What is MLM network marketing? How much can you earn in network marketing? Advantages and disadvantages

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

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

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

However, this concept still causes controversy in society. Some call network marketing almost the only opportunity to open your own business without investment, others are sure that this is all a financial pyramid, a scam and deception.

Some time ago I was involved in network marketing myself and I know firsthand what it is. In this article, I decided to dot all 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 MLM business, what the pros and cons are, and you will also find out which companies are better to start with 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 package of 10 pads. However, while the chewing gum is on the shelf in the store, its cost increases by several thousand percent! It's all because of the 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 consists of advertising and promotion costs.

Thus, we buy Orbit packaging for 20-50 rubles. Yes, this price, of course, includes the trade markup of 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 by resellers and intermediaries.

Network Marketing Idea

Make the process of promoting goods (services) more convenient, cheaper and faster. Remove intermediaries and expensive media 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 receive from sales of the MLM company's products.

But you just can’t earn much from interest. Therefore, multi-level marketing allows you to build your own business by creating a wide network of product consumers.

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

To learn how you can create such an income in MLM, be sure to watch the video below. This is a cartoon about Pablo and Bruno - ordinary guys who chose different ways to gain financial freedom, and both wanted to become millionaires. Let's see what they came up with.

Network marketing was designed to solve the following problems:

1. Reduce the cost of goods for the end consumer. This can be achieved by eliminating expensive standard advertising on radio, TV and the Internet.
2. Speed ​​up the process of delivering goods to the end consumer. This is achieved through well-thought-out logistics (a network of our own warehouses in different cities and countries).
3. Eliminate counterfeit goods. In the process of resale of goods, substitutions and falsification of large quantities are possible. An MLM company works directly with the end consumer, so the likelihood of product counterfeiting tends to zero.
4. Motivate company employees with money and business opportunities. In multi-level 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 stores; the products are distributed thanks to a built-in recommendation system. In everyday language this system is called “word of mouth”.

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

Nowadays, all orders of an MLM company can be placed via the Internet, and paper catalogs, which were popular some time ago, are fading into the background with the development of information technology.

The client uses the products and can start building a business with a direct sales 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 distributed to offices that the company’s partners (distributors) have personally opened for themselves. Sometimes the company delivers the order directly to the client’s home, which is very convenient.

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

From an MLM company's point of view

A distinctive feature of promoting goods online is the reduction in advertising costs for your products. The company cares more about promotional materials for its distribution partners (sometimes called independent entrepreneurs) and building a system of professional training (mentoring).

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

From a consumer point of view

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

From the point of view of the distributor (entrepreneur)

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

3. MLM business industry - history and development trends

Network marketing originated in the West in the USA.

In 1945, American entrepreneurs Lee S. Mytinger and William S. Casselberry opened their own business, becoming national distributors of Nutrilite Products. The basis of their activities was the principle of recommendation (network) marketing.

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 features of its business. The company itself was created in 1959 by Rich DeVos and Jay Van Endel, and was originally called American Way Corporation.

The industry developed especially rapidly in the 1980s - 1990s. The range of products grew and by the mid-1990s, mlm-manufacturers offered their customers literally everything: from cosmetics and detergents to automotive products, 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, it was created in Russia 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, multi-level sales are involved in one way or another 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 now build your business in a network marketing company not only through face-to-face meetings at home or in a rented office, but also via the Internet, using the capabilities of Skype, electronic mail and social networks. Advanced entrepreneurs create their own websites.

This is exactly how “networkers,” as distributors of multi-level companies’ products are usually called, are now actively processing the online space in order to expand the number of participants in their group (branch).

However, the development of digital technologies has also given rise to 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, drag honest people into illegal and immoral schemes.

Below in the course of the article, I will also 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 do many people today associate network marketing with a pyramid?

In continuation of the previous paragraph, as promised, I will reveal the “pyramid question”.

The association with pyramids, deception and fraud among people arises rather out of inexperience.

I’ll say right away that there is the concept of “classical marketing” and “network marketing”, although it is very conditional. Let me tell you how they differ for completeness.

1. Classic marketing

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

Selling goods in stores is also a standard way of promotion. As a result, all this can be attributed to the concept of “classical marketing”.

2. Network marketing

This is simply an unusual way of distributing goods for the majority of people. As you know, it is also called multi-level marketing.

In this promotion concept, there are no retail stores that are familiar to many, there is no standard advertising in crowded places, and the products themselves, as a rule, are of higher quality in comparison with our familiar analogues.

The model of distribution of goods, which is unusual for many, instills fear in those who have heard about various kinds of deceptions or have already fallen into financial pyramids.

Dear readers, remember!

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

Associations with the pyramid arise because in both a pyramid and an MLM you need to attract people in order to make money.

Only in the first case do you receive money for the “heads”, that is, your earnings depend depending on the number of people involved who invested money in the pyramid, and in the second, the income depends on the turnover that the clients you attract will make.

That is, if we are talking about normal multi-level marketing, you can sign up at least 1000 people into your structure, but if they don’t buy anything, then your income will be zero.

In a pyramid, everything is the other way around, where everyone involved is required to make a contribution, usually quite significant (from 500 to 5000 dollars) and you are guaranteed to receive a percentage of his money, but your client will not receive the real goods. He pays only for the opportunity to make money by attracting new “victims”.

