Every day, thousands of people all over the world try to discover ways that could provide them with the opportunity to receive basic or additional income. To do this, they have to look at the vacancies that have appeared on the labor market or to study certain methods of earning.
To help solve the problems of generating income for each person allows network marketing. The reviews of professionals in this matter clearly indicate that success can only be achieved if the right steps are taken at the start of a career in MLM.
Itās rather difficult to explain in a nutshell what network marketing is. Some people, when faced with similar companies, call their earning schemes a real āscamā. But there is also an opinion and the opposite of this. According to him, network marketing receives reviews as the only opportunity to open your own business without the initial investment of large sums of money in its development. So which of these two opinions is true? In order to understand this, you need to understand the question "Network marketing - what is it and how does it work?".
Only after collecting detailed information about the MLM system, will each person be able to come to certain conclusions and decide for himself whether to work in this area, or leave it to others.
What is MLM?
This abbreviation is decrypted as follows: MultiLevel Marketing. And that means nothing more than āmulti-level marketingā. It is also a direct selling system.
Network marketing (MLM) is a special way to promote a product with the help of a whole network of people who receive a certain percentage of sales or rewards for attracting newcomers to the company. A person simply talks about the product to his acquaintances and friends, and they, in turn, disseminate such information further. As a result, a kind of network is formed that contributes to the rapid sale of goods. This is the essence of network marketing.
Invite people to the company is very beneficial. Indeed, for each new buyer, a person has certain percentages of the profit. However, expanding the customer network is far from simple. Often, for this in network marketing, a wide variety of psychological techniques are used. Not everyone likes this. That is why, before inviting a new person to the company, network marketing professionals should explain to him the essence of such a technology for distributing the product and explain the advantages that this work has.
A bit of history
The first company operating on the MLM principle appeared in 1927. It was then that the creator of food additives, K. Renborg, laid the foundation for multilevel sales, in which he achieved good success.
Initially, K. Renborg was engaged in ordinary trade. However, soon there came a moment when the demand for products became much higher than its capabilities. And then K. Renborg came up with a great idea. To the distribution of the goods created by him, he began to attract acquaintances and friends, offering them the appropriate reward.
Somewhat later, natives of this company, which was called Nutrilite Products, Lee S. Mitenger and William S. Casselbury developed the basic principles of such sales. Soon MLM gained popularity around the world. By the end of the 50s of the last century, based on the company that laid the foundation for a new type of distribution of products, the currently widely known Amway retail chain was founded.
But the MLM scheme and companies working in this area received special popularity in the 80-90s of the 20th century. And today they offer a very extensive range of products, which contains almost everything, from vitamin supplements to dishes, cosmetics and household appliances. Which companies have chosen network marketing for themselves? Oriflame and Avon, Faberlic and Zepter, as well as many others. According to experts, some of these companies have an annual turnover of about 200 billion US dollars of products on the market.
Learn to distinguish
Sometimes a network company is compared by those who first encountered MLM, with a financial pyramid. Of course, at first glance, the scheme by which sales are carried out is not very simple. However, with regard to network marketing, here a person is not required to invest a lot of money in order to just sit there waiting for a miracle.
If this is real network marketing, how to make money in this area? It will take a lot of effort to build up its customer base. At first, there may not be any profit. However, if you make some efforts, then soon you can begin to receive a certain income from sales. If the network is too large, the newcomer will be far from its top. In such cases, he should not wait for the move to the Maldives or sky-high fees. But a couple of tens of thousands as an addition to the salary is quite real.
However, before you become an agent and begin to interest customers, you need to pay attention to certain points. They will avoid the financial pyramid. So:
- True network marketing offers to sell a particular product or service that is contained in the manufacturerās catalog. For the future, products are never purchased. Only those products that have been ordered by customers are subject to sale. Payment for the goods is made on the day when they are received from the warehouse.
- A company operating on the principle of a financial pyramid will require payment of membership fees or the purchase of "securities", which outside this organization are nothing more than ordinary wrappers. In addition, with a financial pyramid, each person makes a profit not at all from the volume of products sold by him and his network, but from the number of people whom he brought to the company and who paid her membership dues.
- Another type of network earnings that is doubtful is the implementation of various equipment or software. Before starting work in such a company, you will need to pay for a certain package of services that allows a person to take a place in the trading chain. It can be various tools for working in the form of a plastic card or personal account, the use of which is impossible without paying a monthly fee. Where can I find this kind of network marketing? Examples of running such a business are far from unique. So, Talk Fusion attracts potential customers and agents with offers of income that can be obtained only after a certain amount has been paid in advance and two or more newcomers have been attracted. The chain created in this way will be profitable. Such a scheme is more similar to the financial pyramid, although the company still has a product that needs to be sold. But, in order to succeed in this company, a person must possess the qualities of a psychologist, speaker and leader. And in this case, he is unlikely to be able to rise from the initial level to the very last step.
From the foregoing, we can conclude that successful earnings in an MLM company are possible only after a preliminary study of all the conditions of cooperation. Only by making the right choice can one achieve successful promotion.
