The pros and cons of marketing briefly. Network Marketing - Pros and Cons. Negative sides of network marketing

Network marketing or, as it is also called, MLM (multi level marketing) is one of the principles of the sale of goods and services, which works by attracting people called independent distributors and who, in addition to the possibility of selling products, have the right to recruit their own "employees" - precisely because of this point, the network business is often mistaken for various fraudulent schemes or financial pyramids, but, upon closer examination, everything turns out to be far from the case. The income of each participant is calculated according to the formula: commission% for sales + bonuses from the volume of services sold by the agents you attracted. The largest companies such as Avon, Faberlic, Oriflame, selling their goods through MLM, have an annual turnover of several billion dollars.

In this article, I want to analyze in detail all the advantages and disadvantages of MLM business, based on its advantages over other types of earnings on the Internet. After all, as rightly noted great philosopher Friedrich Nietzsche - "Everything is known in comparison." So let's get started.

Comparison with wage labor

pros

There is no fixed working day, only you decide how much time you are willing to devote to work. At any time, you can take yourself a day off or go on an unplanned vacation. At the same time, you need to understand that income directly depends on the effort spent.
There are no restrictions on career growth and wages.
Activities in multi-level marketing will allow you to spend more time with your family, to establish common interests, because even your relatives and friends who have reached a conscious age can earn money in MLM.
You don't have to quit your main job, because it can easily be combined with network marketing, until, of course, you decide to do MLM to the fullest.

Minuses

When you work for hire, you get guaranteed labor contract rate, and the employer takes over the organization of various vital issues, so you just have to focus on fulfilling your duties provided for by the position. The networker, like the owners of his own business, pays for the wrong decisions taken and rash actions with their profits.
In addition to the obvious advantages and disadvantages, there are also very controversial points, for example, the inability to predict the expected income can be both a plus - for a successful networker, and a minus - for a beginner or a person who does not have the ability to do this type of activity.

Comparison with freelancers

The work of the so-called "free artist" has a lot more to do with networkers than with hired labor. Earnings depend on the efforts made to the business and are not limited by anything, but on some points they still differ.

pros

While working in MLM, you can rely on the support of your sponsors and the structure you have created, and a lone freelancer can only rely on himself.
When you are on vacation, people in the structure will continue to fill up your wallet. The freelancer does not have such an advantage, and the time spent in idleness does not pay off for him in any way.
A loner physically does not have time to complete a certain number of orders, and in multilevel marketing one can develop endlessly.

Minuses

I did not find any obvious drawbacks by which MLM loses to free employment. It's preferable for you to freelance only if you are really passionate about your chosen type of activity or have a dislike for sales.

Comparison with own business activities

pros

The required minimum to start an activity in network marketing, much less investment that will be required to implement the simplest business plan.
Working as a networker, you do not have to solve many tasks that are simply necessary for a businessman, namely: keep records of accounting, develop your own methods for providing services to clients, create advertising materials - all this is undertaken by the company.

When you start working in an MLM project, you are entering the already prepared ground, because the company most likely began to promote its services long before your entry. People who are already familiar with the advertised products find it much easier to sell products.

Minuses

Very often, due to the lack of objective information about your type of activity, the “recruits” whom you involve in your structure may develop a negative bias towards MLM. Therefore, you will often have to carry out a series of explanatory work.
MLM can be compared to a small business, so if you are some oligarch who has the opportunity to buy a plant, oil rig or something similar, there is no point in MLM. On the contrary, people who have never tried their hand at entrepreneurship may find it interesting.

Summing up, I want to draw your attention to the fact that when writing this article, I did not pursue the goal of recruiting forum users into the network business, or vice versa, to convince it of its insolvency, but simply listed several subjective reasons. I hope this text will help you decide on the choice of occupation.

What others think of it

Now is not the best time for MLM - Western companies feel insecure, and the Russian market is in general trouble. There are a lot of domestic MLM specialists who are mastering this niche and have no prospects and no real chances of success. Their products, even if they are of high quality, are too expensive, so their task is not easy to implement.

If you want to start a business correctly, the investment must start with a good investment, otherwise you will still lag behind. Bookkeeping is necessary and important, even at the initial level. Of course, the sponsor will help to some extent, but it is important to develop it yourself to control the income and expense. And selling is not easier, because there are just as many pluses and minuses in one or another network company. It all depends on how much you want to increase your income. If a company has been on the market for a long time, such as Oreflame or Ayvon, you still need to prove how good it is. Cheap item also repels the buyer.

