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Network marketing: pros and cons  29.05.2009  Lola Pirhal  35 comment.
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Network marketing.
Almost everyone has heard this term today, but not everyone knows what it is in practice.
For reference: according to the glossary (http://www.glossary.ru), multi level (or network) marketing is a form of conducting
out of store retail trade, in which the sales agents (distributors) of the company-
Recent blog entries
the manufacturer is installed as
contacts with potential buyers.
Simply put, network or multilevel marketing means the delivery of goods, information products or services from the manufacturer to the consumer using a multi level structure consisting of distributors.
Today you can often hear a tempting offer:
find your favorite thing: step by step instructions On the pages of this blog, we have already talked about how to [...]
"Own business without
How
material investments!
Unlimited opportunity to earn money! "
Or:" With our company
excuses and
You will become a millionaire!"
Any,
excuses
hearing this, he will think: "Well
they destroy it
then not all people are rich, once they become
our
is it so easy to become a millionaire?
Only
future
money is being siphoned off…"
I read it the other day
On the one hand, the author of these words
sunny
will be right: companies that profit from
eclipse 20
on the trust of people and
martha (You [...]
information about
it is enough to fake SM systems, but today we will not talk about how to distinguish a "scam" from real network sales companies, but about how to understand whether you should try to earn money in this way and
Taffy: Human like That's how
how profitable it is in general.
We
it's started.
let's analyze all the pros and cons of this
"God said:
the system.
I will create a man by
Network Marketing history But to begin with, SEE a little history.
It is inextricably linked with the name of the American Karl Renborg (1897-1973), whose realized ideas turned into a multibillion dollar network marketing industry.
In the United States of America, where Renborg found himself in 1927, he began to create various food additives, the basis for which he chose alfalfa, which contains many vitamins, minerals, protein and other useful components.
Renborg offered the drugs created on its basis to his friends for testing, distributing the products for free.
There were no results - no one tried the obtained dietary supplements.
Then Karl began to take money for them, realizing that nothing free is valued.
The results immediately appeared, and the most positive ones.
Information about useful additives was widely distributed (each of Renborg's acquaintances had many of their own acquaintances), people asked Renborg about meetings to get more information about the new product.
Karl, of course, could not satisfy all the requests.
And then he came up with a brilliant idea.
Renborg invited his friends to give information about food additives to their friends themselves, and in case of a successful sale, he promised to pay a commission.
He decided to pay also to those acquaintances of his friends who, in turn,will promote his product further, using their own connections.
This is how network marketing was born.
the stereotypes are wrong.
This is sometimes more important than any professional techniques in business.
Oksana Lutchenkova
In 1934, Karl Renborg founded the company California Vitamins and, thanks to a new sales system, when consumers of the product became its distributors (distributors), the company quickly reached a turnover of $ 7 million, without investing a single dollar in advertising.
In 1939, Karl Renborg renamed his company Nutrilite Products, retaining the principle of distribution of food additives.
His employees themselves invited newcomers to work, gave them the necessary information about the product and invited everyone to build their own network, inviting their friends to the business.
The company provided all distributors with its products and paid each a commission not only for the goods sold by himself, but also for each sale made by a personally engaged distributor.
Thus, Renborg introduced "single level marketing"into the practice of classical business.
The further history of SM is connected with the names of Nutrilite employees Rich De Vos and Jay Van Andel, who, after ten years of successful business in the structures of Renborg, in 1959 created their own company called American Way Corporation, abbreviated AMWAY.
The merit of these people is that, firstly, they went beyond the implementation of only one product, including in their assortment, in addition to food additives, household household goods.
Recent commentaries and Lola
Pirhal: ))) Actually, with any.
If in the short term... alexey
Pros and cons of network marketing Pros of Network Marketing Like any other, this type of business
cupricov: Lola Hello!
Please tell me, for today ...
business has its advantages.
Of course, any distributor can successfully tell you about this
Andrey: Article
any network company.
But, in-
motivates....
first, I'm afraid that his story will be embellished with facts that are beneficial to him, and secondly, he will never
he will tell you about the disadvantages of working with his company.
I want to give you proven facts about why it is profitable to work with such companies – than I will immediately answer the question why network marketing still exists.
Victor: Good afternoon to all!
I agree with the fact that in the network market...
1. The possibility of unlimited
anna:
earnings.
Theoretically, this phrase is true, but in practice everything depends on the character of a person and his
Thanks for
the desire to earn money.
