The essence of the business model is that consumers are also partners of the company.
Each new customer becomes a partner, a junior link in the chain of distributors, receiving not only a product, but also an income.
Profit is received by all members of the organization from the total turnover, the level of earnings is proportional to the contribution - the more people attracted an employee, the longer and more branched the network has been built, the more he gets.
A distributor here is not a seller, but an entrepreneur interested in developing a business and promoting a product.
Today, the network business presents a rather impressive list of companies - the first were cosmetic brands Avon and Oriflame, but now they sell clothes and cosmetics, medicines and food, personal care products and much, much more in a similar way.
Income increases in proportion to the increase in the number of people in the created network, gradually reaching the point where you can do nothing on your own, just making a good profit from sales made by people who are down the chain.
Benefits and features of business in this area
The main advantages of a network business:
- If a company is truly trustworthy, then this is an opportunity to always use high quality products (excluding the chance of getting a fake) and recommend finds to friends and acquaintances, bringing something good into their lives
- If the business doesn’t go well, it’s not scary - the employee doesn’t need large initial investments and he practically doesn’t lose anything, it will just be possible to buy products / services at a discount
- Minimum start-up capital - implemented in the purchases of funds / services for personal use
- Great opportunity to combine with the main job
- Providing training and support from whoever attracted
- The ability to use information technology to promote <
- With a good level, income from active will turn into passive
- Work according to your own plan, in accordance with a comfortable pace of development
- A good opportunity to improve personal qualities, learn to build effective communication from different people
- The financial perspective is not limited by anything - only the framework that a person can set for himself
Kiyosake's Networking / Marketing Video:
Trips to other cities and countries, training conferences, meetings where you can communicate and exchange experiences are organized for network members. It’s not just a job, it’s a new circle of friends, so to be successful you need to truly admire the product, to sincerely recommend it and turn work into a lifestyle.
Today, the network business on the Internet is becoming more and more relevant. Despite the peculiarities of communication, the principle of work remains the same - attracting people to the team, promoting a product / service, increasing sales, receiving a percentage of the sales of our own and all employees that were given.
- 1 Pros and Cons of Network Marketing
- 2 Step by Step Business Plan
- 3 How Much You Can Make From Network Sales
- 4 How much money is needed to start a business
- 5 What equipment to choose for organizing a network business
- 6 Which OKVED must be indicated to register a business
- 7 What documents are needed to open a network business
- 8 Which tax system to choose for work
- 9 Do I need permission to start a business
- 10 Technology of network marketing
- 11 Newbie in Network Marketing
Nowadays, it is quite common to receive messages about job offers via the Internet on social networks.
You are promised the absence of any financial investments and the time spent only 2-3 hours a day.
At the same time, they guarantee that with such work in six months you will be able to reach an income of 30 thousand rubles a month.
Consider whether the network marketing business idea is as bad as it is painted.
There is nothing wrong with the idea of network marketing. It was conceived about 60 years ago as a way to save a manufacturing company.
At the same time, the company saves on advertising, intermediaries, warehouses, etc.
Then network marketing began to conquer the Internet, and things went faster.
Now there is not a single person who has not received an offer of such earnings at least once, but the reputation of network marketing has already been damaged.
People were initially distrustful of the "street hucksters", who were quite intrusive for the most part.
Hello everyone. I often come across reviews on network marketing online. Some consider him a financial pyramid, while others praise him for decent earnings and great opportunities.
Today I decided to once again clarify some points and debunk popular myths about MLM business. Let's talk about how to make money in the network business, is it realistic at all, and what is important for beginners to consider.
What is it
The term MLM is translated from English. multilevel marketing means multilevel marketing. This is a sales system in which each newly joined participant receives income not so much from the trade itself and personal sales, but from attracting new partners from the entire depth of the structure.
Each partner promotes the company's products that cannot be bought in regular stores.
Income forms the difference between the discount price for representatives and the official cost of selling the product. Also, income comes from the turnover of the entire team.
In different companies, the terms of cooperation may differ significantly: both in terms of marketing plan and in terms of preferred recruiting tools and methods.
Be that as it may, the principle of MLM is really similar to a pyramid scheme: those who came earlier earn at the expense of those who came later. But not everything is so simple.
Network marketing is much more complex and structured than it seems at first glance. Thousands of people really get good money, leave their offices and turn MLM into a business.