Assessment of prospects
How to start earning in direct sales? To conduct such a business, a reliable and promising network company should be selected that will achieve the desired result. The best start option is a well-known brand. When choosing it, you donāt need to make big efforts to convince customers of the need for a purchase. Such cosmetics manufacturers as Faberlic or Oriflame, as well as companies offering home goods (for example, Amway) are popular. Consumers have already managed to evaluate these products, and they will buy them without any fear.
However, it should be borne in mind that other distributors have already managed to occupy the niche of famous brands. And for those who have chosen network marketing for themselves, how to make money in this case? A high level of competition will require the use of a special strategy, without which it will not be possible to create a customer base and begin to receive their own passive income. Of course, in this regard, itās easier to make money in a newly created network company that offers a product that inspires consumer confidence, but is scarce in the market. These are new dietary supplements, training courses, devices for health and home, etc. The choice of this or that direction will largely depend on a personās personal interest, as well as on his desire to earn money on this.
Rating of MLM companies
There are a large number of manufacturers on the Russian market who sell their goods by direct sales. What are these network marketing companies? Their rating contains those brands that occupy almost 70 percent of the MLM market. In the first place on this list is Avon. It is followed by Oriflame. The third place belongs to the Amway company. The fourth is the Mary Kay company, which offers cosmetics. The fifth place in the ranking is occupied by Faberlic.
The remaining companies are considered smaller and cover the remaining 30 percent of the market.
Training
If network marketing is chosen as the business direction, how to make money on it? Attention should be paid to the help provided by company representatives to newcomers. It may include various manuals and video lessons, trainings and meetings. All this, as a rule, is provided absolutely free of charge. Sometimes curators also help in attracting first customers. Without training it is impossible to work in MLM at any stage. The more detailed information a person has about the product and its advantages, the easier it will be to convince other people that they need it. That is, credibility directly depends on the existing knowledge base. At the same time, the experience of MLM professionals also helps, who will certainly tell you how to make a profit faster and also attract new people to create passive income.
Receiving a profit
An important point when choosing a network company is to study the scheme for calculating cash and bonuses. After all, making money is the main motivation for any person.
With a fairly transparent income-generating scheme, the absence of penalties, as well as unrealistic settings for the company's proposed sales volume, work in the selected network company is quite capable of bringing its good results.
Action plan
After choosing a specific network company that provides an excellent opportunity to earn money, it is recommended to draw up a business plan for yourself, which will allow you to understand what attention should be paid.
So, it is worth choosing the way to get money. This may be a direct selling method or using a passive option. Which one is more promising? Often, distributors of products tend to start with personal sales. At the same time, they get the opportunity to study demand and create a customer base.
Professionals who have perfectly studied network marketing look at this question a little differently. How to make money, according to their advice? MLM gurus recommend that newcomers start simultaneously from two positions. Indeed, among potential customers there will always be people who want to receive additional income, as well as those who wish to purchase products at the purchase price.
Networkers, standing at the highest or middle step in the hierarchy of the distribution scheme, note that most of their earnings are due to the work of subordinates, rather than direct sales. Thus, after some time, having developed a customer base, you can completely refuse direct sales of products, faithfully motivating the entire multi-level structure of agents.
Sales methods
How to get good income in a network company? To do this, you will need to find the most effective methods of attracting customers. There are several of them:
- Direct contacts with people. This method is used if a person working in a network company has free time to visit public places or has a very large circle of relatives and friends who are not yet involved in MLM business. However, judging by the reviews of professionals, this method takes a lot of time and is often ineffective. A similar option is relevant when there is already a list of customers who need only the delivery of catalogs and products.
- Creating a consumer base using social networks, your own website or online store. In this case, you will need to devote less time to work, and the coverage of the audience of potential customers will be much wider. In this case, only those users who are interested in the company's products or wish to receive additional income will respond to the offer.
- Creation of contextual advertising and landing pages, distribution of offers on the websites of announcements and on e-mail.
Everyone who wants to make money in network marketing can increase their profits several times if, at the initial stage, 2-3 MLM companies are selected right away. So, customers can be offered simultaneously several brands of cosmetics, as well as products intended for face and body care. This option is also advantageous in that the cost of the product in competing companies has differences. This allows you to choose goods from the right segment for people of different incomes.
Self-knowledge
Not everyone can succeed in network marketing. In order to receive a high income, you must have the following qualities:
- patience and stress resistance;
- sociability, suggesting the ability to speak, and then to maintain a conversation with any person;
- perseverance, which will achieve the goal, sometimes returning even to the place where the refusal has already been received;
- psychological skills to convince a person of the need to purchase goods;
- leadership qualities that will make it possible to develop a passive income chain;
- oratorical qualities to speak confidently, correctly and beautifully;
- the ability to plan their own time, which will prevent fuss, eliminate inconsistencies in scheduled meetings and leave time for rest and self-education;
- trading skills.
A person with the qualities listed above, applying all the rules recommended by professionals in this field, will certainly succeed in network marketing.