faberlic brand was registered in 2001. The company currently operates in 20 countries, including Poland, Germany, Romania and Hungary.

The company considers its know-how to be “oxygen cosmetics” - face and body care products based on perfluorocarbons. Faberlic's turnover is now over 250 million dollars a year.

KIRBY

The company producing and selling vacuum cleaners is celebrating its 100th anniversary this year. It was founded in 1914 and is named after the developer of the first vacuum cleaner models, Jim Kirby. The company’s “trick” is that at a certain period it sells only one model of vacuum cleaners. Once a model becomes obsolete, it is discontinued and a new one is sold.

Kirby is the most scandalous representative of the MLM diaspora. Every year, US consumer protection agencies receive dozens of complaints about improper actions of the company's distributors. Allegedly, they use harsh psychological pressure to force the client to pay money for expensive equipment (for reference, the price of a Kirby vacuum cleaner starts from 100 thousand rubles). Russian forums are also full of messages: “Kirby vacuum cleaners are a deception, a scam, a scam!” However, the company continues to operate in Russia and in 70 other countries.

HERBALIFE

Founded in 1980 in the USA, it offers products for weight loss, healthy eating and skin care. The international division of Herbalife is now led by former Disney CEO Michael O. Johnson, and scientific developments in the field of skin care are led by Paolo Giacomoni, who previously worked at Estee Lauder and L’Oreal.

Herbalife is the first American MLM company to open a representative office in Russia. This happened in the early 90s and coincided with the emergence of a huge number of financial pyramids in Russia. Therefore, many still mistakenly classify HERBALIFE among them.

The debate about whether MLM business is good or bad continues to this day. Some praise multi-level structures, seeing in them opportunities for quick money, others condemn the very principle of building pyramids. Business analysts also disagree. Some predict that direct sales will soon supplant traditional retail, while others believe that retail and e-commerce will eventually kill MLM. However, network marketing has been around for decades and is not going down yet.

Alena Yarkova almost got caught online
Illustrations by Dmitry Shevchuk

A detailed article about what network marketing is, what the three letters “MLM” mean, what advantages and disadvantages such a business has, how to make money from it, recruit distributors, why this type of activity is dangerous and why you should not become part of a “pyramid”.

The network marketing journey began in 1945. Its foundations and principles were laid in America by two entrepreneurs, William Casselbury and Lee Mitenger. A similar field of activity came to Russia and the CIS in 1990. Since then, millions of people have been doing it and new network companies are opening.

Despite the fact that this type of business is widespread, many do not fully understand what network marketing is, what advantages and disadvantages it has, and why it is dangerous. This is exactly what will be discussed below.

What is network marketing and what does the abbreviation MLM stand for?

Network marketing is a type of business that is built on selling various products and attracting sellers. The seller of the product receives income from each attracted seller. The seller, in turn, attracts new sellers and already has his own percentage of profit from them.

If you look at the entire structure of such a business, it will have the shape of a pyramid. And the one who is at the top earns the most.

The abbreviation MLM stands for Multi Level Marketing, which means multi-level marketing. In common parlance this is called a “pyramid”.

Network marketing most often uses products that cannot be found in regular stores. These could be dietary supplements, kitchen utensils, cosmetics, etc. A striking example of this is the famous Oriflame or Faberlic - products of these brands cannot be found on store shelves. Moreover, 90% of goods are produced outside the CIS.

At first glance, network marketing may seem like a fairly simple way to make money. Yes, some millionaires and billionaires claim that it was through MLM that they made their fortunes. However, most people, not only in Russia and the CIS, but also in the world, avoid this dubious activity. And there are reasons for this. But we will talk about them below. To begin with, it is better to consider all the positive and negative aspects of network marketing.

The light and dark side of network marketing

It's first worth demonstrating the benefits of network marketing to understand why it still exists.