As for the cosmetic companies listed above, mlm for them has long been a successful tool in promoting their product about which I have a superficial idea. I personally worked for a company engaged in the distribution of abrasive materials from a German manufacturer in Ukraine, we were divided into regions and occupied the price corridor assigned to us, "To jump" above which was not recommended and was fined by the head office. In the article, the topics are well listed and the pros and cons of mlm, with which I agree, but I can also add that there are a number of features that I observed while working at the company (again, not with cosmetics), introduced by my director of pricing and wages of a networker. In my opinion, it is home-grown and reflects the interests of the directorate, but not mine - an ordinary employee, so I left after 1 year of work.

The article does not indicate the most important advantage of network marketing. You do the right job once, build a network, and then the network starts working and generates income without your participation. You can keep working, or you can do what you like. Kiyosaki writes about this, showing how network marketing creates passive income. At the beginning of the activity, you need to properly organize the structure and train people, and when the growth of the network gets out of your control, then the profit will grow without your participation.

Buying mountains of goods is generally a futile thing. The contribution should be such that a person can taste the product properly and have some kind of supply. At first glance, stimulating purchases leads to faster growth, but later it can lead to a local crisis.

Network marketing in Russia is designed to deceive people, products are expensive, I mean what is sold under the guise of medicine, penisoners are mainly conducted because of their illiteracy and ignorance. Somehow they agitated me to join the ranks of the Vizhin company, because they have such fabulous prices and promises from the healing of everyone and everything.

In Russia, absolutely any business is designed to deceive people in the sense that business is built in this way.
As for the price of the product, Russia has its own high-quality chain companies, where vitamins are cheaper, and this is understandable. Less taxes, less wages. As for the fact that the product is called a medicine - well, it's a mess in everyone's head, and what to want from old women.
What can you expect if national television shows programs about vitamins, in which, instead of collecting useful information, gathering left-wing people with expertise in other fields, the result is 40 minutes of dubious chatter and little common sense.
Vitamins naturally do not cure disease. However, it is likely that a person may have serious problems... caused by a lack of an element. In this case, you can guess, and the effect on health will be very positive. As for drugs, drugs for the most part also do not cure anything. Most medications are generally directed solely towards the symptoms. And, interestingly, people are more concerned about the symptoms than the disease itself.
I have a lot of friends who, at the slightest cold, start taking antibiotics. I ask why they do it. "Well, of course, I am sick - it means I have to take medications." And to explain to them that the more they take antibiotics, the more often they will get sick is very difficult.

I think the people who do network marketing are very weird. It is believed that they have the least friends, but I do not do network marketing, but I have no more friends either. And so the work is very difficult for me, because you need to pester people and be able to sell them what they may not need at all. But as it is, there are people who are very talented in this business, of course they are not just given success, but nevertheless, when it works out and they like it, why not do it? Such a job would not suit me, I do not know how to act like they ...

Why bother right away? MLM is built on, among other things, the most common principles of increasing sales - to seek and offer benefits for the buyer, and not to pester and impose. Any network is a network. And getting involved in it, you need to remember that somewhere there is a fisherman who holds this net, and this is not you. And so we have any work in high esteem, which does not violate the law.

We even have such a relatively simple concept as network marketing and that is distortedly interpreted. And, indeed, more often it looks like obsessive harassment with the aim of sniffing an expensive, but in principle not necessary thing. Another aspect is the high cost of such goods. Our half-impoverished, half-starved people simply simply do not have enough funds to purchase goods distributed through networkers.

Ekaterina V

Well, after all, it is not necessary to sweep everything away from these networkers. There is one product that I like in one mlm company, and I buy it regularly. Including because of its economy.

Technologies are growing, before I was engaged in Oriflame and rushed about everything I could, I wore these bags and earned, let's say, not bad, but not good, now you don't need to go anywhere, you just order all the cosmetics on the Internet and then you get them at your place of residence then you distribute, and these are technologies in modern world... Previously, all this had to be done, now there is progress. Pyramids and network communications have a place to be and quite successful, again they get more income, the one who is at the top.

I don't know how you can compare MLM with freelancing ...
While still students, many acquaintances tried to distribute the same goods Avon, Oriflame and Faberlik. Based on their own words, it is impossible to earn more or less decent money on this.
In addition, if we consider that up to 40% of the cost of the goods - payment to distributors, another 20 percent - marketing + actually income, I can imagine what quality cosietics has.

What is network marketing, what are its pros and cons? Which MLM business companies are popular for 2018? How to make your first money in the network business?

Hello, friends! With you is Alexander Berezhnov, an entrepreneur and one of the authors of the HeterBober.ru website.

Today the network marketing industry is gaining new wave popularity, the development of the Internet plays a significant role in this.

