Which network company is better for business. We need to convince people

Alexander Kaptsov

Reading time: 11 minutes

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The first network companies entered the Russian market back in 1993. Then there were no more than a dozen of them. Over time, the business expanded by attracting new people, and today the list of network companies includes about 500 organizations. For many people, network marketing has become the main type of income. Some are attracted here by the flexible work schedule, others by regular communication with people, and others are pleased by the opportunity to quickly career growth, and, of course, monetary reward. Currently, over 5 million distributors operate throughout Russia, having a fairly extensive network of 20 million clients.

7 main criteria by which network companies are evaluated

Determining the direction of your involvement in the network marketing field is not an easy task.

Therefore, first of all, you should pay attention to the main parameters by which network companies are usually assessed.

1. Product Offered. It must be safe for human health and affordable. Its use should produce results.
2. Company age. It is best to enter into an agreement with an organization that has existed on the market for at least 5-6 years. Firstly, not a single one will last that long, and secondly, as statistics show, approximately 80% of network companies cease their activities before the end of the first 5 years.
3. Marketing plan. It is advisable to compare it with the plans of other companies, paying special attention to network compensation payments.
4. Distributor training. It should be free, accessible and professional.
5. Company fame. To build an international business, a company must have a structure in at least 3 countries.
6. Legality of the company. The presence of legal status in the country where the distributor intends to operate and an official website on the Internet indicate that it is possible to cooperate with the company.
7. Strong leadership team. The success of the entire team largely depends on the personal qualities and capabilities of leaders.

Independent rating of chain companies by sales volumes for 2015

Brief introduction to network companies

This international corporation, headquartered in Michigan (USA), has been successfully operating in the sales market for more than 55 years. Amway branches are located in 80 countries, including Russia (since March 2005).

Consumers are offered over 450 types of health products that are of high quality.

What are the features of the company?

• Purchasing products to Amway at wholesale prices, the distributor sells it at retail with a thirty percent premium. His income is made up of these percentages.
• For large volumes For personal purchases, the participant receives an additional reward.
• Inviting to the team new distributors or consumers of products, the distributor receives a reward in the form of a reduction in interest on the cost of goods.

Having achieved significant success in sales, a person can live on the interest transferred by Amway to his personal account.

Avon's history goes back over 120 years. Over 5 million distributors cooperate with it in more than 100 countries. The company's first representative office appeared in Russia in 1995.

Avon products are more focused on the female audience, offering lovely ladies perfumes, cosmetics, jewelry and various accessories.

Distinctive features of the company's work

• Cooperation as a VIP client. free registration and the opportunity to purchase products at a 30% discount. At the first order and further, the participant receives gifts.
• Cooperation as a Coordinator. When attracting new representatives, the coordinator, in addition to the already existing 30% discount, also receives 12% of the income from the sales of his group. There are bonuses and incentive programs for coordinators.

Despite the fact that the company is only 35 years old, its products are widely distributed in 92 countries. The products are aimed at people who want to lose weight and cleanse the body. Offers Herbalife and natural cosmetics.

• To work as a Distributor You must purchase the International Distributor Kit.
• When selling retail goods purchased at a wholesale price, the distributor receives a 25% income.
• There is a supervisor above the distributor. His commission and monthly remuneration for services is 5%. In addition, its retail income is 50% and wholesale income is up to 25%.

Mary Kay

Mary Kay has been around for almost 50 years, and all this time it has been very popular among women. The principle of its consultants, “Try before you buy,” is still relevant today. This is one of the best-selling brands whose products are designed for facial skin care and makeup application.

The company's branches exist in 36 countries, on 5 continents. In 1993, the first Mary Kay products went on sale in Russia.

Features of working in the company

• For work Women at least 18 years old are invited to join the company.
• To become a Consultant for beauty, you need to purchase a Consultant Starter Kit. Consultants receive income from the sale of products during their presentation at master classes, when re-ordering goods and recruiting new employees to work as a team.
• You can become a Direct Client to purchase goods at a significant discount - up to 40%, receive gifts and a monthly magazine, participate in competitions and get free professional education makeup techniques and business basics.