Benefits of MLM

1. Anyone can get into network marketing. This does not require experience, special education, registration of business activities and other points necessary for a traditional business.
2. Network marketing can become an additional source of income - small, but still. This is a good option for students or mothers on maternity leave.
3. The unlimited earnings that people at the top of the “pyramid” talk about really exist. But few people, even just a few, can earn good money through network marketing. To earn decent money, you need to be a purposeful person who knows how to approach people, and have a lot of free time in your stash.
4. Financial freedom is also present here. It lies in the fact that the seller has no bosses, and profit depends only on himself. Freedom also means the absence of a work schedule - you can work whenever you want. However, financial freedom should not be taken literally. Rather, it consists of not depending on the wallet of your parents, relatives or husband. And this does not guarantee a complete absence of money problems.
5. Network marketing gives you the opportunity to try yourself as an entrepreneur and open your own business, which you need to promote yourself. Here you can gain several useful skills, such as, for example, the ability to communicate with different people and establish business relationships with them. In the future, if you manage to create a truly profitable business in another area, then all the skills acquired in MLM will come in handy.
6. Team unity is the only advantage of network marketing. Indeed, the team of network companies is friendly and responsive. Each new member of this team is assigned a teacher who willingly helps the newcomer (naturally for his own benefit). Network companies regularly conduct various master classes, seminars and trainings, which again brings together people who are passionate about one thing.

All of these benefits are present in network marketing, but some of them should not be taken literally, such as financial freedom. You definitely shouldn’t expect yachts, villas, expensive cars and living abroad in a penthouse.

Now about the dark side of the “pyramid”.

Network Marketing Pitfalls

1. Lack of stability is one of the main disadvantages of MLM. It is expressed in the volatility of income. Such an occupation can become a source of income, but not a permanent field of activity. Although, again, motivated people are still capable of achieving good results. But this will require spending a lot of time, money and effort, which can be invested in the implementation of more.
2. There is a very high psychological burden in MLM. Most people approached by sellers react negatively to blatant “selling” of something. Clients have a particularly negative attitude towards intrusiveness. Therefore, sellers of network companies often encounter inadequate people. Moral difficulties also arise due to the fact that after some time the seller himself will teach someone how to sell, and here iron endurance is needed, since there are people who quickly grasp everything, and there are those who are not inclined to quickly absorb all the information and apply it correctly in practice.
3. No matter what mentors say, network marketing requires financial investments from a beginner. He must buy a product with his own money, and then sell it at other prices with a percentage of it. Accordingly, there is a risk of losing money. That is, a person bought a product, but no one bought it from him, and he doesn’t need it either. Financial losses can be from 1,000 rubles. up to more than 50,000 rub.
4. In network marketing there is responsibility for others. If the seller has brought a person into the team, then he is responsible for him, is obliged to help him and solve any work issues. But not everyone is capable of being a mentor and being responsible for someone.

These are not all the pitfalls of MLM. After all, there are a number of risks due to which most people do not want to join the ranks of network companies. But more on that later.

Now it’s worth considering in detail how to make money. That is, how and how people make money in network marketing.

How to make money from network marketing: the principle of building a business

The whole point of building a business in network marketing is to create a network of distributors (sellers) of goods. And the more of them there are in the pyramid, the better.

For example, a person started working in a network company. He was attracted to it by a specific person who assigned him as a mentor. A person is taught everything he needs to know, he buys a product and begins to sell it. At the same time, he is in parallel looking for new distributors whom he will train and receive his percentage and additional bonuses (incentives) from them.

Attracting new sellers is quite easy. The person is properly “processed”, told about his prospects, how much he can earn, and about the fact that he will have huge discounts on all goods and is entitled to free gifts. That is, they begin to flavor a person with a bright future, their own dignity, and additionally play on the simple human feeling of greed.

Future sellers are sold not only the product itself, but also images of a bright and rich future. With the help of such techniques, gullible and impressive people are drawn into the “net”. That is, there is also a share of psychology in this business.

From the above methods of attracting new participants to the “pyramid”, it becomes clear why the common people call network marketing a sect. There are some significant similarities here.

In principle, it is extremely difficult to call MLM a business, in the usual sense. Since everything here is based on deception and illusions. Only those who sit at the very top of the main pyramid make money in network marketing, while those at the bottom work hard and do not receive the promised wealth.

The main task of network companies is to sell their products or goods quickly and in large quantities. And they are not at all interested in how this will happen. Only distributors are interested here - the more you sell and attract, the more you earn.

Everyone can judge the honesty of such a “business” or income for themselves. But a number of facts that are not in favor of network marketing remain undeniable.