However, this concept is still controversial in society. Someone calls network marketing almost the only way to open your own business without investments, others are sure that this is all a financial pyramid, a scam and deception.

Some time ago I myself was engaged in network marketing and I know firsthand what it is. In this article, I decided to dot the “i's” and cover this topic from all sides, including taking into account my experience in this industry.

After studying this article, you will firmly decide for yourself whether it is worth doing an MLM business, what are the pros and cons, and you will also find out in which companies it is better to start and why.

So, let's begin!

1. What is network marketing (MLM) and what is its essence?

I'll start with a definition and then expand on it and give examples.

For example, the production cost of ORBIT chewing gum ranges from 20 to 50 kopecks per pack of 10 pads. However, while the gum is in the store on the counter, its cost rises by several thousand percent! It's all the fault of intermediaries - large and small wholesalers who sell chewing gum to each other.

But it doesn't end there, because, as you know, advertising is the engine of trade and intermediaries spend a lot of money on advertising.

Fact

In large companies, up to 50% of the final cost of a product is spent on advertising and product promotion.

Thus, we buy Orbit packaging for 20-50 rubles. Yes, of course, this cost includes trade margin the manufacturer itself, but the intermediaries also want to eat. So it turns out that the end consumer suffers, who overpays exorbitantly.

About a hundred years ago, people began to think about the problem of unreasonable markups of resellers and intermediaries.

Network Marketing Idea

To make the process of promoting goods (services) more convenient, cheaper and faster. Remove intermediaries and expensive display advertising from the promotion scheme.

This can be done if people themselves tell each other about the product of the network company, and their motivation will be the percentage they will receive from sales of the products of the MLM company.

But you won't earn much on interest. Therefore, multilevel marketing allows you to build your own business, creating a wide network of consumers of the product.

It is assumed that a person who has developed his network structure will receive a percentage of the total turnover of his structure. This is how he can create himself tens of thousands of dollars a month.

To learn how you can create such income in mlm, be sure to watch the video below. This is a cartoon about Pablo and Bruno - ordinary guys who have chosen different ways of gaining financial freedom, and both wanted to become millionaires. Let's see what they did.

Network marketing was designed to solve the following tasks:

Reduce the cost of goods for the end consumer. This can be achieved by eliminating the expensive standard advertising on radio, TV and the Internet.
To speed up the process of delivery of goods to the end consumer. Achieved through well-thought-out logistics (a network of own warehouses in different cities and countries).
Eliminate product counterfeits. In the process of reselling a product, its substitution and falsification of large quantities are possible. MLM company works directly with the end consumer, so the probability of product counterfeiting tends to zero.
Motivate company employees with money and business opportunities. In multilevel marketing, there is an opportunity to make good money and build your business from scratch.

2. How Network Marketing Works

First, I'll tell you about the general principles of this industry.

The manufacturing company has its own factories for the production of goods.

She sells these products without shops, the products are distributed thanks to a built-in recommendation system. In everyday language, this system is called "word of mouth".

A lot of people like this principle and are happy to buy products from the company.

Now all orders of an MLM company can be placed via the Internet, and paper catalogs popular some time ago with the development information technologies fade into the background.

The client is using the product and can start building a business with a direct selling company. To do this, he needs to find several people who will constantly buy products and attract new partners to the business to develop the network. That is why this type of marketing is called network marketing.

Having its own warehouses and delivery services, the network company delivers products to the warehouse, and then these products are delivered to the offices that the company's partners (distributors) have personally opened for themselves. Sometimes the company delivers the order to the client directly at home, which is very convenient.

Now I will talk about the features and principles of multilevel marketing for the manufacturer of goods (company), for the end consumer (client) and for a person who has decided to open his own business (entrepreneur) using the capabilities of mlm.

From the point of view of an MLM company

A distinctive feature of promoting goods in a network way is to reduce the cost of advertising their products. The company cares more about promotional materials for its distribution partners (they are sometimes called independent entrepreneurs) and building a system vocational training(mentoring).

The business of the enterprise ultimately depends on the high-quality transfer of the MLM idea from person to person.

From the point of view of the consumer

It is convenient for the client to receive goods with a quality guarantee, he likes affordable prices, samples, catalogs. Direct selling companies often have exclusive products and accessories that cannot be found in regular stores.

From the point of view of a distributor (entrepreneur)

People who want to start a business without investment can do well here. After all, the whole system has already been built, the market has been formed, most of the large companies are already heard by the population. In addition, a powerful training and mentoring system in network marketing companies makes the opportunity to build your own business more than real.