132 years have passed since the founding of the German company Vorwerk. Its activities began with the production of carpets and weaving equipment. Today the company offers kitchen equipment and floor care equipment, which are sold in 58 countries. On Russian market Vorwerk products appeared in 2005.

What's special about the company's work?

• For beginners Those wishing to participate in the work of the company are invited to free education, including a theoretical part and basic training. Advanced training courses are conducted.
• Consultant plans his own work time, receiving a certain percentage of sales.

Almost 90% of successful MLM companies present on the Russian market operate in the field of selling cosmetics and dietary supplements. We also found our customers in such categories as goods for motorists, dishes and textiles. Many of the network brands are not only known to consumers, but are also in high demand, which means it is much easier to get additional income by becoming a representative of such a network. In order to reduce risks and enter into an agreement with a reliable organization, you can consider a list of network marketing companies in Russia that operate completely legally and are included in the ratings of the best in terms of product quality and terms of cooperation.

Foreign MLM companies in the Russian Federation

It is worth admitting that best companies network marketing in Russia came to the domestic market from the USA and Europe. Many of them have been working for decades, and even today you can occupy a worthy niche in the existing chain of such a network.

First network company, which appeared on the domestic market in 1995. In the CIS countries, its name has become a common noun to designate all nutritional supplements for weight loss and work in the network business in general. Herbalife was founded in 1980 and today is one of the world's three largest networks. On average, annual product sales are about $4.5 billion. Income from participation in the network is generated through discounts on the purchase of products, which at the starting stage is 25%.

Official website in Russia -.

Avon

The most old company network marketing company in the world, founded in 1886 in California. It has been operating in Russia since 1991, offering cosmetics, perfumes, accessories and souvenirs. One of the three largest network companies in the world. Avon products are popular in 75 countries. Network participants are offered a linear marketing scheme, including income from individual mark-ups on products and remuneration from group turnover.

Official website in Russia - avon.ru.

Amway

The largest and most successful MLM company. Began its work in 1959 in the USA. A distinctive feature of Amway is its wide range of products, which includes various consumer goods from cosmetics and household chemicals, to bags, dishes and stationery. Amway's annual turnover is approximately $12 billion. Network participants are positioned as Independent Amway Entrepreneurs who receive the right to purchase products at a discount. In addition to earning money through mark-ups on goods, the distributor (registered as an entrepreneur with the tax authorities) can receive bonus payments for personal turnover and the turnover of the group he has attracted.

Official website in Russia - amway.ru.

The company was founded in 1963 in Texas. A special feature of this network is not only the release of high-quality and affordable cosmetics to the market, but also regular lessons for clients on skin care and makeup techniques. Thanks to this, distributors of Mary Kay products are called consultants. The network's annual turnover is about $3 billion, and the total number of consultants is more than 2.5 million people. IN currently There are about 500,000 network members registered in Russia, with almost 80% being updated throughout the year. The partnership is based on a linear marketing system. Income is generated from individual markups when selling products, as well as commissions for achieving a certain level of turnover.

Official website for citizens of the Russian Federation - marykay.ru.

Enough famous company Oriflame, founded in 1967, was one of the first to enter the domestic market, which today positions itself as the main one. Since 2006, in addition to service centers, production of some types of brand products has been established in Russia. Currently, there are more than 3.5 million distributors registered in this marketing network, working under a multi-level marketing scheme. The company's main products are cosmetics, perfumes and the Wellness line of nutritional supplements. In recent years, the company has been actively developing in the Internet space.

Official web representation in Russia -.

Many companies involved in network marketing make attempts to enter the market with a product that is atypical for this business and is in constant demand among consumers. Perhaps the Austrian company Zepter, which began operations in 1986, did this best. The main direction of goods is high-quality cookware, household appliances, medical equipment and cosmetics. Products are manufactured using our own innovative developments at six large factories located in different countries of the world. As of 2018, more than 120 representative offices of the network were registered in Russia, and more than 6 million people became the company’s clients. Zepter offers its distributors a linear marketing system.

Russian web representation -.

