Very often in the vast expansesthe emerging market industry can hear the term "network marketing". What is it, what are the features of the concept, how does it affect the performance indicators of companies - issues that are not only interested in business sharks, but also those who are trying to start their own business or are simply looking for sources of income.
You can find out the answers, as well as reviews of the owners and employees of companies who were able to successfully use the principle of network marketing in their work, from the article below.
What is network marketing?
Multi-level, or network marketing (MLM) -it is inherently a specific process of product realization, for which direct contact of the manufacturer with the buyer is used. This process can be carried out either directly or through a trained distributor. Its distinctive feature is the fact that through this communication it is possible not only to realize the necessary products, but also to attract other interested people to work.
The payment scheme is absolutely open.- money and benefit is received not only by the distributor, but also by all who pass through the goods in this chain. At the same time, earnings are official, real and depend only on the number of goods sold. While, for example, in the case of the financial pyramid, with which network marketing is often compared, the pros and cons are not so obvious, because in this case, the money is received from the investments of other participants, and their timely issuance is not guaranteed at all.
Advantages and disadvantages
Как и каждая концепция, МЛМ-структура не лишена their positive and negative sides. You can highlight all the pros and cons of network marketing by examining the impact of this business scheme for each individual structure - companies, employees and consumers.
Benefits for the company:
- the possibility of unlimited earnings;
- no advertising costs;
- no cost for renting premises for shops;
- no cost for the delivery of goods;
- minimal interference from public services, lack of documentation.
The last item may also apply.introduction of minimum tax duties. Due to the fact that products fall directly into the hands of the consumer, and not through stores, it is extremely difficult to control the volume of sales.
What are the benefits for employees of MLM companies?
Trained and satisfied with the terms of earningsDistributors are the key to successfully building a business for MLM companies, so when working with your team, management offers the following prerogatives to it:
- the possibility of unlimited earnings (as can be seen, both for the company and for employees, this item is common and fundamental);
- financial independence i. the possibility of carrying out activities without constant pressure from the employer;
- the possibility of raising their own business with minimal investment, regardless of age, education;
- availability of flexible convenient work schedule;
- continuous improvement of personal qualities.
Improper organization of the work process - a disadvantage?
Cons of network marketing are observed ifThe head of a corporation or in a team includes people with missing experience. In the course of activity, they can stop workflows, adversely affecting the level of sales. There are several reasons for this:
- high staff morale on the part of customers and other distributors;
- earnings instability (sales levels in different work months can bring different profits);
- psychological pressure due to feelingresponsibility for the rest and lack of organizational skills, as a result of a large staff turnover, unsatisfied with the quality of the work process.
What are the benefits of the MLM principles for customers?
For the consumer, the pros and cons of the networkmarketing lies in completely different features. For example, a disadvantage may be excessive obsession on the part of the distributor in an effort to arouse the interest of the buyer and, in the event of a refusal, invaluable time spent for those and others. The advantages are in the following factors:
- saving time on shopping trips;
- full awareness of the quality of the proposed product;
- control of financial expenses;
- buying goods is cheaper thanks to bonuses, discounts, sales;
- You can order and receive goods at any convenient time of the day.
Также благодаря концепции МЛМ появилась the ability to visually compare, check the compositions, share their opinions, earn money, receive recommendations on the types of goods being purchased. Ratings can also establish how the pros and cons of network marketing affect business efficiency and customer activity.
What is a rating, what value does it have for network marketing
The rating itself is a peculiar kind.evaluation of the performance of a particular activity. To compile it, you need data that can be obtained through social surveys. This is done by special companies that process the information received and transmit it to customers for further use.
In the process of data processing become clearall the pros and cons of network marketing, used for the development of a particular company in a particular region to promote certain products. The results obtained also make it possible to trace and record the financial results of corporate activities, as well as apply new strategic tactics for the development of business in the development of a company’s business.
Rating network companies
Separate item for ratings allowingtrack how effective network marketing is - companies that can be listed for both the international arena and for each individual country or region individually. The data included in the structure of these top ratings characterize how the product being sold is attractive to the consumer, how changes in the internal structure of the company or the introduction of a new product affect sales, etc.