3. MLM business industry - history and development trend

Network Marketing originated in the West in the United States.

In 1945, American entrepreneurs Lee S. Mytinger and William S. Casselberry started their own businesses, becoming national distributors of Nutrilite Products. The principle of recommendatory (network) marketing became the basis of their activity.

Further, in the late 1950s, two companies were created in the United States: Shaklee and Amway. In Russia and the CIS countries, people are widely familiar with Amway products and the specifics of its business. The company itself was founded in 1959 by Rich DeVos and Jay Van Endel and was originally called the American Way Corporation.

The industry developed especially rapidly in the 1980s and 1990s. The range of products grew and by the mid-1990s, mlm manufacturers were offering their customers literally everything: from cosmetics and detergents to automotive goods, household appliances, long distance communication services and computers.

Today the network marketing industry has undergone great changes and almost all mlm companies have gone online in one way or another.

In 1996, Russia was created Direct Selling Association(rdsa.ru), which contributes to the development of the industry, its self-regulation and maintaining the reputation of the network business at a high level.
According to the Association for 2015-2016 in Russia, one way or another, multilevel sales are involved 6% of the total population(distributors), and these are millions of people, not counting consumers.

The Internet space has allowed the industry to develop at a rapid pace. And this is quite logical.

Example
You can build your business in a network marketing company now not only through face-to-face meetings at home or in a rented office, but also via the Internet, using the capabilities of Skype, e-mail and social networks... Advanced entrepreneurs create their own websites.

This is exactly how now "networkers", as it is customary to call distributors of products of multi-level companies, are actively processing the online space to expand the membership of their group (branch).

However, the development of digital technologies has spawned another side of this industry - the emergence of fraudulent companies and financial pyramids, which, under the guise of investment funds or simply respectable mlm firms, involve honest people in illegal and immoral schemes.

Later in the article, I will touch on the issue of fraud and tell you what not to do and how to distinguish a reliable network company from a scam.

4. Why today many people associate network marketing with a pyramid?

In continuation of the previous point, as I promised, I will open the “pyramidal question”.

The association with pyramids, deception and fraud in people arises rather from inexperience.

I must say right away that there is the concept of "classic marketing" and "network marketing", although it is very arbitrary. For completeness, let me tell you how they differ.

1. Classic marketing

These are all the ways and means of promoting goods that we are used to seeing around - advertising on TV, radio, outdoor advertising, and so on.

Selling goods in stores is also a standard way of promoting. As a result, all this can be attributed to the concept of "classic marketing".

2. Network Marketing

This is just an unusual way of distributing goods for the bulk of people. It, as you know, is also called multilevel marketing.

In this concept, there are no promotions, familiar to many, Retail Stores, there is no standard advertising in crowded places, and the goods themselves, as a rule, are of a higher quality in comparison with their usual counterparts.

The model of distribution of goods, which is unusual for many, instills fear on those who have heard about all sorts of deceptions or have already fallen into financial pyramids themselves.

Dear readers, remember!

Network marketing has nothing to do with a pyramid scheme, cheating or illegal activity.

Associations with the pyramid arise because both in the pyramid and in mlm it is necessary to attract people in order to earn money.

Only in the first case you get money for the "heads", that is, your earnings depend from the number of attracted people who invested money in the pyramid, and in the second - the income depends on the turnover that the clients attracted by you will make.

That is, if we are talking about normal multilevel marketing, you can subscribe at least 1000 people to your structure, but if they don’t buy anything, then your income will be zero.
In the pyramid, the opposite is true, where each attracted person is obliged to make a contribution, as a rule, quite substantial (from $ 500 to $ 5,000) and you are guaranteed to receive a percentage of his money, and your client will not receive a real product. He pays just for the opportunity to make money by attracting new "victims".

Below, in answers to frequently asked questions, I clearly outlined the criteria by which you can distinguish a good mlm company from a pyramid scheme.

5. Network marketing on the Internet without investment - myth or reality?

There is no myth here and there cannot be. Building your own network business via the Internet is a new trend that is gaining momentum every day.

How to find a client in your mlm structure via the Internet - 5 proven ways to attract:

Social media. One of the most popular ways. You can create a group (community) here on the topic of earnings and self-development. The people who entered will be your potential clients. You can also "spam", that is, send messages to everyone, but then you risk getting blocked by the administration of the social network.
Subject forums. On the forums about earnings and personal growth you can also find future companions in your layered structure.
Contextual advertising. You can create a website and configure contextual advertising on it, thereby attracting targeted visitors. There is already an article on our site,. However, this method can be very expensive for such a purpose.
SEO - promotion. By analogy with the previous method, you can create your own Internet resource and write articles on it containing keywords related to success, earnings and network marketing. Gradually, these articles will be promoted through the subscription form located on the site, and you will receive people loyal to your activity.
Lead generation. This method consists in creating a flow of contacts (requests) potential clients that you will attract with various advertising tools. You can learn more about what advertising is and what types of advertising exist from. You can process requests from potential customers (leads) and attract them to your MLM company.