A young French MLM company with a linear marketing system, which entered the Russian market in 2013. The main product line is natural cosmetics at an affordable price, while distributors purchase products at a 26% discount. The income of a company representative, in addition to the markup, is also formed from the turnover of the attracted group, which ranges from 3% to 21%. Distributors can also open a bureau (division), receiving additional bonuses from its turnover. At the current stage, Biosea is in a phase of active growth, which makes it attractive for building an independent career.

Official website in Russia - biosea.fr/ru.

In fact, the Farmasi company was founded in 1950, but it entered the Russian market only in 2011. The main direction is the sale of decorative cosmetics, luxury perfumes and various care products. Like many network marketing cosmetics companies, the Turkish brand Farmasi offers to earn money through markups (discounts for partners), which directly depends on sales volume. Bonuses are also paid based on the turnover of the attracted group, with the percentage of deductions depending on the level of the latter. Currently, the development of this network is marked intensive growth, which is due to the high quality of products and incomparably affordable prices.

Official website of the company -.

An American company that started operating in 1978. A special feature of this network is its products made exclusively from Aloe Vera. At the same time, the catalog currently contains more than 150 items of complexes, cosmetics and dietary supplements. The current network of distributors acting as independent entrepreneurs of the Forever Living Products company exceeds 10 million people, but this company is still very little represented on the domestic market.

Company website for the Russian market - foreverliving.com.

Another American company working in the production of cosmetics and dietary supplements. When developing Jeunesse Global products, the main focus is on anti-aging and comprehensive rejuvenation of the body. This is a relatively young network, registered in 2009. It appeared on the domestic market only in 2014, offering distributors six options for generating income, working exclusively online. On initial stage the partner receives a markup on products due to a 35% discount, a reward for purchasing a starter package, as well as commissions from sales of the attracted team.

Russian version of the official website - jeunesseglobal-russia.ru.

Kyani

The company has been operating since 2005, but entered the Russian market only in 2013. The assortment includes natural juices and vitamin complexes, including noni juice. Much of the product is made from products grown in Alaska. The company offers network partners 12 types of income, including commissions for turnover without limiting the group level. At the same time, the achieved rank of the distributor does not decrease with a decrease in turnover. Data financial indicators indicate that the annual income from the sale of Kyani products is consistently about $1 billion, which indicates the popularity of the products among consumers.

Russian version of the company's official website - kyani.com.

One of the first Russian network companies, founded under a franchise purchased in the USA in 1998. The product range includes more than 150 items, most of which are dietary supplements and cosmetics made from corals. Initially, the company's marketing plan had a linear structure, which over time was supplemented by many types of bonuses and rewards. When registering as a distributor, a 20% discount on products is automatically provided.

Russian network marketing companies

Undoubtedly, the leader in terms of popularity of the MLM business model is the United States, but our country has also made significant progress in this direction over the past decades, introducing many quality products and promising cases for distributors. At the same time, the TOP network marketing companies in Russia are somewhat more diverse and include networks that work with a wide range of consumer goods, and not just dietary supplements and cosmetics.

The network began operating in 2002, setting itself the goal of becoming a leader in Russian perfumery. Ciel Parfum's strictly linear marketing plan invites distributors to profit from product markups. Moreover, in order to receive a 40% distributor discount, you must purchase one of the starter packages, costing from 25 to 75 dollars. For attracting a group and increasing turnover, the discount increases. The company's products themselves are of good quality and meet international standards, which ensures consumer demand.

This Russian brand, using linear marketing, undoubtedly tops the ranking of network marketing companies in Russia. The network began operating in 1997 and since 2003 has entered the international market, delivering goods to 42 countries. Over the past years, the company has not only formed a network of 2 million distributors, but also absorbed several competing MLM companies. The main products are cosmetics, high-quality household chemicals, clothing and accessories. According to RBC, this is one of the fastest growing companies in Russia.

Network website -.

The company's main products are medical equipment and household appliances for therapy and healing. The network began its activities in 2005, and since 2009 it has received certification and permits from the Ministry of Health of the Russian Federation. The company's marketing strategy provides for a linear cooperation scheme with a distribution discount of up to 60% of the cost of goods. Bonus rewards are awarded only to first-level partners, but there are no restrictions on turnover.