How networking works
The majority of the network business causes, if not disgust, then clearly non-positive associations. Fraud, the desire to "warm up" to gullible people, and even the common people "scam" - all this people say about the network business. On the contrary, those who make money on it praise this direction of entrepreneurship and promise mountains of gold.
We will then talk about what a network business really is, consider the principle of network marketing and find out if it is possible to make money on it, or are advertising around us just empty promises?
What attracts MLM business?
The desire to get as much money as possible, and at the same time to invest "three kopecks", not to put in any physical or intellectual effort - perhaps this is the most important factor that serves as a trigger for most network business clients.
The most striking example of a network business is the distributors of cosmetics: Avon, Mary key, Oriflame - these brands are well known even to those who do not use such products at all. Actually, this factor speaks about the popularity of MLM business.
The essence of such entrepreneurship is not just sales, but building a whole network - the more partners a distributor attracts, the more his income. In turn, each partner, in order to receive more income (and not only from sales), attracts his partners. These partners also do not want to live on sales alone and attract more partners - and so on ad infinitum. The main distributor who launched the chain receives a certain amount of income from the entire network. Hence, the larger the network, the better.
Visually, it resembles a pyramid - the top, this is a distributor, and from him are already layers - his partners and the salespeople they attract. There is simply no end to such a system.
It would seem that there is nothing wrong here - sell yourself, teach others to sell and get income from it. But, the very intrusive selling process, as well as (in some cases) the dubious quality of products that are “sold” to consumers, and forms a negative perception of such a business.
A person who wants to do network marketing is usually attracted not only by the opportunity to earn good money, but also by the following factors:
- Create stable passive income.
- Flexible schedule - most people combine this type of activity with their main job.
- To start, you do not need large financial investments - if you take the example of the same Oriflame and the like, then the initial investment is the purchase of a certain set of cosmetics at a reduced price.
- Making a career - oddly enough, but the most successful and persistent networkers reach regional directors and so on.
- Bonuses, bonuses and other incentive programs - in the network business, for those who sell well and sell a lot, they introduce various loyalty programs, which is a smart marketing move - this stimulates selling even more, and therefore the one who is at the top pyramids will get more.
How does American MLM business differ from Russian business?
MLM - sounds like an English multilevel marketing, that is, multilevel sales.
If you are fired up with the idea of organizing your network project and want to open an MLM company, you should consider the details of the stages of launching an affiliate system.
Multilevel marketing is a promising area for business development. MLM elements are used to one degree or another by companies with different directions, which are focused on increasing the level of sales. The goods are sold by independent partners who at the same time popularize the brand and recruit new people, expanding the distribution network.
Network companies have their own characteristics and specific organization of business processes. Direct sales provide an opportunity to save on many items of expenses that representatives of a traditional business cannot afford. For example, in affiliate marketing, there is no need to maintain a physical marketplace for offline sales and the need for advertising decreases, since a positive image of the product is formed and reinforced by agents.
Network companies reduce non-production costs and can afford to reduce the price of products almost to the cost price. The goods are delivered directly from the manufacturer, which eliminates speculative mark-ups.
If you are fired up with the idea of organizing your network project and want to open an MLM company, you should consider the stages of launching a partner system:
Sales niche and product
Choosing a niche and the product itself is the first difficulty you have to face. An important competitive advantage of products will be quality, uniqueness, the possibility of long-term storage and transportation, and most importantly - relevance.
For example: leading MLM cosmetics companies produce a product that has a certain degree of uniqueness (eg organic or mineral cosmetics) and is designed for a specific customer (anti-aging or children's cosmetics). It is important to understand what the selected segment of the target audience needs and present yourself in the right way, referring specifically to the target customer.
Choosing a Marketing Plan
Choosing a compensation plan is the main and most important stage in the organization of MLM. Marketing determines the level of attractiveness of a business for partners and whether the experience of working with you will be positive.
An attractive company from the point of view of a partner must have an easy-to-understand bonus program, an hourly settlement system and a transparent structure management policy. Distributors want to feel reliability, adherence to values close to them and the quality of the organization of the workflow, and they attract and retain their lucrative bonus schemes.
In terms of spending your own resources, trying to “reinvent the wheel” when starting a new company is not worth it if you do not have relevant experience. It is more profitable to contact professional developers of marketing plans who organize your business from scratch.