You can use these and other ways to attract potential members from the Internet to your network.

6. Pros and cons of network marketing - an overview of the main advantages and disadvantages

Network marketing, like any other phenomenon, has a number of advantages and disadvantages.

That is why there are people who are furiously campaigning for mlm, and there are those who are afraid of "setevukha". For clarity of the picture, I have compiled a corresponding table that reflects almost all aspects of the SM:

Pros and cons of network marketing:

№	Comparison criterion	pros (+) criterion	Minuses (-) criterion
1	The opportunity to open your own business	A business in MLM can be opened with practically no investment and over time create passive income	Many novice distributors leave their business in SM, as it grows slowly and we often hear refusals.
2	Doing Business Online	Unlimited possibilities world wide web provide practically limitless opportunities for the growth of your business	Not all people will agree to cooperate with you and cost a business with your company, since getting into an interested audience through cold contacts is small
3	Buying quality goods at a reasonable price	In network companies, you can buy really high-quality goods, often their counterparts on the open market are either absent or are much more expensive.	Sometimes products from MLM companies are unreasonably expensive, even if they are of high quality.
4	Party, team	For many people from this industry, the very atmosphere of running mlm business is a way of life and they feel like a fish in water here.	For most people, spending time at various seminars, trainings and events of such companies is tiresome and does not correspond to their nature and psychological type.
5	Skills development, personal growth	In the process of work, you can acquire good skills interpersonal communication, planning, leadership and management	There are not so many people constantly striving for development, most prefer much more clear ways earnings, such as regular employment
6	Reputation	It is believed that people with leadership and well-developed communication skills will certainly achieve success here.	In society, the reputation of network marketing is significantly spoiled, so finding like-minded people, and even more so turning them into your customers or business partners, is not easy.

If you have not yet decided whether it is worth doing CM, then the criteria described in this table will help you once again understand whether it is yours or not.

7. Rating of network companies in Russia - a list of TOP-5 market leaders in 2017-2018.

The most interesting thing is that the first two companies Avon and Oriflame occupy 31% and 30% respectively in this rating. This means that these companies are by far the leaders among our citizens in the MLM industry.

As you can see, Mary Kay and Faberlic have almost the same market share, while Amway is somewhere in the middle.

In any case, I am sure that you have heard, if not about all of these companies, then about most of them.

I consider them to be reliable and it is with these companies that I advise you to work if you decide to start a network business.

8. FAQ - answers to frequently asked questions

I am often asked these questions, and here I cite them with the answers as the most popular.

Question 1. Should a beginner start his business with network marketing?

Yes, it is, but only if you are ready to wait a long time for the result (from 6 months to 3 years) and have a cash supply that will "feed" you in a period of lack of money. I also advise you to analyze your strengths and weaknesses, objectively assessing their capabilities.

But if you get tired of communicating with people and it is hard to endure refusals, then you better not rush to rush into this pool with your head.

Question 2. How to make your first money in network marketing?

To do this, find 2-3 clients and simply sell them the products of your company, having previously registered with it as a partner.

Then you will feel the "taste" of the first money. Perhaps it will be a very small amount: from 100 to 1000 rubles, but this will already be your money earned in direct sales.

If you are looking to get a more serious amount, then find 3-5 people who are planning to build a business with you. Help them find 3-5 more people for each and in a few weeks your income will grow to several thousand rubles a month and will increase as your "branch" grows.

Question 3. How and how can you attract people to network marketing today?

Today, as always, you can attract people to network marketing with the idea of earning prospects, creating passive income and free (flexible) work schedule.

The quality of products and the range of direct selling companies is constantly growing, so it is no longer so appropriate to say that we have high quality products.

But if you show the convenience of working with the company's website and the possibilities of doing business via the Internet, it will definitely not leave your potential partners indifferent.

Question 4. How to distinguish network marketing from a pyramid scheme?

It is no secret that some fraudulent companies defame respectable MLM enterprises and disguise themselves as them.