Recently, a new company website has been launched - biomedis.life.

A Russian network that also works with medical equipment and, above all, devices for conducting physiotherapy at home. It was founded in 1998 and today has more than 120 large warehouses located in the CIS countries. The range includes 15 types of devices, in addition to which dietary supplements and medicinal cosmetics have been included in recent years. The marketing cooperation scheme includes several levels, which include discounts on products, commissions from personal sales and turnover of the attracted group, as well as rewards for achieving a certain rank. The company conducts very effective training sessions for new partners. Today this network is attracting more and more attention from both distributors and ordinary consumers.

We can say that this is the first domestic Internet project that has successfully combined the MLM concept and the auto industry. The network began operating in 2014 in Barnaul and today has more than 120 representative offices in various regions of Russia. The main essence of the project is to provide partner discounts for a wide range of services and goods. The network’s marketing plan is based on a matrix, which you can get into by becoming a shareholder of the project (paying an entrance fee). To stay in the matrix you need to invite 2 partners, but to receive bonuses you will need at least 7.

Official website of the project - auto-club.biz.

A domestic brand offering a wide range of health and beauty products (cosmetics, dietary supplements, perfumes, various personal care products). The network was founded in 1996 and today it is not only one of the leaders in the Russian market, but also operates in 16 largest European countries. The number of distributors in the network exceeds 150,000 people. The company's success is ensured not only by high-quality products, but also by a very good marketing plan, which does not require the purchase of a starter package or any investment. Also, depending on turnover, free training programs, travel at the expense of the company, a personal car and even participation in a housing program are offered.

Official website of the company - siberianhealth.com.

It has been operating since 2006, but only in last period There is active growth of the network. I started using the MLM marketing scheme in 2013. The main products are health products made from seaweed. When comparing network marketing companies in this product category, Werther Organic has two advantages - a more affordable cost and the use of domestic products in production. The marketing scheme for partners includes a discount for distributors, seven levels of leadership rewards, bonuses from team turnover, partnership programs education, housing reform, as well as the transfer of achieved results by inheritance.

Internet representation of the network - vertera.org.

A perfume manufacturer from Russia, producing products strictly in accordance with GOST. Litani has been operating under the network marketing scheme since 2016, offering potential partners three opportunities to become a participant in the system (client, trainee, partner) and two options for generating income (up to 28% for the distributor’s turnover and incentives in the form of a car and tourist trips). Despite the large number of competing companies, in recent years Litani has been systematically expanding and conquering the market, which makes it a promising area for making money.

Official website of the company -.

A network selling a wide range of high-quality household products (ecological detergents and cleaning products, textiles, household appliances, car care products), operating since 1998. Despite the fact that the company is Russian, the products offered to consumers are supplied from European countries and the USA. Currently, there are more than 500,000 distributors registered in it, distributing goods in neighboring countries. A cumulative marketing plan is offered for partners, according to which you can receive discounts and earn money retail sales, apply for a trade loan, and also secure interest payments from the turnover of the attracted team.

A young Russian MLM network, operating since 2014 and characterized by stable growth. The main product is Omegaferol oil, consisting of plant components. Dietary supplements and other products for a healthy diet are also presented. The cooperation scheme offers two formats: linear when collaborating as a client (discounts on products) and binary when forming a partnership (building a balanced network).

To summarize, it is worth noting that the list of network marketing companies in Russia is regularly updated with new projects, which can also be an excellent start for you in the MLM business. On the other hand, before formalizing a partnership, it is important to analyze not only the terms of cooperation, but also the relevance of the product itself with which you will be working.

Top 100 direct selling news 2017– the most significant rating for network companies. This event is awaited by many companies around the world - why?

The annual DSN Global 100 ranking is compiled by Direct Selling News magazine. A reputation for positive industry reporting has made DSN magazine a trusted journalistic resource for the direct selling industry. Since 2004, the magazine has focused on the positive stories of direct selling companies, including the opportunities provided to millions of independent entrepreneurs, products and services that have helped change the lives of consumers, and the philanthropy of industry members who have consistently reached out to those in need.