Moreover, as
a useful test....
as a rule, those people who are not looking for easy ways to earn money achieve greater success.
Yes, and this is despite the fact that most people are attracted to network marketing precisely by the ease of achieving what they want
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riches!
If a person is ready to achieve this goal, earnings are really not limited to anything: the more products you sell, and, most importantly, the more other people you can attract to your team, the more you will earn.
And no restrictions!
The most important thing in this business is to build a large, cohesive team, which in itself is not difficult if a person has at least some organizational skills.
And if not, then usually a lot of trainings are held in companies, which are designed to help such people.
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65%
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approximately
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I. e.
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approximately
every ninth resident.
In
Japan
volume
sales of goods through CM reaches 90%.
There are more than 700 network companies operating in Europe, and more than 800 in Asia Minor.
Network
marketing
become
use the largest
and companies,
such as Ford, Colgate, Canon, Lipton, Coca Cola and many other flagships of the business.
2. Financial independence.
One of the main arguments for SM is called this factor.
It sounds very attractive to many people.
But not everyone fully understands,
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what this phrase hides behind itself.
By it, distributors understand independence from the employer or from parents and relatives, if it is a young boy or girl.
But this phrase does NOT mean that you will be completely protected from financial adversity and will not depend on life circumstances.
It all sounds like this: "Yes, you will be given the opportunity of unlimited earnings, which thereby does not put you in the framework of the official salary and gives you financial independence in front of your parents and society."
In fact, the meaning is somewhat different: "Yes, you will be given the opportunity to earn as much as you can, which thereby does not put you in the framework of the official salary and gives financial independence to parents and society."
And as you know, every person has different opportunities.
And here the advertising slogan will be really true: "Find out the power of your abilities!"
3. Own business.
"Donot you really want to use the unique opportunity to start your own business without investment?"- the distributor will ask you in a surprised and, again, tempting way.
Here he is really right: there is such a possibility, only the distributor does not say something.
First, the business will become a business not earlier than in a year, when you will compile and promote your recruitment and training system
people in your team – which, in principle, is similar to drawing up a business plan in a classic business.
Secondly, the phrase "without attachments" is not quite accurate.
It would be better to say "without significant investments".
But more on that later.
4. A close knit team.
You canot argue with this advantage.
In network companies, a lot of attention is paid to training and training, which is not always found in companies that do not use CM.
Simply put, by joining the company, you, along with the products, also get a personal teacher who will help you in everything and guide you on the right path =)))…
The main motto in network companies: "I learned it myself - teach it to another!"
And you get those managers who have already achieved some success themselves as teachers.
And in general, as a rule, all the people in the team are quite friendly and ready to help a beginner.
Disadvantages of Network Marketing And now about the disadvantages.
Namely, about those tricks in the CM that most often frighten a beginner and leave negative, and sometimes even categorically hostile, impressions about the network business.
1. Instability of earnings.
No matter how high the distributors promise you, they will still not be high for at least the first 2-3 months in the company.
For this period, such earnings are suitable only as a side job.
Because
it will take some time for you to train and recruit the necessary people in your own team (as well as your product customer base).
And for each person, this period is different.
Someone is extremely sociable and has good organizational skills, which gives him the opportunity to acquire his regular customers in the first month, and in the second to train several people in the same skill and get a good income.
And someone, on the contrary, is very shy and prefers submission, and his training can take a long time.
If, of course, this person is patient.
If not, then he will become one of the opponents of SM, claiming that it is impossible to make money on this.
But, on the other hand, there is no business in nature that made a profit in the first month.
2. Moral burden.
This point is the main reason for leaving the network business.
Not everyone can withstand the constant pressure from customers (and they are often not quite adequate, because many have already formed the opinion that they are always trying to "sell" something, and it will take some effort to destroy it), as well as from the distributors you train and even your teachers.
Since it has already been said about clients, I will tell you what is difficult in training people.
Usually the team takes
people of almost all ages, and each age needs its own approach.
Young people, for example, listen to your instructions inattentively, and it is worth a lot of work to explain to the student why it is necessary to do this, and not in another way ("simpler"), and why all these subtleties in communicating with clients.
But the older generation, on the contrary, will listen carefully to everything that you tell them, but... will not believe it.
After all, in their opinion, they have a rich life experience, and they have already learned everything that is possible…
There will also be a load on the part of your teachers, because first you will be taught yourself, and something may contradict your habits and principles.