Now the time has come to consider all the existing risks and dangers that “pyramids” conceal.

Why is network marketing dangerous?

Scientists have long conducted a number of studies that prove that network marketing is no different from a totalitarian sect. They recruit into MLM just like they recruit into a sect. The potential seller is skillfully brainwashed. Moreover, according to a specific technique, which provides for a certain fetish of one’s own chosenness, missionary work (just like in a sect), elitism and significance.

After a person has been “caressed,” they begin to tell him about a carefree future and complete financial independence. Don’t forget to mention the “freebies” that a person is regularly entitled to. All this is fed into the brain of the potential distributor in the right portions, and in the end they simply put pressure on him so that it is no longer possible to refuse the “tempting” offer.

Seminars of network companies are a completely different story. They are attended by ever-smiling people who are happy with everything around them and dreaming of the immense wealth that MLM will bring them. And speakers at seminars only fuel these feelings in people.

The newcomer has been recruited, now he needs to sell the goods. Naturally, the newcomer agrees and pays for his first wholesale purchase in the hope of quick sales and easy money. But as a result, everything turns out to be not so simple. Not as the “teacher” promised.

Naturally, the newly minted “networker” is surrounded by sensible people - relatives and friends. They begin to explain to him that this is not a business, but only a deception and he will not earn anything from this. And this is where quarrels and loss of friends begin. A person is left practically alone with his “correct” opinion.

Regardless of the success of sales, a person begins to invest money in his business - buy new goods. At the same time, he drags himself into debt.

The danger of making money like this is that beginners with a foggy brain are unable to think clearly. For example, they do not understand that before entering any market, they need to analyze it and understand whether the proposed product is needed by consumers at all. And if the market does not need this product, then it is extremely difficult to sell it.

As a result, it turns out that the money is spent, the goods are lying around and no one needs them, there are already debts, but there is nothing to pay them off with, since no one will return the money for goods purchased in bulk.

Moreover, even if the product is more or less sold, such an activity is an illegal business activity. And at one fine moment a person comes to the attention of the tax inspectorate. The result is punishment with serious fines. Moreover, you can now get a real sentence for tax evasion.

And, of course, the main danger of network marketing is that it sucks people into a swamp. Then it is extremely difficult to get out of it.

From the above information, it is clear that MLM is indeed dangerous. It is difficult to make money on it, but it is easy to lose money. Network marketing is truly a cult, but not in the traditional way.

In conclusion, it is worth drawing some conclusions.

You can really make money with network marketing. But how big is this income? You can’t call MLM a business – it’s more like a side hustle. It is a fact that such a field of activity is dangerous. Whether it is worth trying yourself in such a “pyramid” is not advisable, but this is a personal matter for everyone.

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

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

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

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

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

Our hair stands on end from such rules in companies.

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

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

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

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

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

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

Myths about network marketing

Only the top make money

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

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

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

This is a business for beggars

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

Yes, I agree that 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!

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

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

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

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

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

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

And see you soon in new articles!

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About network marketing - Myths and reality: 31 comments

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 of famous network businessmen who achieved wealth in this way? Here I will answer you myself - not a single one, because... this is a sham. You networkers like to say a lot that it’s great not to work for an uncle, but for yourself, although in the end you yourself sell some uncle’s goods and in fact there is no difference in this moment. But in a normal job, you have a guaranteed monthly salary, as well as an employment contract with paid vacation, sick leave and, ultimately, pensionable service, etc.
   Network marketing is legal, but it's risky and you can get burned. It’s good if the product you are selling does not need to be purchased in advance, but a demonstrative sample is given, and if you can only sell it by purchasing it yourself, then the situation will be aggravated by the fact that not only you may not earn or earn 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 is clear that this will not change your position and you are unlikely to give up network marketing because of my words, because and you know what he is. If you personally have managed to achieve high income through network marketing, well done. But exceptions only prove the rule. This is not a reliable way to make a good living. 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 jobs 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 you need to really study during your student years, 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. 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.

          Natalia

          Write interestingly😂👍Indeed, people are simply too lazy to understand the intricacies of network marketing; it is much easier to call it a pyramid and a scam. Success depends not only on the right company, but also on the person you came to join the team.