In this case, the rating iscompetitiveness in the modern market and how the company has grown financially over a certain period of time. Also, the data obtained on the basis of lists of companies allow us to give a complete detailed analysis of financial opportunities in the future, to understand what to do in order to double / triple the indicators in the future.
List of MLM companies in Russia
Below is a list of largedomestic, applying effective network marketing company. The list of Russia is based on their activities for the annual period and includes various economic, technical, cultural and social factors. The top 5 leading network companies with a high percentage of sales and profit growth for 2015 include:
- Avon Prod. Inc.
- Amway Corp.
- Oriflame Cosmetics SA
- Mary Kay Inc.
- Faberlic OAO.
If you compare the same top list withindicators, for example, in 2012, there will be a noticeable tendency for a decline in the growth of sales from the company Oriflame (in 2012, it took the 2nd place). To summarize, the economic crisis has affected the decline in sales for all companies without exception. However, Avon Corporation was able to retain its leading position: its sales volumes, as before, make up one third of the perfect turnover of all listed companies. This means that as a result of the rating research conducted, Avon is one of the most competitive and promising network companies in the Russian market.
How to influence the increase in sales and ranking
Naturally, with complex economicsituations out of the difficult financial situation of companies is to encourage employees to increase sales. This is called "motivational network marketing." What is the essence of this program? It allows the company to move up the top list at the expense of additional financial support for the employee and building his own profit scheme by attracting third parties.
In other words, in such cases, a reward is entered:
- for the sale of large volumes of products;
- for attracting additional employees who will realize a large volume of products and search for a new customer base.
It is verified that the given network mappingmarketing allows you to significantly increase the growth of company profits and recoup costs. And for this you just need to get an easy additional income and effectively present your product to the buyer. That is why the number of people involved in this business structure is already more than 6% of the population of Russia, and these figures are growing from year to year.
How to avoid becoming a victim of network marketing hype and succeed in it
Naturally, to achieve success in the MLM businessnot everyone can do it, but there are 3 rules, guided by which you can avoid fraud and financial failures and comprehend the principle of network marketing:
- компания должна быть обязательно зарегистрирована (it is possible to check the firm’s belonging to the stated association using the rdsa.ru resource), this significantly increases the trust factor of the company and is an indicator of its official activities;
- for employment, you must choose a companywith a high sales rating, which occupies a leading position in the modern market, is the key to its success, effective self-improvement, and hence prospects;
- the maximum manifestation of active personal qualities (ability to work, desire to learn, improve their communication skills and beliefs), the position of a leader is the key to success in the conduct of the network business.
Главное - помнить:the buyer must have a true impression of the company’s business. It should not resemble the unexplained confusion, scam or financial pyramid. Everything should be as transparent as possible, to exactly meet the stated requirements.
Reviews of active users of the MLM concept
Allow to better understand how the network works.marketing, what it is, reviews of those who are faced with the principles of its work. Many employees of such companies noted difficulties in the initial stages of familiarization with this method of doing business. This was connected not only with the process of mastering a large amount of information, but also with the emerging sense of alertness.
To cope with all prejudices as wellit is easier to delve into all processes through the availability of seminars, lectures, trainings, ready-made catalogs, which detail the features of the products offered, the company's policies and financial plans. Such periodic consultations help develop the skills necessary for the job, become more confident.
By the way, thanks to the feedback from the staff of suchSince the beginning of 2014, the MLM concept of network companies has ceased to be perceived as a means of deception, but is considered solely as a proven source of income, the effectiveness of which depends on personal qualities.
Tips for beginners
Based on all the reviews, you can successfully build your career, guided by the principles of network marketing, if you have:
- an experienced mentor;
- desire to develop;
- a good product, confirmed by a certificate of quality;
- decent wages;
- cohesive team.
Можно найти бесчисленное количество как positive and negative opinions about how network marketing works. There are pros and cons in each of the business methods. The main thing is to draw the right conclusions from all of the above, rely on the already existing experience of our predecessors, skillfully take advantage of the knowledge gained and successfully implement them.