3. Unavoidable material investments.
Yes, investments, despite the phrases "Own business without investments", will really be required.
The only difference is that it will take several thousand dollars to establish a business according to the classical scheme, and in network marketing – from 100 to several thousand rubles.
4. Responsibility for others.
Some people prefer not to be responsible even for themselves, let alone for others.
But the whole system consists of a team, in recruiting your own assistants, training them; and then they will recruit their own, etc.
By training people, you will to some extent bear moral responsibility for those whom you have attracted and whom you have undertaken to help.
And
if you are not ready to be a mentor to the end, despite the character of the student and the difficulties of his training, you should not take up this case.
You can only earn money by selling products, which, however, will bring less income.
Сетевой Network Marketing: pros and cons ♎ Network marketing has its pros and its cons.
It is a personal matter for everyone to determine what is more important for him Сетевой Network marketing Pros and cons of network marketing In conclusion, I want to say that the main qualities of a successful SM leader are sociability, organizational qualities, purposefulness and patience.
The presence of these qualities can affect your success in this business.
And the more developed they are, the higher your chance to succeed, respectively.
What is network marketing for you?
Deception or the greatest opportunity?

Tired of listening to refusals?
Tired
work
using grandfather's methods?
Then
simply
put it on
your business on the machine!
4.40/5 (88.09%) 47 votes
P.S.
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Thank you in advance!
Lola Pirhal
Сетевой Network Marketing
Lola Pirhal I help people to make life easier and richer.
Interests: leadership, personal growth, personal branding, brand blogging, e mail marketing, Network marketing 2.0
 +38 067 7923605  kartauspeha.ru  B
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Comments - 35
Sergey 2012-09-25 at 16: 09
Of course, there are disadvantages in network marketing, but I still found more advantages, there is an opportunity to develop creatively.
To answer
Victor 2013-02-09 at 3: 45
Yes, that's right.
The only thing I can disagree with is that this is "my own business".
Cooperation with any MLM company is a private business for the owner of this company, but not for the distributor.
Why?
Give an answer to the question: "What will happen to your business if the owner decides to close the company?".
I think you understand...
To answer
Lola Pirhal 2013-02-09 at 9: 36
Victor, and in traditional business, the owners of dealer networks are the owners of their own business or what?
And if the manufacturer decides to close down?
Do you think they will cry and commit suicide?
They will have the main thing (in addition to business skills) - a network of connections that knows them as a competent pro.
In the network business, the main thing is not the company, the main thing is the network of connections.
This is an asset of this business
To answer
Victor 2013-02-10 at 3: 19
Lola, did I say that this is not the case in traditional business?
Yes, I totally agree.
I wanted to say that I would not consider "own business" to be one of the advantages of network marketing.
Yes, there is a network of connections, but these people will not always follow you to any company.
To answer
Lola Pirhal 2013-02-10 at 10: 56
And yet, in ordinary life, we call the owners of dealer networks owners of their own business.
Apparently, this term has taken root in the network by analogy
To answer
Dina 2014-10-08 at 11: 58
I agree with Lola.
There are many examples of this, when the leader in connection with the closure of the company or dissatisfaction with the marketing plan or the appearance of a new company with
the best marketing plan goes to this company together with its structure.
All working partners are transferred.
To answer
Artem Yarovikov 2013-05-09 at 14: 14
Lola, great article.
I have only one question about the lines "Network marketing has also been used by the largest companies, such as Ford, Colgate, Canon, Lipton, Coca Cola and many other flagships of the business."
I am interested in surprising the source of information.
Where is it written about this?
In such a case, it is necessary to double check, otherwise the Network Industry Manager has already been recorded in the list of professions of the Russian Federation
To answer
Vladimir 2013-10-08 at 16: 50
And actually Lipton is part of the Unilever Corporation and is not a company but a trademark.
Can you imagine 90 % of sales through CM in Japan?
Transport collapse on the first day of trading....there are many more mistakes here....
To answer
Denis Vogel 2013-06-14 at 17: 30
Since I also support the fact that there are more pluses than minuses in Network Marketing, I will add a fifth point to such a plus as Training in Network Marketing.
Training in independence, the basics of business, leadership and other things that you are unlikely to be taught somewhere for free or almost for free, how and how well it can be obtained from the distributors of a Network Marketing company.