Top 100 dsn 2017 is a list of the most profitable direct sales generation companies in the world for 2017.

This indicator is very important and shows the stability of the company, their growth and development.

You can also get acquainted with the best system for building an MLM business in the CIS and EUROPE

A system for building large structures in the MLM business. Information from practitioners! Click to find out...

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 it 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 the sale food additives. 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 network business with 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.

Partner is individual, which enters into a cooperation agreement with the 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 the participant for more than high level(1st stage), 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 intermediate 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 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 client 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

From the right choice The employer depends on your network income and confidence in stability.

First we need to consider possible options business space of Russia.

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. Get ready to meet a huge women's team, and find your place in it. Networking activities at AVON are more suitable for girls.
	~30	Marketing area – cosmetics, souvenirs, healthy eating. 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 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.

Only one thing can be said with 100% confidence - it is possible to make money working in the MLM system and you cannot argue with that.

A completely different question: will you be able to do this?

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Hello, dear readers of the online financial magazine “RichPro.ru”! The topic of today's material is network marketing (MLM): what it is, which MLM companies in Russia have a high rating, how network business works, and so on.

After all, for many centuries the model of distribution of goods and services “ manufacturer – large wholesale – small wholesale – retail – buyer"was the only possible one.

ButV30's years XX century The product distribution system was born in the USA and subsequently developed. manufacturer – distributor — buyer».

At the same time, the activities of MLM companies long years surrounded by various rumors, comparisons with financial pyramids and ambiguous public opinion. Based on this, for an objective look at this type of business, you should consider in more detail all aspects and nuances of network mlm marketing.

So, from this article you will learn:

• What is MLM - the history of the network business industry;
• The main advantages and disadvantages of network marketing;
• Which MLM business network companies are the most popular (ranking by sales volume in the world).

After reading this article, you will decide for yourself whether it is worth engaging in network multi-level marketing, find out which companies are better to choose and why, and read reviews from “experienced” mlm marketers.

What is network marketing and how does it work, what is the scheme of cooperation with MLM business based on, what MLM companies have high rating and much more, read below in the article

Network marketing is a system for selling goods and services from manufacturer to buyer, which is carried out through recommendations from person to person.

The essence of MLM business is in non-store retailing, in which the distributor independently establishes contact, advertises and sells the product to a potential buyer.

In addition to earnings from retail sales, the sales agent offers consumers, for a percentage of sales established by the company, find new buyers , which “attract” new customers under similar conditions. As a result, a multi-level network is formed.

Network Marketing Objectives

• Product pricing optimization. Before 70% The retail price of everyday goods consists of the costs of the distribution network and advertising. Changing the distribution structure allows you to reduce costs.
• Providing customers with high-quality, authentic products. With traditional product promotion, there are obvious prerequisites for the appearance of counterfeits on the market, but in the direct sales method they are absent: the product is not as widely known as analogues from the traditional market, the manufacturer, distributor and buyer are not interested in the appearance of counterfeit products.
• Improving the product delivery system. The manufacturer's control over the logistics and storage of goods allows us to provide the consumer with a product of appropriate quality and in optimal time (read the article at the link).
• Improving the distribution of profits of the manufacturing company. Reducing costs allows you to direct financial resources on incentive programs for sales agents, various bonuses and incentives, as well as improve product quality.

Below we will consider the principle of network marketing.

2. How network business (marketing) works - the operating principle of MLM companies 🗺

Multi-level marketing is the interaction of a manufacturer, an entrepreneur and a buyer.

How multi-level network marketing works - 3 sides of profitable cooperation with MLM

2.1. Network marketing from an MLM company

The MLM company produces products at its own factories. It also develops a marketing and sales plan, based on which revenue from product sales is distributed.

As a rule, a business plan motivates distributors in several areas:

• a) consume the products themselves;
• b) sell goods to customers;
• c) create a network of entrepreneurs.

Manufacturers organize delivery of products to their own warehouses in different countries and cities, and also ensure that distributors receive goods at home.

For proper efficiency, entrepreneurs receive all the necessary materials on products, master classes and seminars are held aimed at developing a variety of skills.