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

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 for your MLM structure via the Internet - 5 proven ways to attract:

1. Social media. One of the most popular methods. You can create a group (community) here on the topic of making money and self-development. The people who join will be your potential clients. You can also “spam”, that is, send messages to everyone, but then you risk getting your account blocked by the administration of the social network.
2. Thematic forums. On forums about earnings and personal growth, you can also find future partners in your multi-level structure.
3. Contextual advertising. You can create a website and set up contextual advertising on it, thereby attracting targeted visitors. There is already an article on our website. However, this method can be quite expensive for such a purpose.
4. SEO - promotion. By analogy with the previous method. You can make 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 activities.
5. Lead generation. This method consists of creating a flow of contacts (applications) of potential clients whom you will attract using various advertising tools. You can learn more about what advertising is and what types of advertising exist from. You can process applications from potential clients (leads) and attract them to your multi-level marketing company.

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

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

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

This is why there are people who vehemently campaign for mlm, and there are those who are afraid of “networking”. To make the picture clearer, I have compiled a corresponding table that reflects almost all aspects of the SM:

Pros and cons of network marketing:

If you have not yet decided whether to engage in SM, then the criteria described in this table will help you once again understand whether it is for you or not.

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

The most interesting thing is that the first two companies Avon and Oriflame occupy 31% and 30% in this ranking, respectively. 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 occupy almost the same market share, and 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 reliable and it is these companies that I advise you to work with if you decide to start an online business.

8. FAQ - answers to frequently asked questions

These questions are often asked to me, and here I present them with answers as the most popular.

Question 1: Should a beginner start his own network marketing business?

Yes, it’s worth it, but only if you are willing to wait a long time for results (from 6 months to 3 years) and have a cash reserve that will “feed” you during a cash-strapped period. I also advise you to analyze your strengths and weaknesses, objectively assessing your capabilities.

But if you get tired of communicating with people and have a hard time with rejection, then it’s better not to rush into this pool headlong.

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

To do this, find 2-3 clients and simply sell them your company’s products, having first registered as a partner.

Then you will feel the “taste” of your 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 want to get a more serious amount, then find 3-5 people who plan 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 per month and will increase as your “branch” grows.

Question 3. What 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 a free (flexible) work schedule.

The quality of products and the range of direct sales companies is constantly growing, so to say that our products are of high quality is no longer so appropriate.

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

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

It is no secret that some fraudulent companies discredit the honor of decent MLM enterprises and disguise themselves as them.

How can you spot scammers? There are some characteristic signs of dishonest companies:

Here they are:

1. Unreasonably high entry fee. As a rule, it is from 100 to 5000 dollars. It is from this money that the remuneration to the “distributor” is paid.
2. The product as such either does not exist at all or has no market value outside this organization.
3. There is no documentary evidence of the receipt of money and other appropriate documents (invoice, agreement, checks, etc.);
4. You are told that you will receive money from number of attracted participants , and not from the turnover of the structure.
5. The main point in the organization’s work is the emphasis on make money quickly , and the product (if it exists) is needed only as a cover in the activities of the pyramid.

If you notice at least one of them in the company where you are invited, it is worth thoroughly studying it for deception and the legality of its activities.

Question 5. How to choose the right company to start an MLM business?

To do this, you should pay attention to the following criteria:

• Duration on the market. You should not cooperate with companies that are less than 5 years old on the market.
• Demand for products. If this product is really in demand and has regular consumption, that is, it is often consumed. For example, cosmetics and household products, food.
• The site of the company. How convenient, functional and presentable it is.
• Training and support. Does it exist, how professional is the mentoring system and do you like it.
• Marketing plan. Is it fair and what type does it belong to:

1. Stepped with compartment.
2. Matrix.
3. Linear (single-level).
4. Binary.

It is best if it is a step-by-step marketing plan with a department. This MP is used by most reliable companies, for example Oriflame.

9. Conclusion

Friends, I myself stopped doing network marketing, not because it doesn’t work or it’s a scam and a deception, but because I found something I liked and now I’m doing business on the World Wide Web.

I have friends who have succeeded in SM, bought more than one apartment using it, regularly travel at the expense of their company and live a free and fulfilling life.

Did you know that you can literally earn millions of dollars in network marketing?

Watch the video below about the richest networkers (married couple):

I still think that the MLM industry is a good opportunity.

If you are an ambitious, energetic and sociable person who loves to communicate with people, benefit society and at the same time earn good money, then you will have no doubts about starting in SM.

I hope, dear readers, that with the help of my article you understood what network marketing is and learned about its pros and cons.

It is very important to us if you leave a comment on the article and share your experience on the topic.

Thank you in advance, good luck and great earnings! What is business consulting - a complete overview of the concept and recommendations on how to improve your business in 5 steps + review of the TOP-3 consulting companies

Network marketing on the Internet: business concept + 6 myths + 8 pros and 4 against + 5 popular MLM companies + 5 parameters for choosing a network company + 5 signs of fraud + tips for beginners + instructions on how to become a distributor (using the example of Oriflame) + 8 attraction tools partners + recommendations for entrepreneurs.

With the popularization of the World Wide Web, almost any entrepreneurial activity has been transformed into an Internet business. Product promotion methods, ordering methods, product delivery - everything is now focused on the virtual space.

Thus, many companies began to work under the MLM scheme. Network marketing on the Internet opens up new opportunities for their owners and is developing rapidly.

Today we will talk about how it works, why it is needed, how to open such a business, and evaluate the prospects.

Internet network marketing concept

Network marketing (MM) is a form of trading activity when sales agents establish interaction with customers. Those. supply of goods, provision of information products from manufacturer to consumer based on a multi-level structure can be called network internet marketing.

This business tactic was first used in the 27th year of the 20th century by the American Carl Rehnborg. Today, his example is followed by such well-known companies as Mary Kay, Faberlic, Avon Oriflame, Neways, Amway, etc.

Network marketing is growing at the same pace as software, telecommunications, and the Internet. In total, network companies reach a turnover of $210 billion per year. Japan is considered the leader in the development of network marketing.