I know a sufficient number of people who now, for some reason, have not made MLM their main business, but have engaged in a linear business, but they always speak with gratitude about the school that they passed thanks to Network Marketing.
To answer
Olga Zhukova 2013-06-21 at 19: 14
There are undoubtedly more advantages!
You didnot say anything about the possibility of developing an international business.
And what are the confessions worth when you take a step by step up the career ladder.
And for people over 40, this is almost the only chance to make a career, in the corporate world, there is no such thing.
To answer
Evgeniy
2013-09-25 at 16: 05
The article is excellent :cool:.
Everything is very competently and clearly written.
But in modern conditions, sociability and leadership qualities are not at all necessary for recruiting partners in an MLM project.
Many teams use automatic recruiting systems (recruitment of partners).
For example, I do such things for my teams myself... and I calmly lead 3 projects.
All you need to do is constantly advertise on the Internet.
There are free methods in which we invest our time.
And paid ones, where investments are needed, but it saves time and turns the system into an almost automatic one...
And this can be done by the way in ordinary business, they also start using such systems and quite successfully.
To answer
Lola Pirhal 2013-09-25 at 21: 35
It does not matter in what environment you are doing business, in real life or on the Internet, communication skills and leadership qualities are necessary.
What you have written is the basics of MLM 2.0, but the network business is not limited to simple recruiting.
Partners still need to be trained, and so that they can also train
To answer
Evgeny 2013-09-26 at 9: 00
I agree with you.
Only working via the Internet significantly equalizes the chances
To answer
Lola Pirhal 2013-09-26 at 9: 16
I would say that it does not equalize, but simplifies it due to the automation of routine processes.
But working with people is working with the same people, in whatever environment this business is conducted.
To answer
Evgeny 2013-09-26 at 9: 41
No, Lola.
It equalizes... with the correct organization of the process by the "senior" sponsor... and you will not convince me otherwise...
To answer
Lola Pirhal 2013-09-26 at 9: 49
I'm not even going to.
According to your
I realized from the blog that you have been doing this recently.
We'll talk in 5 years
To answer
Evgeny 2013-09-26 at 10: 26
My site is really fresh, you noticed it correctly...
But this does not mean that I have no experience in business automation and in managing people...
It's just your opinion
To answer
Lola Pirhal 2013-09-26 at 10: 47
Evgeny, then you need to change the article "about yourself" I have no doubt that you are a leader and a good organizer by yourself, that you understand automation issues, etc.
But the fact that you are only a year in this business can be seen with the naked eye by one detail: You are still sure that everyone is the same as you, everyone WILL BE ABLE to duplicate, everyone IS READY to work hard.
In practice, this is not the case.
Everyone WANTS money, but not
everyone is ready to work, and after 5 years you will understand that the fact that you know how to work with people does not guarantee that everyone who comes to you will do the same.
Your leadership qualities do not make your followers leaders.
Over the years of working with people in the network, both in real life and on the Internet, I realized one thing (and this is confirmed by ALL real network leaders and professional coaches): You will not be able to change a person's self identification, you will not be able to force him to be successful.
Only he can do this, and business automation has nothing to do with it - these are just tools.
Believe me, I know this firsthand.
I have been working with network business automation since 2009, I am one of the creators of the sensational training "MLM on autopilot 2.0", my entire team uses automation, is trained in focus groups, but not everyone reaches the goal.
Why do some people earn money, and others do not?
After all, marketing is the same, everyone has the same conditions in the team, everyone has automation
the same, everyone has the same training.
To answer
Evgeny 2013-09-26 at 11: 37
Lola, go back to the first comment...
In this comment I wrote only that with the system, a person without leadership qualities has much more chances of success in MLM... and that's it.
And you have already reached the "personalities" And decided to measure your experience...
Unprofessionally ...
PS: And thank you for PR
To answer
Lola Pirhal 2013-09-26 at 11: 59
Oh, why didnot you write that there are more chances, you said that these qualities are not necessary at all.
I just insist that without these
you canot build business qualities anywhere: neither in real life, nor on the Internet, nor in a network, nor in a linear one.
Do not deceive people with seeming ease
To answer
Tatyana Salimova 2014-01-04 at 22: 11
This is for sure automation has nothing to do with it, it's only a small part of the system in MLM, everything is much deeper.
"Your leadership qualities do not make your followers leaders." but they should.
that's the secret.
The problem is that the "gurus" are engaged in info business and not building MLM structures and supporting their team.