2.2. Network marketing from the consumer side

A distinctive feature of the direct sales method is the creation of convenient conditions for the buyer:

• Delivery. Entrepreneurs, as a rule, deliver goods to their homes.
• Service. Before purchasing, the buyer receives all the necessary information about the product. Also during operation it is possible to consult with the distributor.
• Quality guarantees. Most MLM companies guarantee the quality of their products, with the possibility of a money back full size if the client is dissatisfied.

2.3. Network Marketing from the Entrepreneur's Side

Multi-level marketing - a very attractive type of activity for people who do not have large initial capital and business experience.

An entrepreneur has the opportunity to independently plan his employment based on his capabilities. Students, housewives and retirees are most involved in this type of business.

Some terms and definitions used in the network marketing business:

Distributor - a sales agent who has an agreement with a direct sales company and receives a remuneration for product sales, as well as a percentage of commissions for the turnover of the network created by this entrepreneur.

Sponsor (partner) of the 1st level – a sales agent who introduced the consumer to the possibilities of this business and helped to conclude an agreement with a network marketing company.

Sponsorship (affiliate) line – a list of entrepreneurs directly interested in the success of the distributor’s activities, which includes a 1st level partner, his sponsor, etc.

Side Entrepreneurs – a set of distributors that do not belong to either the sales agent’s subnetwork or the sponsorship line.

Bottom line partners – a list of agents included in the distributor’s network.

Organization width — a set of partners of the 1st bottom line.

Depth of organization — all agents of the 2nd and subsequent lower lines in the distributor’s subnet.

Active income – monetary reward for work performed by a person. Income depends only on the quantity and quality of labor invested.

Passive income- profit received by a businessman constantly, for one-time work performed. To obtain this income, a prerequisite is the presence of assets, which can be real estate, bank deposits, shares, etc.

8. Advantages and disadvantages of network marketing - an overview of the main disadvantages and advantages of the MLM business 📃

MLM business has a number of advantages and disadvantages. The assessment of this type of activity in the media, among reputable businessmen and politicians varies greatly.

Advantages of MLM business and its advantages

Let's consider the main ones:

1. Low barrier to entry into the market. When opening any business, an entrepreneur evaluates the resources he needs to start in the market. In a direct sales business, you need little money to start your own business. There are also no costs for renting premises, warehouses and other fixed costs.
2. Possibility of doing business on the Internet. Since the end of the twentieth century, more and more consumers, manufacturers, and businessmen have been making purchase and sale transactions on the World Wide Web. Doing business online is an undeniable advantage of business.
3. Product quality. Thanks to the peculiarities of MLM marketing plans, companies have the opportunity to allocate large sums for the production of quality products compared to competitors who use traditional marketing to promote goods.
4. Training programs. To develop the skills of sales agents, direct sales companies introduce training programs that include books, CDs, seminars and a variety of trainings and presentations. This information allows you to develop not only in sales, but also contributes to personal growth, improvement of family relationships, etc.
5. Part-time employment. The opportunity to work in your free time and at the same time have income from your main activity.
6. affiliate program. The sponsorship (affiliate) line is interested in the success of the distributor. More experienced partners support, help and advise newcomers in every possible way. Relationships are built on equal terms, regardless of income.

As you can see, there are significant advantages for which you should start this business. We also suggest you read the article “”, perhaps you will find useful information there.

Disadvantages and disadvantages of network marketing

Let us now consider the main disadvantages:

1. Reputation. Due to the lack of restrictions and selection of agents, sometimes new entrepreneurs conduct business incompetently: they impose products and the business itself, give false information and this compromises this type of activity in every possible way.
2. High likelihood of deterioration in relationships with friends and family. The majority of the population prefers to work for hire. If you run a business without an office, warehouse or employees, friends and relatives have a negative attitude towards this business.
3. Slow or no business growth. As a rule, an entrepreneur receives the first significant results within a period of six months to two years, subject to systematic work and training. A very large number of distributors have not been successful in this business.
4. The vast majority of proposals for cooperation are rejected. With active participation in building a business 80 — 95% of the work does not bring results.
5. Only a few entrepreneurs achieve significant success. On the path to success, a sales agent encounters many difficulties, which require perseverance, education and self-improvement to overcome. Not everyone is ready to overcome all possible obstacles.