How to distinguish fraudsters? There are some characteristic signs of dishonest firms:

Here they are:

Unreasonably large entrance fee. Typically, this is from $ 100 to $ 5,000. It is from this money that remuneration is paid to the "distributor".
The product, as such, is either absent altogether, or has no market value outside this organization.
There is no documentary confirmation of the fact of receipt of money and other appropriate documents (invoice, contract, checks, etc.);
You are told that the money you will receive from number of involved participants rather than from the turnover of the structure.
The main point in the work of the organization is the emphasis on quick earnings , and the product (if it exists) is needed only as a cover for the pyramid's activities.

If you notice at least one of them in the company where you are invited, you should thoroughly study it for deception and legality of doing business.

As in any human and labor activity There are pros and cons of network marketing. Consider the most obvious of both.

Firstly, this type of earnings in Russia does not have a very good reputation. And basically it is not the MLM companies themselves who spoil it, but financial pyramids, which for uninformed people are the same as network marketing. The pyramids even structure their activities in a superficially similar way. But this is only an appearance, and it is very easy to distinguish one from the other. If in some structure only money is spinning and there is no real product, or it is of disgusting quality, expensive and exists only to cover the main financial activities Is a pyramid.

Cons of network marketing associated not only with a bad reputation. For people who are just coming to MLM - network marketing, the risks (mostly far-fetched) are the inability to organize their time, the big negativity that goes to the employees from the clients and the people around them, and the lack of communication skills.

Oddly enough, the listed risks are at the same time the advantages of network marketing. After all, working as a networker helps you learn to save your own time and spend it correctly, develop the skills of psychological resistance to difficulties and will give you the foundation.

Pros and cons of network marketing associated with financial side Affairs. On the one hand, many newbies are afraid that they are being invited into network marketing just to make money from them. On the other hand, serious financial investments are not required to enter this business. The entrance fee in most cases will cost much less than even the cost of opening one stall. The financial advantages of network marketing are also in the fact that it does not have to be made immediately the main source of income. At first, it can be made a small but pleasant break-in.

Cons of network marketing many who are just entering this sphere also see that here the legal side of working relations in our country has not yet been worked out to the smallest detail. Newcomers are not sure that the company offering network marketing will not throw them at any moment, the relationship of the networker with his employer is most often built on a contractual and largely trusting basis. The lack of a clear legal status for those involved in this activity also gives rise to such disadvantages of network marketing as the low authority of this profession. We all know that a doctor, or a banker, or a teacher is solid and prestigious, and many still imagine a networker as a little man with a knapsack.

Although it cannot be said that network marketing in our country is taking its first steps, it is still far from a generally recognized, quite civilized and worthy occupation in the eyes of society. And even all the advantages that this business provides do not help in this. Let network marketing allow you to develop, become financially successful and build your own life, and not by the orders of an office boss, you need to have a fair amount of courage to come into it.

In the end, each person forges his own happiness, and therefore everyone pros and cons of network marketing each should evaluate independently, based on the available information.

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

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

2. Networked business is very high level freedom. Moreover, there is freedom in everything: in the choice of the work schedule, in the choice of business partners, in the choice of products or services to be distributed, in the choice of methods of product promotion ... Networked business is the perfect opportunity to unleash your business and creativity. Perhaps this is the biggest plus of this business, because the most important thing in our society is the person himself and the disclosure of all potential opportunities. Only with independent, self-sufficient, capable individuals can our society flourish and it is network marketing that "makes" such individuals.

3. This is the unboundedness of your income. The place where there is no "earning ceiling" is in the network business. Here, only you can limit your income - no one else. Only you yourself can limit the growth of your team and your personal growth.

4. Lack of "bosses" and, therefore, a directive method of leadership. Well, tell me, who of us did not suffer from the tyranny and arbitrariness of limited and self-righteous individuals? There is no such. In the network business, everything is different. By harming his partner, the networker limits himself in his growth. Here, the success of everyone depends on the success of the entire team and the achievements of the entire team are directly reflected in everyone. Among other things, there is no linear model of subordination in the network business and therefore, we repeat, there are no bosses and subordinates, but there are just partners in the common business.

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

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

7. And the last thing. What are we all living for? For the sake of being happy, for our children, parents, relatives and friends to be happy. Man, by nature, simply has to be happy. The realities of today are such that one of the components of our happiness is financial independence. We are not saying that money should become an end in itself for you, but capable and happy man must be financially independent. What does network marketing give us in this matter? A few numbers:
- more than 50 people working in network companies around the world become dollar millionaires every day;
- only in the USA today there are more than 400 thousand millionaires in the field of network marketing;
- the annual turnover of the network business in the world is increasing by 20-30% and is currently more than 200 billion dollars.
- every day in the world more than 60,000 people become independent distributors;
- about 2.7 million people are employed in Russia in the field of network business, and our country today ranks 1st in the world in terms of growth in network sales - 540% per year (!).

Network marketing. Almost everyone has heard this term today, but not everyone knows what it is in practice. For reference: in accordance with the glossary (http://www.glossary.ru), multi-level (or network) marketing is a form of conducting out-of-store retail, in which sales agents () of the manufacturer establish contacts with potential buyers... Simply put, network or multilevel marketing means the delivery of goods, information products or services from the manufacturer to the consumer using tiered structure consisting of distributors.

Today you can often hear a tempting offer: " without material investment! Unlimited earning opportunities! " Or: "With our company you will become a millionaire!" Anyone hearing this will think: "Well then, not all people are rich, since it is so easy to become a millionaire? They just pump it out ..."

On the one hand, the author of these words will be right: there are enough companies profiting from people's trust and imitating the CM system, but today we will not talk about how to distinguish a "scam" from real network sales companies, but about how to understand whether you should try to make money in this way and how profitable it is in general. We will analyze all the pros and cons of this system.

Network Marketing - History

But first, a bit of SM history. It is inextricably linked with the name of the American (1897-1973), whose realized ideas turned into a multi-billion dollar network marketing industry.

In the United States of America, where Rehnborg ended up in 1927, he began to develop various nutritional supplements based on alfalfa, which contains many vitamins, minerals, protein and other useful components. Rehnborg offered the drugs created on its basis for testing to his friends, distributing the products free of charge. There were no results - no one tried the resulting nutritional supplements. Then Karl began to take money for them, realizing that nothing free is valued. The results appeared immediately, and the most positive ones.

Information about useful supplements became widespread (each of Rehnborg's acquaintances had many acquaintances), people asked Rehnborg to meet in order to get more information about the new product. Of course, Karl could not satisfy all the requests.

And then a brilliant idea occurred to him. Rehnborg invited his friends to give information about food additives to their friends themselves, and in case successful sale promised to pay a commission. He also decided to pay those acquaintances of his friends, who, in turn, would promote his product further, using their connections. This is how network marketing was born.

In 1934 Karl Rehnborg founded California Vitamins and thanks to new system sales, when consumers of a product became its distributors (distributors), the company quickly reached a turnover of 7 million dollars without investing a single dollar in advertising.

In 1939, Karl Rehnborg renamed his company to Nutrilite Products, maintaining the principle of distributing nutritional supplements. Its employees themselves invited newcomers to work, gave them the necessary information about the product and invited everyone to build their own network, inviting their acquaintances to the business. The company provided all distributors with its products and paid each a commission not only for the goods they sold themselves, but also for each sale made by a personally involved distributor. Thus, Rehnborg introduced "single-level marketing" into the practice of classic business.

Further history of CM is connected with the names of Nutrilite employees Rich De Vos and Jay Van Andel, who after ten years successful business in the structures of Rehnborg in 1959 created their own own company under the name American Way Corporation, abbreviated as AMWAY. The merit of these people is that, firstly, they have gone beyond the implementation of only one product, including in their assortment, in addition to food additives, household goods for home use.

Pros of Network Marketing

Like any other, this type of business has its advantages.

Of course, any distributor of any network company can successfully tell you about this. But, firstly, I am afraid that his story will be embellished with facts that are beneficial to him, and secondly, he will never tell you about the disadvantages of working with his company. I would like to give you proven facts about why it is profitable to work with such companies - than I will immediately answer the question of why network marketing still exists.

1. Possibility of unlimited earnings. Purely theoretically, this phrase is true, but in practice it all depends on the character of the person and his desire to make money. Moreover, as a rule, people who are not looking for easy ways to make money are more successful... Yes, yes, and this is despite the fact that most people in network marketing are attracted precisely by the ease of achieving the desired wealth! If a person is ready to achieve this goal, earnings are really not limited to anything: the more you sell products, and, most importantly, the more other people you can attract to your team, the more you earn. And no restrictions! The most important thing in this business is to build a large, cohesive team, which in itself is not difficult if a person has at least some organizational skills... And if not, then usually companies conduct a lot of trainings, which are designed to help such people.

Network companies exist in 125 countries of the world.Currently, there are more than 4000 only large network companies, the total turnover of which in the world exceeds $ 300 billion.

Currently working in the USA more than 2500 large network companies, through them 65% of products are promoted, and about 15% of the population are employed in this area, i.e. approximately every ninth inhabitant.

In Japan, the volume of sales of goods through the CM reaches 90%.

Works in Europe more than 700 network companies, in Asia Minor - more than 800.