To answer
Natalia 2013-09-26 at 13: 19
I read the comments...
There was a question: Lola, what do you think depends on whether a person becomes a leader or not on his internal motivation or natural data, character qualities that can not be changed?
Can it be that there is motivation, but there are not enough qualities?
To answer
Lola Pirhal 2013-09-26 at 14: 07
A man will become a leader or not depends on its willingness to take responsibility for their present (to admit that he really deserves what is today and nobody else is to blame) and for their future (to understand what it will be depends on how it will work now).
And, of course, to work hard.
It does not matter whether in real life or on the Internet, in a network or in a linear one.
Where the result is tied to people, you will have to work a lot, and first of all, on yourself.
To answer
Kirill 2014-01-01 at 18: 29
I think motivation is more important..
And the qualities will come..
To answer
Natalia 2013-09-26 at 14: 26
It turns out that the root is in the ability to take responsibility.
But it's true - I began to remember familiar people now: those who do not blame the circumstances, achieve much greater success and feel completely happy.
And they are drawn to them, they are really leaders...
And with completely different characters ...
And those who then he is offended by fate - they will not get out of apathy and bitterness in any way.
I should reconsider some of my beliefs, I feel so))Thank you, Lola, for the answer.
To answer
Andrey 2014-03-12 at 23: 17
Tell me the principle of distribution of commissions in the network business.
If we follow the path of simple interest, then the more dealers there are, the higher the motivation costs and, consequently, the lower the income.
Or there is some kind of formula.
I am not interested out of idle curiosity, I want to extend the principle to my business in the field of providing services.
I will be very grateful, if, of course, this is not a terrible secret.
Thanks.
To answer
Lola Pirhal 2014-03-13 at 10: 48
Andrey, it's not a secret.
It's just that different network companies have different compensation plans.
By "higher motivation costs" do you mean payments under the marketing plan?
They are, of course, not unlimited.
In classical marketing, they are up to a certain level of depth, in binary - only from one branch.
And in what area do you provide services?
To answer
Maxim 2014-03-13 at 14: 26
Andrey, there is some balanced formula that most network companies adhere to, plus or minus some percentages.
Up to 30% is the company's production costs, plus the profit of owners and investors.
From 5% to 10% - the company's costs for working with the network.
From 30% to 40% go to payments to the network, according to the marketing plan, i.e., incentives for business actions (attraction, promotion, training, strategic development).
Up to 30% is the distributor's retail profit.
Of course, this is not a clear formula that everyone adheres to
the company.
There are plus or minus some figures depending on the company's products.
To answer
Alexander 2014-09-30 at 14: 10
MLM has never been a business.
It was invented for the ass headed housewives of the state, who from nothing to do sold each other remedies for senility, obesity and cellulite.
Since all this shit did not help, then a more"perfect remedy" appeared, for example, from the shit of hippos, etc.
Due to the increase in the "assortment", the incomes of these "businesswomen" also grew, sometimes reaching a fabulous$ 25 per year.
In the countries of the former USSR, this" business " is elevated to the rank of a cult by as much as 0.5 % of the population, consisting of scammers who bring unnecessary products and services to the market, and meat, which mostly ends up either in mental hospitals or in sects.
To answer
Irina 2015-02-01 at 17: 25
Thank you very much, Lola!
I'm in the network for the second year and I completely agree with you.
To run your own business and generally work in the field of business, you need to sharpen your patience and continue working when success
it's still far away.
Success does not come immediately and only to those who respect other people, constantly study, are able to set goals and plan, are able to organize their lives in such a way that work and family are also in harmony.
I wish you all success in your good endeavors.
To answer
Yulia 2015-03-12 at 23: 16
Hello.
I periodically write about network marketing.
And honestly.
About mistakes, about the truth.
What you wrote - to the point.
I invite you to my blog http://tvoisposob.blogspot.com .
Network business is also a business and many make mistakes already at the stage of entry .
To answer
Maksat 2015-11-08 at 19: 08
Lola, I'll take care of this case!I would like to find a person who would be my mentor teacher!
To answer
Viktor 2015-12-04 at 12: 37
Good afternoon to all!
I agree that there are pros and cons in network marketing.
Probably the most
a big plus is that in the network business (I mean MLM) - this is the principle:you only grow if you help others.
And that's great!
+ very democratic conditions for starting.
Is it possible to earn income here?
Odnozna