Above we presented the main disadvantages and disadvantages of cooperation with MLM companies.

9. Rating of network companies in Russia - list of the most popular MLM companies 📑

The first mentions of network marketing in Russia are dated 90s of the twentieth century and are associated with the company " Herbalife" The company's products were rapidly distributed throughout the country. Tempted by the possibilities of new business, thousands of people decided to cooperate with this organization. Expecting quick success many distributors suffered collapse , attributing to the fact that the activities of this company are illegal .

At the same time, many financial pyramids have appeared in our country that have an external resemblance to MLM companies. All this affected the reputation of this type of activity.

Despite these factors, the direct sales business in Russia has grown significantly in the coming decades.

By the beginning of the new millennium, all the global leaders in network marketing were present on the Russian market.

In this table you can consider the most popular network companies in Russia.

The table shows that the world leader in this industry is the company “ Amway"in Russia it ranks only third in terms of sales.

Corporations have the largest market share " Avon" And " Oriflame».

Is it possible to make money in MLM, what do you need to make money in network marketing?

10. Is it easy to make money in network marketing, and what is needed for this 💰

Due to its advantages, network marketing is quite popular view activities.

According to the Russian Direct Selling Association based on the results of the last five years 6% population was employed in business based on multi-level marketing.

Distributors' earnings vary significantly, which do not depend on the level of education, profession, number of children, marital status and other factors.

A small percentage of sales agents achieve results quickly and easily. This is because success requires knowledge and experience.

To achieve significant results in business, you should follow the following tips:

A dream is the main factor that allows an entrepreneur to overcome difficulties and achieve success. To maintain motivation, you should “break the path to your dream” into intermediate goals.

A sales agent must realize that the result of his activities depends only on his efforts and dedication to the business.

Tip 3. Learn and develop

Most network marketing companies have training programs. They include business literature, CDs with recordings of speeches by business leaders, and training seminars are also periodically organized.

To be effective, you should write a list of your acquaintances in a notebook and update it periodically.

Tip 5. Present business and product

Based on the list, you should “get in touch” with potential partners or clients. The number of presentations influences the final result.

Tip 6. Consult sponsorship line

It's better to learn from other people's mistakes. Top line partners have more experience and are always ready to help the distributor, as they are personally interested in the success of the entrepreneur.

Tip 7. Build a business based on the developed strategy

A stable, long-term result can be achieved only if there is a balanced development of the “width” and “depth” of the structure.

Tip 8. Repeat the actions and methods of achieving success used by higher-level partners.

It is also worth noting that downline partners also observe the distributor and will repeat his actions.

11. FAQ - answers to frequently asked questions

Before engaging in multi-level marketing, potential distributors have a number of doubts and questions.

Question No. 1. Should a beginner start?

It's worth it, but you shouldn't expect quick success. No risk of being in the red, small initial investments, high quality educational programs, help from partners - factors that can influence success.

Question No. 2. How to make your first money in network marketing?

When starting cooperation with a “network” company, sales agents strive to do so as quickly as possible. The activity should begin with simple retail sales.

Buying a product at a wholesale price and selling at a retail price - distributor makes money . First of all, products should be offered friends, relatives and acquaintances, since they will be more loyal to an inexperienced seller, and in the future they will be able to become regular consumers or business partners.

Question No. 3. Network Marketing: Is it Legal?

The direct sales business is a legal activity, which is confirmed by the very fact of the existence and development of these companies for decades.

Many illegal structures disguise their activities under the guise of network marketing companies.

Important! The potential client is asked to deposit an initial fee, pay for mandatory training and purchase a minimum quantity of goods. This is accompanied by the absence of receipts and invoices confirming the purchase of products or the provision of services.

Also the consumer should alert poor quality goods or lack thereof.

Network companies offer good quality products and do not require significant financial investments to open their business.

Question No. 4. What reviews does network marketing have - is it possible to really make money from it?