Network marketing began to be used and largest companies, such as Ford, Colgate, Canon, Lipton, Coca-Cola and many other flagships of the business.

2. Financial independence. This factor is called one of the main arguments for SM. Sounds very attractive to many. But not everyone fully understands what this phrase hides behind itself. Distributors understand it as independence from the employer or from parents and relatives, if it is a young boy or girl. But this phrase does NOT mean that you will be completely protected from financial hardships and will not be dependent on life's circumstances.

It all sounds like this: "Yes, you will be given the opportunity of unlimited earnings, which thereby does not put you in the framework of an official salary and gives you financial independence in front of your parents and society." In fact, the meaning is somewhat different: "Yes, you will be given the opportunity to earn as much as you can, which thereby does not put you in the framework of an official salary and gives you financial independence in front of your parents and society." And the possibilities, as you know, are different for each person. And here the advertising slogan will be really true: "Find out the power of your capabilities!"

3. Own business. “Don't you want to use the unique opportunity to start your own?” - the distributor will ask you in surprise and, again, temptingly. Here he is really right: there is such an opportunity, only the distributor does not say something. Firstly, a business will become a business no earlier than in a year, when you create and promote your system of recruiting and training people in your team - which, in principle, is similar to drawing up a business plan in a classic business. Secondly, the phrase "without attachments" is not entirely accurate. It would be better to say "without significant investment." But more on that later.

4. A close-knit team. You can't argue with this advantage. In network companies, a lot of attention is paid to education and training, which is not always found in companies that do not use CM. Simply put, joining the company, along with the products, you also acquire a personal teacher who will help you in everything and guide you on the right path =))) ... The main motto in network companies is: "You learned it yourself - teach it to someone else!" Moreover, as a teacher you get those managers who have already achieved some kind of success themselves. And in general, as a rule, all people in a team are quite friendly and ready to help a newbie.

Cons of Network Marketing

And now about the cons. Namely, about those pitfalls in SM that most often frighten a newbie and leave negative, and sometimes even categorically hostile, impressions about the network business.

1. The instability of earnings. No matter how high income distributors promise you, they will still not be high even for the first 2-3 months in the company. For this period, such earnings are only suitable as a side job. After all, your training and recruiting the necessary people in your own team (as well as your product customer base) will require certain time... And for each person this interval is different. Someone is extremely sociable and has good organizational skills, which gives him the opportunity to acquire his own regular customers, and in the second one already teach several people the same skill and get a good income. And someone, on the contrary, is very shy and prefers submission, and his training can take a long time. If, of course, this person is patient. If not, then he will become one of the opponents of the CM, claiming that this cannot be made. But, on the other hand, in nature there is no business that made a profit in the first month.

This point is the main reason for leaving the network business. Not everyone can withstand constant pressure from clients (and they are often not quite adequate, because many have already formed the opinion that they are constantly trying to "sell" something, and it will take some effort to destroy it), as well as the distributors you train and even your teachers.

Since it has already been said about clients, I will tell you what is difficult in teaching people. Usually, people of almost all ages are accepted into the team, and each age needs its own approach. Young people, for example, listen to your instructions inattentively, and it takes a lot of work to explain to the student why it is necessary to do this and not in another way ("easier"), and why all these subtleties in communicating with clients. And here the older generation on the contrary, he will carefully listen to everything that you tell them, but ... will not believe. After all, in their opinion, they have a rich life experience, and they have already learned everything that is possible ...

Also, the load will be on the part of your teachers, because to begin with, you will be taught yourself, and something may contradict your habits and principles.

3. Inevitable material investments. Yes, investments, despite the phrase "Own business without investments", will really be required. The only difference is that it will take several thousand dollars to establish a business according to the classical scheme, and in network marketing - from 100 to several thousand rubles.

4. Responsibility for others. Some people prefer not to even be responsible for themselves, let alone others. But the whole system consists of a team, a set of its own assistants, their training; and then they will recruit their own, etc. As you teach people, you will bear some moral responsibility for those you attract and help you. And if you are not ready to be a mentor to the end, despite the nature of the student and the difficulties of his teaching, you should not take up this business. You can only earn by selling products, which, however, will bring less income.

Network marketing has ✔ its pros and ✔ its disadvantages. It is everyone's personal business to determine what is more important to him ➨

Network marketing

Pros and cons of network marketing

In conclusion, I would like to say that the main qualities of a successful CM leader are communication skills, organizational qualities, dedication and patience. Having these qualities can affect your success in this business. And the more developed they are, the correspondingly higher your chance of success.

What is network marketing for you? Cheating or Greatest Opportunity?