The Internet has given rise to a new wave of popularity for this type of business. However, network marketing is still controversial. Many people living near the poverty line were able to achieve financial independence with its help. Others “look at the concept of network business with wolf”, mistaking it for financial pyramids and deception.

If the latter tried to understand the essence of network business, their opinion would change...

By promoting goods/services on the Internet thanks to multi-level marketing, you deprive yourself of intermediaries, who usually inflate the final cost of the product.

Network marketing is also characterized by a lack of... And this eliminates the need to spend on implementing an advertising campaign on the Internet, since products are distributed through recommendations from person to person.

MLM mission is to simplify, reduce the cost and speed up the promotion process.

Network marketing gives everyone the opportunity to build their own business on the Internet, while creating an extensive network of consumers. Anyone who develops a multi-level structure receives % of the total turnover for their activities. This is how you get passive income.

Myths Revolving Around Online Network Marketing

Before we look at how online network marketing works, let's dispel the myths that skeptics have come up with:

However, supporters of network business on the Internet also come up with many fables:

Multi-level marketing is the best type of business, which is the future.

Not a single dozen of the largest MLM companies on the Internet / in real life have been able to achieve leading positions over the half-century of their work.

The traditional concept of product distribution is still not inferior to the network concept. Therefore, the statement that MLM is the business of the future is wrong. Although, the individual sale of goods on the Internet is truly a progressive commercial activity.

Network marketing is the key to wealth and success.

You shouldn’t believe that network companies on the Internet will necessarily become a source of financial independence. If this statement were 100% true, everyone would have long ago retrained as networkers.

In practice, only a few manage to succeed. It all depends on how you take advantage of the opportunities that network marketing offers on the Internet;

MLM is an opportunity to run your own business.

If you are joining a multi-level company, it is a mistake to believe that network marketing will allow you to work exclusively for yourself.

First of all, you earn profit for her. And from this profit, she gives you a reward corresponding to your labor contribution. But this is only the case when you join an MLM company, and do not act as its founder.

How does network marketing work on the Internet?

People starting network marketing for the first time think that their earnings are influenced by the number of customers, but the key factor here is the number of distributors that we managed to attract. With their work and income, they will bring you a certain percentage of your earnings.

An MLM company operates without stores. The sale of manufactured goods occurs due to the fact that each networker attracts new buyers and sales agents. Thus, a network is built, which is why on the Internet this marketing scheme is called network.

Considering network marketing from the perspective of a person who decided to open it on the Internet, its distinctive feature will be, but the increase in costs for the formation of a mentoring system.

Those. An entrepreneur needs to allocate part of the money to vocational training. There will be expenses for promotional materials that will be used by distribution partners.

From a buyer's point of view, there are advantages. On the Internet, network marketing gives them a guarantee of quality, reasonable prices, the opportunity to receive exclusive products, etc.

However, it is worth dwelling on the advantages and disadvantages of MLM in more detail. Those Internet users who seriously decide to engage in network marketing should know its positive and negative sides.

1) Advantages of network marketing on the Internet.

1. Training, advanced training. Network companies that value their reputation and care about profit margins necessarily provide courses and conduct seminars. Therefore, their employees are always competent, which has a good effect on earnings;
2. Free schedule. Distributors can work as much as they want (2, 5, 10 hours). If the deal you made is effective, you can rest. However, there are less fortunate days when you have to work hard.

The Direct Selling Association, operating in the United States, conducted research that found that 90% of workers in the field of network marketing devote literally 30 hours a week to work. The remaining 10% of respondents – even less (10 hours).

The dependence of the amount of earnings on your contribution. If a clerk’s salary depends on the “uncle” for whom he works, then with network marketing everything is different. There is no limitation here.

A diligent, creative and clever person is able to win over clients on the Internet and is not afraid of a large amount of work. This means that his earnings will only grow.

Creative work. Network marketing is certainly interesting and does not force you to sit in an office doing routine paperwork. You won’t be bored either online or offline with MLM.

Moreover, the sale of goods can occur offline 24/7 and without your participation. For this purpose, social networks, blogs, websites, multi-profile advertising on the Internet and other tools are used.

Expanded geographical space. Traditional multi-level marketing will not give you as many opportunities as online MLM. Using the World Wide Web, you can establish contacts with customers and attract new distributors from all over the world to the network without a personal meeting.

To communicate with partners, you can use video conferencing, chat, Skype. Moreover, such tools are available to everyone on the Internet and free of charge.

3. Friendly team, atmosphere of cohesion and mutual assistance. Since in network marketing the team is united by one goal, everyone interacts with each other. A young distributor can count on the support of more experienced colleagues.

Possibility of choosing business partners and professional growth rates.

Public recognition of each distributor's achievements.

2) Disadvantages of network Internet marketing.

1. Income instability. Working on the Internet, you can actually receive both unlimited income and face lack of money. Network marketing is fickle, and in order to minimize such risks, you need to continuously increase your client base.

Rapid fatigue, nervous and emotional tension. Many sales agents find it difficult to constantly work with people and continuously communicate. Typically, distributors are viewed negatively, perceiving them as sales representatives trying to sell some nonsense.

Because of this, one has to face a moral burden. Some distributors cannot withstand the pressure from customers and for this reason leave the network business. But thanks to the Internet, this factor is gradually being erased. You need to be emotionally and stress-resistant.

Responsibility for wards. Those who are not familiar with responsibility for their own actions should not even attempt to work in network marketing.

This type of online business inevitably leads to responsibility for others. If you undertake to train someone, one way or another you will have to answer for the actions of your protégés.

2. The need for cash deposits. By attracting you to network marketing via the Internet, sales agents can promise that . In reality, you will have costs, such as purchasing catalogs and the like.

Let's summarize. SM on the Internet is an activity that is beyond the capabilities of people lacking determination, patience, communication skills, the gift of persuasion, and organizational skills.

How to start doing online business on the Internet?

If you have the idea of ​​becoming a distributor, you need to choose a large MLM company with a good reputation and turnover. There are quite a lot of them on the Internet and in real life.

The listed companies specialize in the sale of cosmetic products. If you do not intend to work with this category of goods, you can choose other companies. However, the listed companies are proven, and in any case will help you gain experience and understand the basics of network marketing on the Internet.

To avoid making a mistake with your choice, pay attention directly to lifespan of the organization. If it has already taken place and has been operating on the market for more than 4-5 years, you can trust it.

No less significant degree of demand for the product. Food, cosmetics, etc. are quickly consumed, therefore, they are consumed regularly. The company's products that you choose must be useful for consumers, then they will buy them on the Internet.

In addition to the two factors mentioned, the following are also taken into account:

• Functionality, usability of the representative, its presentability.
• Availability of training, corporate assistance. A normal MLM company professionally builds a training system and motivates its employees to attend advanced training courses and trainings.
• Validity of the marketing plan, its type. Often a stepwise approach is used.

Here are the signs of scammers:

• large entry fee (starting from $100);
• lack of goods, or unjustified market value;
• the dependence of the amount of earnings not on turnover, but on the number of customers you bring;
• promise of quick earnings;
• lack of confirmation of purchase and sale transactions, receipt of funds, etc. in documentary form (contracts, receipts, invoices).

Each MLM organization operates in accordance with the laws of its country. Therefore, in Russia, Ukraine and a number of other countries, a person can become a sales agent only upon attaining civil capacity. Those. the individual must be at least 18 years old at the time of employment.

Basically, relationships and salary levels are not disclosed in a collective/labor contract, but are formed on a contractual basis. This deprives the distributor of the social package and other guarantees available to hired workers. The conditions fulfilled on the Internet by a distributor within the framework of network marketing are determined by the company’s regulatory documents.

The main requirement for those wishing to become a sales agent is to sell a certain number of goods or for a specific amount.

For example, to become an Amway employee, a person must:

But Bing Han International hires on different conditions:

1. First, you contact the office of the MLM company or find its official website on the Internet to register.
2. Then you should undergo training/consultation with 2, 3... experienced specialists, buy or sell 1 unit of goods.
3. Finally, you will need to attend 5 trainings.

After, when you are hired and master the strategy of network marketing on the Internet, you need to earn your first money. To start, you have to search for 2-3 people who will purchase products from you.

If you intend to start seriously, along with searching for clients, look for partners who will be interested in MLM. With their involvement, you will increase your income, because the network will expand, and from each of its branches you are entitled to some kind of reward.

Theory is theory, but it’s much easier to understand the principles of network marketing on the Internet using a practical example, right? Then, let's not put it off for a long time!

How to become a distributor in a network company (using Oriflame as an example)?

Many people who decide to work in network marketing rather than as employees begin their activities with Oriflame. But only those individuals achieve success who demonstrate personal development, gain experience and knowledge, and are ready for time and financial investment.

In order to have a diligent team of distributors, Oriflame provides each employee with the following benefits:

The network company's operating system has been tested for decades. Today, an Oriflame employee does not need to run around with acquaintances and friends with a catalog under his arm, persuading them to prescribe any cosmetic product. All network marketing work can be done on the Internet. Moreover, whether the income will be additional or primary depends on you.

As with any other type of network marketing, it is important to create your team at the beginning of your activity. You need to use the Internet to attract new people who will help you increase product sales (you will learn about ways to attract new people in the next section).

Invited users receive not only their benefits, but also their benefits. For example, the opportunity to purchase goods at a 20 percent discount. The recruited team of people chooses on what principle it will work in network marketing - via the Internet or offline.

Anyone can become an Oriflame distributor, but at the same time he must have the following qualities:

• hard work;
• focus on success;
• perseverance;
• communication skills;
• self-confidence;
• determination;
• Internet access.

Network business in Oriflame is available to women on maternity leave, retired citizens, students, and housewives.

1. What do you need to work in the Oriflame network company?

You can run an online business on the Internet according to your free schedule. This method of work is convenient and provides more opportunities to increase income. This type of employment will allow you to earn a monthly salary of $1,000. And that’s not the limit.

In the company’s network system, there are no bosses who would cut your salary or deduct money from it for any needs. Therefore, the size of your profit is affected only by your personal activity on the Internet.

Start by registering. Follow this link https://www.oriflame.ru/business-opportunity/become-consultant. You will see a registration form that you need to fill out:

Activate your account via email.

A letter will again be sent to your email, where you will be notified of the personal number assigned to you and the sponsor to which you are attached.

The sponsor is your personal mentor. He will coordinate your actions and help you succeed. If necessary, you can contact him for advice.

You can get immediate income from sales. To do this, you need to show people an electronic catalog on the Internet and motivate them to buy cosmetic products. You can create this log by going to the " Sales support».


Give it a name and click on the “Save” button.

The profile displays all the necessary information for running an online business with Oriflame:

• trade turnover,
• History of orders,
• receiving awards and achievements.

If you are going to register a new consultant, you will need to do this through this tab.

After clicking on the appropriate button, an online form will open in front of you, similar to the one you previously filled out. Here you need to enter the details of the invited person, indicate his/her email so that he/she receives the letter.

Further actions are now small. The person who received the newsletter must activate registration using the access parameters that were sent to him by email:

Thus, when working with Oriflame on the Internet, you make a profit from the sale of cosmetic products. Since distributors are offered lower prices, your income is the difference between the catalog price and the consultant price.

You can build such a structure even from a small number of consultants invited by you. When you yourself master this key point in marketing, you can teach it to your students, who in turn will teach the people they attract.

As a result, a strong network system will be formed that will bring you additional income.

You also have the following benefits:

2. How much money do network business employees at Oriflame earn?

To receive money earned from an online company via the Internet, you will need to register as an individual entrepreneur.

Since Oriflame works transparently, employees’ salaries are paid by bank transfer. Therefore, to withdraw money from your account, you must be an entrepreneur and subsequently pay taxes.

Let's calculate the costs:

• Registration on the network company’s website will cost you 149 rubles. This amount will be included in your first order. Sometimes promotions are held, due to which the registration fee can be reduced to 10 rubles.

Registration in the Oriflame network business does not oblige you to place an order or distribute the product. You do everything as you wish. A company consultant is an independent distributor, which implies freedom of action and independence.

• To register an individual entrepreneur, you will need to pay a state fee of 800 rubles.

If you sum up all expenses, you get 949 rubles.

Of course, you will also have to pay for all orders. However, the money for it will be returned by your customers upon receipt of the product.

Now about income. As a beginner consultant, you can earn an average of 5-15 thousand rubles only from direct sales on the Internet. If you assemble a team, the reward will be formed by the network company depending on the amount of your partners’ orders and will vary between 3-22%.

For example, a partner has a turnover of 12 thousand rubles. or 450 BB (points). According to the bonus table, this is 6%. You are entitled to the difference: 22%-6% = 16%. Now you need to calculate how much 16% of 12 thousand rubles will be. - it turns out 1920 rubles.

You are entitled to such income per person under the above conditions. What if there are, say, 10 partners with similar success? Network income will be 19.2 thousand rubles!

8 ways to attract new business partners in online network marketing

You should not lure people on the Internet to network marketing by inventing new fables. It is also inappropriate to entice with the range and quality of goods. The range is expanding, the quality is improving - this picture is ubiquitous, it is already considered the norm, and not an advantage, so this argument is no longer relevant.

It is best to show a potential partner the prospects and opportunities that he will receive by working in network marketing via the Internet. Tell him about the advantages and disadvantages (that’s why we listed them in this article), show him the ease of use.

On the Internet, to attract future employees, MLM companies use:

• Websites. Your own resource is the most optimal and reliable option. It makes sense to create it if you have the ability to fill it with content. Articles should not only cover issues about network marketing on the Internet, but also be geared towards SEO promotion.
• Thematic forums– an effective method of finding companions. It is necessary to communicate on platforms dedicated to the topic of making money on the Internet.
• Groups and accounts on social networks. On these sites, you have the opportunity to post information about your MLM company in other people’s communities and those created by yourself.
• Mailings. Relying only on this method is inappropriate. Many will ignore your emails, marking them as spam. Therefore, treat it as just an additional tool.
• Boxes and similar services. CPAs, for a fee, will help you find new distributors into your network marketing structure. There are a large number of users registered on them who want to find a job.
• Contextual, banner advertising. On third-party websites on the Internet you can buy contextual ads or banners, which, thanks to their colorful design and clever slogan, will help you find caring people.
• Youtube channels. In the 21st century, people are losing the habit of reading; video hosting sites, where you can have fun and earn money, are gaining more and more popularity. This is a convenient and effective way to attract new clients and train existing sales agents.
• Resources for finding available vacancies, etc. On web platforms where people are looking for a part-time job or main source of income, those who are interested in your ad are guaranteed to appear.

You can attract clients and new distributors from the Internet without personal communication only when you have already established yourself as a network marketing worker, have created a certain team, having previously selected a target audience interested in how to improve their financial situation.

At the initial stage, communication is necessary. Moreover: you will teach your new partners what you yourself have learned.

8 recommendations for online network marketing for beginners

1. If you want to achieve success much faster than expected, don't sit idly by. It is necessary to improve yourself, read relevant literature, and not be ashamed to adopt the experience of experienced networkers.
2. Do not neglect a thorough study of the product and its properties. You must be prepared when a customer asks you about product specifications. Otherwise, you won't see any sales. And don’t even think about lying to get more money!
3. It is necessary to strive not only to conduct trade, but also to develop your own network on the Internet. This is perhaps one of the most important rules of successful network marketing.
4. Promote products online and search for partners using as many available tools and techniques as possible.
5. Feel the fine line between attraction and imposition. If you see that this or that Internet user does not show interest in you, stop spoiling his and your nerves.
6. Be patient and see everything through to the end even when you encounter failures. Don’t think that if someone you know couldn’t achieve good results in network marketing using the Internet, then the same situation will happen to you.
7. Plan your time correctly. After all, a free schedule gives you freedom of action. Use the formula “first the important, then the urgent.” Rational time planning is the key to the success of any activity, including network marketing.
8. Learn original approaches, be bright, extraordinary and charismatic. People are drawn to those with such qualities. This can be felt even on the Internet, where personal acquaintance is not provided. This way you will increase your rating, increase sales, for which you will be pleasantly rewarded.

How to create your own network business on the Internet?

We figured out how to become a distributor and the next steps. But what about those who want to open their own network marketing on the Internet?

Firstly, such people should already have a company that sells goods of its own production or products of another brand. In any case, there should be no complaints about the quality of the goods. Their cost also plays an important role.

Are you okay with the quality and range of products? Then you can enlist the support of competent distributors and create your own network.

Be sure to create a royalty system for your distributors so that it benefits not only you, but also them. You should take care of a good training and incentive system for newcomers to the ranks of networkers. After all, the level of profit depends on their ability to attract clients and employees to your network company.

At this point, it is important for you, as a “front-line worker,” to try to develop leadership skills. It’s good when you have something to sell and to whom, and you have staff. However, if you are not a motivator, your online network marketing will stall.

Only with leadership abilities can it be possible to generate a branched and strong structure.

It, in turn, should be diluted with unique technologies, its own methods of work and promotion, since the process of network marketing itself is a dynamic movement. Now it can develop, but tomorrow it can slow down and die out completely.

If you manage to spin up this “money machine”, it will soon bring you dividends. Creating a website on the Internet will help you achieve this.

It is possible to open a network company and develop it even with a small budget. You can run such a business via the Internet without interrupting your main business activity.

Where to start doing network marketing on the Internet?

You will learn about a competent start and the “Magnet” technique from the video:

Network marketing on the Internet will give you unlimited financial prospects, If you focus on building a strong team, you will earn a good reputation.

A properly developed training system, continuous support for new members, regular corporate events, taking measures to increase sales - all this will help you improve the quality of your life.

What is network marketing - the path to success or a mythical way to make money? Historical facts about MLM + pros and cons + TOP 5 companies in the Russian Federation.

What is network marketing?

Most people agree that these are some kind of fraudulent schemes that allow only a few lucky people to make money.

Such thoughts are related to the main problem of MLM - these are extremely high promises to clients.

Today, after reading the article, you will learn what the essence of network marketing operations is.

And, of course, you will get an answer to the question: is it possible to get real income using such a business scheme.

What is network marketing: historical background

Network marketing (MLM) in its current form was not a separate business development model. It appeared as a manifestation of the need to sell goods.

Who was the first to discover such a scheme and become the founder of a network business?

The founder of the first network sales scheme is Karl Rehnborg.

If you thought that this person had been building his policy for decades before opening a business, this is not so.

All complex things began with a banal approach.

Karl Rehnborg grew alfalfa on his property. At that moment, an idea struck his bright head:

“What if all the beneficial substances from alfalfa can be converted into an edible form for humans, so that its intake can increase the vitamin tone of the body?”

Undoubtedly, Karl had a good goal.

Later, he opened his own line of healthy food and began to offer it to friends and work colleagues, explaining all the usefulness of the new product.

It is interesting that out of the kindness of his heart (this cannot be explained by other reasons), Karl gave away goods just like that, without demanding any money in return.

Do you think there was an effect from promoting free useful products?

No. Nobody believed Karl. Everyone was very confused that a person could simply give away a useful, worthwhile product.

Carl Rehnborg came to an unexpected conclusion: if a nutritional supplement was sold at the average market price, and not just given to friends, demand would appear.

And he hit the nail on the head!

Karl began to use this business scheme, giving birth to one of the main tenets of MLM - mutual assistance and team support.

Rehnborg's friends began buying his product. They no longer thought it was a cheap deception for one simple reason - it was no longer cheap.

Then Karl began to look for new ways to expand his network of buyers. And again I came to the correct conclusion!

They consisted of a percentage of sales of the dietary supplement. Now do you recognize how a standard network company works? That's how it all started.

The result of the work of Karl Rehnborg:

• 1934 - Carl founded the California Vitamins company, thereby expanding the range of products sold.

In 1934, Rehnborg renamed the company Nutrilite Products.

The operating principle remains the same.

A whole network of product distributors, so-called partners, has formed.

Each partner attracted new employees by offering a percentage of product sales and dividends for quality organizational activities.

Karl Rehnborg is known throughout the world as the “father of network business.”

After a short historical sketch, it’s time to turn to the realities of modern MLM business.

What is modern network marketing: terms and definitions

Network marketing- This is one of the types of retail sales of products, based on immediate, direct interaction between sellers and consumers.

A feature of network marketing is the opportunity for each client to become a marketer.

It would be most correct to compare a network business with a multi-level dealership. MLM also consists of several levels.

It’s not for nothing that such organizations are often called financial pyramids!

Let's look at the main components.

The first stage of the pyramid: manufacturer – distributor

The first stage of activity under the MLM scheme is that the manufacturing company provides its products to the partner.

A partner is an individual who enters into a cooperation agreement with a supplier.

In the CIS, this agreement is not included in the labor format, i.e. does not provide you with social guarantees and has a special form of taxation.

The terms of the contract have similar clauses in any area of ​​network business:

• mandatory use of the manufacturer's products by the partner;
• attracting new partners to the organization;
• work according to a clear scheme defined by the organizers;
• unquestioning adherence to the moral principles and policies of the company;
• minimum monthly sales volume.

Subject to fulfillment of each clause of the contract, according to the MLM company, you get access to unlimited earnings.

Second stage: second-order partners

The whole essence of the MLM activity scheme begins with the second order.

Each partner who was invited by a participant of a higher level (1st level) performs all the same functions as his supervisor.

There is only one difference - part of the income from sales remains in the pocket of the superior curator.

Each participant, in the end, strives to form his own structure, since this brings real income in the form of dividends from his own sales and the activities of his “subordinates.”

P.S. The word “subordinates” is deliberately placed in quotation marks: in the structure of network marketing there is no concept of line management.

All relationships between colleagues at various levels are based on mutual assistance - this is simply beneficial for all partners.

Third stage: entry-level partners

Lower-level partners differ from founders only in that they have less income. At the same time, functional responsibilities, as units of MLM, remain unchanged.

Work at the first or second level involves manifestations of maximum activity not in selling products, but in promoting and forming one’s own structure.

An interim summary should be made:

The interaction pattern of network sales involves the development of the structures of each employee.

The explanation of this process is very simple - each subsequent seller receives a percentage of sales + dividends from the entire network organized by him, in the form of a percentage of the profits of “new” participants.

Network marketing - is it that simple?

The concept of network business and MLM structures has negative associations, especially in the CIS, where people have learned from the bitter experience of financial pyramids.

This section provides the reader with a comprehensive overview of how network marketing works - an unbiased assessment of income opportunities.

Positive aspects of network marketing

Lack of a linear management system.

You work for yourself, which is very similar to entrepreneurship.

Close-knit team.

Each partner is interested in supporting “junior colleagues”, as this brings him financial benefits.

There will always be someone who can help organize your networking activities in the right direction.

Supervision is the basis of a network business.

Possibility of constant growth.

Another positive aspect of MLM.

Everything depends only on your abilities, including earnings.

Very significant experience in interacting with people.

This is a useful skill for everyday life and the development of your own entrepreneurial project.

A network business can be considered as a platform for the further implementation of your own.

Flexible schedule.

Representatives of MLM structures can devote from 10 to 30 hours a week to work, thereby combining it with work or study.

You must understand that an online business cannot replace your main source of income.

At least in the first stages of activity.

Negative aspects of network marketing

Possible destabilization of the network structure at any time.

This process may be triggered by the activities of individual partners, which will not meet the company’s standards.

You should consider the possibility of the collapse of the entire structure, since many years of experience of MLM participants proves this possibility.

Uncertain payment standards.

An example is the American company Starcom, whose representatives promised high payments to each participant.

The result is that the partners took out loans, pledged property, and the company paid less than 25% of the announced amount.

It is not difficult to guess what kind of material damage the clients suffered.

Opportunity to get into a financial pyramid.

Imagine a situation in which you invested in an MLM structure by purchasing an initial package of products.

Several months pass, the customer structure expands, they also make deposits and purchase products.

Another month passes, you have not yet been able to cover even your own expenses, since the product is not in demand.

The company is closing...

In this situation, approximately 50% of participants remain without profit.

They were unable to sell the product, but made a significant investment.

If you have never dealt with entrepreneurship, it will be very difficult to “stay” in the MLM operating mode.

The specificity of the activity lies in the constant moral tension, since you are responsible for your sales and the entire organized structure.

After analyzing the pros and cons of network marketing, we can assess the degree of risk of such business activities as quite high.

A special feature of working under a network scheme is constant responsibility for one’s own work + training and control of lower-level partners.

You already know what network marketing is and can independently assess the prospects for development in this direction.

If you are confident in your organizational talent, as well as the abilities of a manager and financier, it’s time to move on to choosing an employer.

Network marketing: choosing an employer

Your network income and confidence in stability depend on the right choice of employer.

First, we need to consider possible options for the Russian business space.

Top 5 Russian MLM market

Network company name	MLM market share (%)	Description of activity
	~30	Sale of cosmetics, pricing policy - acceptable for the middle class. Be prepared to meet a huge group of women and find your place in it. Networking activities at AVON are more suitable for girls.
	~30	Marketing area: cosmetics, souvenirs, healthy food. One of the leaders of the Swedish MLM market. The advantages include increased loyalty to your employees. Working in this network company will allow you to have a small but stable income.
	8	Stability is the most suitable word to describe the activities of the AMVAY company. The scope of marketing is from household utensils to dietary supplements. Unlike the companies mentioned above, it provides equal chances for development, regardless of the gender of the employee. This fact is derived from the wide range of products offered.
	5	A company that only accepts women. Specialization: cosmetics, beauty care products. One of the most experienced network organizations, but still not widespread on the Russian market.
	4.5	Large manufacturer of natural cosmetics. It is one of the most progressive companies on the Russian market and has a strong base for network marketing.

Working for “newbies” in the MLM market is dangerous, because you cannot be 100% convinced of the veracity of all obligations.

You can learn about the many benefits of network marketing from the video:

What is network marketing? After reading the article, you are already able to independently determine the meaning of this term.

Network marketing evokes a subjective attitude in every reader.

MLM ( Multi Level Marketing) or network marketing is a method of selling products from the company that manufactured them directly to the end buyer. To promote and sell products, as well as disseminate information about them, the manufacturer attracts the consumers themselves (agents, distributors), who are offered various types of rewards in return. In turn, consumers who become sales agents also attract new members, which ensures the constant growth of the network.

Network marketing from a manufacturer's perspective

A well-built MLM business can quickly capture the market and build a stable network. The creators of this marketing scheme call the reduction in the final cost of the product for the consumer the basis for the success of promotion and the fight against competition. Thus, the production cost may differ from the final price in the store by 2-3 times. This markup is formed as a result of the formation of a complex structure of the traditional distribution channel, which includes dealers, stores and their service personnel, the presence of service centers and much more. By cutting them off, the network business reduces the market price without losing its own profit.

In addition, network companies do not have the problem of building and monitoring a management system, as well as selecting qualified personnel and motivating them. Training the necessary sales skills, attracting new employees and encouraging them to achieve high results is transferred to the agents themselves.

Another important advantage is the protection of products from counterfeiting and maintaining the required level of product quality. This is ensured by the manufacturer’s ban on selling online goods in regular stores or from mobile street counters. Thus, even if a counterfeit batch is produced, it is unlikely to be sold without attracting attention.

Initially, network marketing was also based on the goal of ensuring faster delivery of goods to the end consumer, however, taking into account the realities of the modern market, this side of the network business has become less pronounced.

Network marketing from a distributor position

When entering an MLM business, the average consumer receives three possible options for cooperation:

1. Attracting new sales agents (network expansion) and receiving bonuses;
2. Purchasing goods for yourself at a personal discount and without an agent’s markup;
3. Selling products with profit from the markup (the difference between the cost of goods at personal discounts and the final price for which the goods will be sold).

The work process itself consists of the following stages:

• Concluding an agreement with the company;
• Purchase of a starter kit of goods and promotional materials;
• Search for buyers and new distributors;
• Conducting presentations and sales at home, in a rented office, during personal meetings in public places;
• Receiving commissions or bonuses from the company.

The relationship between the main company and distributors in network marketing is built according to a specific marketing plan, which determines according to what rules and calculation schemes remuneration will be paid. In practice, there are four main types of marketing plans:

• Classic or linear- all invited new network members (not buyers, but new distributors) are the main (first) line from which bonuses are awarded. From agents invited by first-line distributors, the original agent is not entitled to bonuses.
• Binary- is based on the fact that only two new agents can be attracted to the network, each of whom also invites only a pair of distributors. As a result, balanced (ideally) branches are formed, called “legs”. Such a marketing plan allows you to speed up the promotion process, but profit can only be obtained if the branches generate income in the ratio specified in the agreement (50x50, 60x40, 70x30).
• Stepped- the agent receives remuneration for all participants in the structure he has formed. After reaching a certain level, the founder of the branch gains access to elite bonuses and premiums.
• Matrix- bonuses are paid only when a certain number of distributors are attracted to the first line and the further construction of a given number of levels.

Also in practice, combined methods can be used, which is determined by the strategy of a particular company.

Agent registration system

An important component of building an effective MLM business is an accounting system that allows you to control the relationship between sponsors and distributors, track sales and purchase processes, and also calculate bonus deductions. Initially, when most companies used a linear marketing plan, the use of standard spreadsheets was enough to accomplish this task.

With the advent of more complex structures, the need arose to create specialized automated systems (Ritos, B2B-MLM, OKsoft, Easy MLM accounting) that allow working with a load of up to a million network participants. Large companies with substantial start-up investments often develop their own programs.

The difference between MLM companies and financial pyramids

Network marketing is based on building a pyramid in which each higher level receives income from system participants located at lower levels. This principle is also used by fraudulent organizations called financial pyramids. The fundamental difference between them and network marketing is the emphasis of MLM companies' policies on selling products that have real value, and not on attracting investments from new participants.

To distinguish network marketing from a financial pyramid, you need to pay attention to the following signs:

• The company offers high-quality goods that have value outside the company’s activities and are in demand (household chemicals, dishes, household appliances, clothing, vitamin supplements).
• You are given the opportunity to earn income only from the sale of goods, without recruiting new agents.
• The company enters into an agreement with each agent, drawn up in accordance with the law.
• The cash contribution is a payment for a starter package of products, and not an investment for participation in the project.

What is network marketing on the Internet

Adapting to modern methods of promoting products to the market, network marketing companies very quickly mastered the Internet space, which is primarily used as a way to find new distributors and buyers of products, as well as as a means of remote network management. The following channels are used for this:

• Social media. Here, activities such as actively sending out offers about the opportunity to earn money in the MLM business, selling goods, publishing advertisements in thematic and popular groups, interacting and working on motivation with already attracted distributors can be implemented.
• Landing pages. This type of site allows you to both sell network marketing products and register for presentation meetings for future distributors, seminars and sales training.
• Portals for registered distributors (online stores). Provide the ability to remotely place an order and track the availability of products in the main warehouse.

Thus, the essence of MLM on the Internet remains the same as in offline business, but there is a significant plus - the target audience is significantly expanded and the scheme of interaction with it is simplified.

How much can you earn in network marketing?

The policy of MLM companies is based on accepting into the structure all applicants who have expressed interest, regardless of age, status, education and experience. However, when choosing network marketing to make money, few actually understand what it is, and therefore a very large number of disappointed participants who do not have the proper qualities and do not want to learn, believe that it is impossible to make money in this area.

When signing an agreement with a network marketing company, when asked about earnings, they will undoubtedly answer that the level of income depends only on you. This calculation is quite abstract, because your time and energy are limited resources. Starting a career as a networker is very difficult and your sponsor (higher distributor) is unlikely to tell you that according to statistics, only 5% of newcomers who come to the network achieve a stable income of $200 per month, only 1% reaches the level of $500 and only 0.5% has a chance receive $1000 after several years of hard work.

There is an opinion that you can get an acceptable income only in young MLM companies, since the chance of being at the top is greater. But the truth is that the founders of the company earn the most, as well as the very first distributors, who are mostly engaged not in sales, but in forming a network, building a corporate culture, conducting trainings and seminars. The rest of the participants in this business are constantly updated. Thus, every five years in large MLM structures up to 90% of distributors can change.

This means that if you are not a manufacturer who is ready to build your business on the network marketing model and among your friends there is no such entrepreneur who is ready to take you on as an assistant, there is no difference for you when to start working as a networker. If your goal is not millions, but several thousand dollars of stable income, the chances of achieving what you want are quite real.

Network Marketing and Legislation

Since network marketing is a fertile area for the development of fraud, in many countries around the world the activities of such companies are regulated by law. Thus, in the USA, in the MLM business it is prohibited to set sales plans for agents and name specific figures for possible earnings. Also, if you want to go out of business, the distributor has the right to return unsold goods, receiving at least 90% of its original cost.

Unlike Western countries, domestic network marketing is not only not controlled by the state, but also does not even have an appropriate definition in law. This huge disadvantage complicates the work of both distributors and manufacturers who want to sell through an MLM scheme. In the Russian Federation, the following format for legalizing activities is most often used:

• The manufacturer is registered as an ordinary enterprise (LLC, JSC, CJSC). At the same time, since the network can grow unlimitedly, registration of individual entrepreneurs is not allowed.
• Distributors are registered as agents (with payment of taxes by the manufacturer) or as separate individual entrepreneurs (with independent payment of taxes).

When considering the question of what network marketing is and how it works, we can note both positive and negative aspects. It is not an ideal mechanism for promoting goods for a manufacturer, but at the same time it demonstrates fairly high performance and really protects unique products from counterfeiting. As in any business, it requires significant efforts and entrepreneurial savvy from participants in the system to stand out among competing distributors and partners.