There are many different reviews about network marketing on the Internet.

Here are some of them:

Review 1."At first 2000s a colleague at work suggested trying the company’s products “ Oriflame" I really liked the product and became a regular customer. A couple of months later, she invited me to become her partner in business and told me how to make money.

At the first stage, I managed to have a fairly large income, but then everything changed. I am raising two children alone, and as my network grew (at that time I had 34 people on my team), it became increasingly difficult for me to combine household chores and business.

As a result, income began to decrease, and at a certain point 12 people “left” my network. Later, I decided to switch to the classic business. In order to have big success in this direction, a lot is needed ambition, determination and activity. One girl from my structure achieved great success in " Oriflame" I don’t regret anything, the knowledge and experience gained at that time allow me to now successfully do my business.

Olga, Samara»

Review 2.“In the second year of university, our stream was “swept by the virus” of network marketing. Earning opportunities from " Faberlic” fellow students discussed everywhere. I've never been a fan of sales, but I still decided to give it a try.

Over time, I realized that it’s hard to make money in this business; the bulk of the income from your turnover goes to your higher-ranking partners. To achieve success, you must be able to sell products.

I do not advise anyone to engage in network marketing.

Alina, Rostov»

Review 3." IN 2009 I had to close my own business and ended up owing money to the banks $40,000, of which 2 000 it was necessary to pay every month. I urgently needed to get out of this situation. I was looking for a solution, I considered various options earnings.

Unexpectedly, an old friend, whom he had not seen for many years, approached me with an offer to do business in collaboration with the company “ Amway" At the presentation, he told me about the possibility of decent earnings in a year or two. But I was told as quickly as possible that I should focus on personal sales of expensive products that have a significant margin. So I started in business by selling water filters and cookware sets.

I have enough wealthy friends and, to get out of my situation, I had to actively promote the products. During my first year in network marketing, I spent about 2-3 meetings with clients, and on weekends - 6-7. The result was not long in coming - I paid off my debts and, without actively “attracting” partners, achieved 9 – 12 % levels of achievement.

Next, I studied the company’s marketing plan in more detail and began to more actively develop my own network of distributors. On this moment I'm on the level Platinum Independent Entrepreneur.

I agree that making money in this business is not easy, but if you have the motivation, then anything is possible.

Andrey, Peter»

Question No. 5. How to distinguish network marketing (MLM business) from a financial pyramid?

Most lead their illegal activities under the guise of direct sales companies.

The table shows comparative characteristics these organizations.

Question No. 6. How to choose an MLM company to start?

Beginners who consider the direct sales business to be a suitable activity are faced with the question of choosing an organization for cooperation.

For an optimal solution, a number of aspects should be taken into account:

• Reputation and age of the company. It is better to choose an organization with a good reputation and significant experience in this field.
• Products. The basis of any trade is the product. Its quality will directly affect the result. It is also worth paying attention to the features of the product. It is important that it ends after some time, and clients turn to the sales agent again. The diversity of the product range is also a significant factor when choosing a company.
• Tutorial. The education system has a significant impact on business success.
• Availability of the company's business on the Internet. Not being online significantly reduces opportunities for business growth.
• Business plan. It is important to evaluate the company's marketing and sales plan against the criterion of fair distribution of the organization's profits. You should also find out if there are restrictions. The best type of business plan is " multi-stage plan with compartment».

Question No. 7. I want to try myself in network marketing at Oriflame, Faberlic, Amway - what do I need for this?

In order to become a distributor of direct sales companies, it is necessary to draw up a cooperation agreement with this organization; the age of the applicant must be at least 18 years old.

To register an agreement, it is necessary for the newcomer to have a sponsor who will help prepare the documents.

12. Conclusion + video on the topic 🎥

In recent decades, various methods of product promotion have been rapidly developing in Russia, one of which is network marketing. Despite its controversial reputation, this method of trading has become convenient and popular among customers.

Possessing thorough information about what constitutes direct sales business , the consumer can make the optimal decision about its use - to access quality goods that are not available in retail stores, earn extra income or develop your own network business with the prospect of significant income.

In conclusion, we also suggest watching an interesting video about online business: