Network Marketing – what is it and how to make money on it
The Internet offers users many options for earning remotely without being in the office. Today we will talk about network marketing. What is it? Network marketing (MLM) is a kind of sales system based on the addition of new agents who not only sell goods, but also attract other people, for which they receive money.
The number of people in such a business can exceed tens or even hundreds of thousands. But what nuances are hidden under such “transparent" earnings?
Who can become an agent
Anyone can infiltrate the field of sales and become an agent. You do not need to have skills or special education for this. Even schoolchildren can work in marketing, as there are no age restrictions (unless selling goods for adults).
Nobody sets a specific schedule. You can devote 2 hours a day or 8 – at the request of the agent. MLM business involves remote work, which can bring both the main income and additional. However, in the beginning, networking will not become the main one.
The agent must have personal qualities, such as sociability, stress resistance, patience. The seller will need a lot of time to communicate with people of different characters. Therefore, initially it is worth evaluating your capabilities and abilities, and only then becomes a network marketing partner.
What you need to have for work
To work in network marketing, you must have constant access to the Internet and a personal computer. Of course, you can try to do sales and search for agents from your phone or tablet, but it will be very slow and hardly productive.
It is worth noting that communication with customers takes place through correspondence in chats and social networks. Writing messages from the phone is inconvenient and not as fast as it can be done on a desktop computer. Therefore, if you do not have a PC, think about whether you can do the necessary amount of work from other gadgets and get paid for it.
An additional plus will be the presence of promoted accounts in social networks. If you have pages on VK, Facebook, Odnoklassniki or Instagram, it will be much easier and faster to attract customers. If there are no such accounts, but you have firmly decided to go into the MLM business, register on these sites as soon as possible.
What is network marketing compared to?
Even 10-15 years ago, sales of cosmetics were popular. More often these were sales of Oriflame and Avon. Then even the lazy tried to earn money on this business and climb the career ladder.
Work consisted in the sale of products according to catalogs, which were issued in specialized offices. The agent had an income from the price difference. As a rule, the amounts were small, however, having “stuffed” the client base, a good monthly income came out.
With the advent of the Internet, which everyone uses, it is much easier to sell products. You can not only offer goods to relatives, friends and work colleagues, but also find buyers on the worldwide web. Of course, the income of networkers began to grow, because the number of consumers increased tenfold.
Is it profitable to be an agent
Let’s see how you can make money in the network business. So, the seller receives money for selling products through catalogs. The price in them is higher than the purchase price. This difference is the source of income. Sometimes the agent is paid bonuses. This is a monetary reward that is issued for the achievement of specific goals. For example, these are large volumes of products sold or a high total amount of purchases.
Sometimes, in order to become an agent, you need to skimp on a certain amount or purchase a specific individual product. Even if the company does not require it, it is still profitable to be a seller, because it becomes possible to buy products at a reduced price, plus increase the total bill for yourself.
Note that it is also beneficial to register on thematic forums to attract agents. In such places, they are actively discussing ways to earn money. As a rule, most potential agents are located on such sites.
Benefits for business owners and consumers
It is profitable for companies to promote the product in this way. After all, you do not need to spend large sums on advertising and contact the media. Agents independently promote products by telling other people about its benefits. This approach to business saves not only finances, but also time.
The absence of paid advertising and the promotion of products through interested agents, not suppliers, make the MLM business profitable not only for owners, but also for consumers. The final price of the goods is reduced, and the buyer receives this or that product at a lower cost than in stores.
Network Marketing Benefits
Of course, there are advantages, and they are not few. Let’s highlight the most important ones:
- a free schedule that allows you to engage in online sales at a convenient time for the agent, while combining with work in the office, everyday life and children;
- there is no boss who arranges "debriefing" and calls on the "carpet" to find shortcomings and oversights in the work;
- there is no income limit – a person earns as much as he invests effort, time and desire;
- receiving cash bonuses with a large turnover of goods or other achievements established by a particular organization.
Also among the advantages is the opportunity not only to buy goods at a reduced price, but also to earn cash bonuses on this. Yes, and a person receives automated work on the Internet, which he sets up in a convenient way for the seller.
Cons of network marketing
There are also downsides to the job. Users note the following:
- low income at the initial level, because earnings come from attracted referrals and the number of sales;
- searching for customers takes a huge amount of time, especially if the product is of a narrow specification;
- monthly purchase of products for a certain amount, if such an item is established by the company;
- the need to adapt to each customer, try to competently answer the questions asked and not respond to insults, which are also lacking in this business;
- a large number of only invited agents leave before you earn even 5 🪙 on them.
Remember, you can’t stop working until you reach a full-fledged passive income from the people you brought (which will not be soon, it will take many years).
Buying goods as one of the disadvantages
The serious disadvantages of some organizations include the requirement to buy goods that the agent will sell. If the product is not sold on time, it will begin to deteriorate, and this is already a loss and, moreover, considerable. Especially if it is not about cosmetics, dishes or hygiene products, but, for example, about medicines or food. Therefore, many users do not choose companies that put forward such working conditions. It is not profitable, costly and risky.
Therefore, it is worth taking a responsible attitude to the choice of a team, studying the terms of the contract and other nuances. Information can be found on the Internet (it is in the public domain). It is also worth talking on the forums with people who have already worked in this field of activity and get information “from the first person”.
Focus on the pros or cons?
Do not forget that, despite the disadvantages, it becomes possible to receive passive income, which is earned from attracting new agents (referrals). If initially a person works on his own, trying to bring new people into the MLM business, after a while you can not waste your personal time. Funds will be credited to the account from each sale of the invited agent, and so reaching the very last level.
In addition, almost all the disadvantages take place only at the initial stage of work. The question follows from this: “So, how can you make money in the network businessif the income is penny?”. Everything is simple. The whole point of earning is practically inviting new agents. The more you bring them, the higher the income will be. However, there are nuances. Simply hiring a new employee is not enough. This person must regularly make purchases and also bring new sellers who will make a profit.
Why is network marketing called multilevel
Let’s start over. Network marketing – what is it? This is a network, or rather a pyramid. It is based, as already mentioned, on attracting new agents, who are called referrals. Let’s take a closer look at the example below.
You became an agent of a network company and after a while brought two more people. Now you have your own team of two levels, for which you immediately receive a cash bonus. These two people make sales, and you regularly receive a percentage of them (for each item sold). After another time, the agents brought in invite two more people to the business. Now this is a three-level team. You, in turn, receive a percentage not only from the people you brought, but also for those four people who were attracted by referrals.
Thus, a pyramid is created, which can reach up to 10, 20 or more levels. And for every person who finds "under you", you get a percentage in monetary terms. The more levels and agents, the more monthly income.
High earnings – myth or reality?
Surely every Internet user has stumbled many times on the reviews of network marketing workers, where they describe big earnings from the very first months of work. But is it? No. As practice shows, only 30% of MLM agents can reach a decent income. The data was calculated by American extras, focusing on network marketing in Europe. However, according to these studies, Internet users draw specific conclusions.
This is a certain risk, and here it is already how lucky. As a rule, those who earn at the upper levels earn. But in order to rise, you need to work hard and for a long time. It will take years, and there is no guarantee that you will have a stable income not in a penny.
Those partners who are at low levels usually earn very little or nothing at all. The competition is so great that it is very difficult to find a potential buyer who will make a good order for a product. That is why many users of the worldwide network, after a month or two of work, simply leave this business either with nothing or with losses.
How to earn the first money
You have been looking for a job for a long time and decided to try network marketing. How to earn? First of all, you need to register and become a partner of a network company. You will be given products to sell. You can find buyers among friends and acquaintances, buy it yourself (if you are interested in the offer), or find consumers on the worldwide web.
Build your own customer base, no matter how small. 10-15 people will be enough to start. Most importantly, choose buyers who are clearly interested in the product and will make regular purchases. Your friends, acquaintances, work colleagues, classmates from the university are best suited for this role.
The next step may be to search for potential buyers via the Internet. You can search for clients on forums, blogs, social networks. Having passed this stage, you can proceed to wider sales. These can be fairs, sales and other events with a large number of the public. Then the income will increase already ten times more.
The next step is to search for agents to create multi-level network sales. To attract referrals, you can also use the Internet, telling users about your successes and achievements.
Why network marketing gets bad reviews
MLM business is developing on the Internet at an incredible speed. As a rule, excellent reviews about such networks come from their employees. But there is much more dissatisfaction. So what’s the deal?
For some reason, people have formed a negative opinion about network sales. One of the main reasons is the excessive imposition of such work. Very often on the Internet in social networks and on forums you can see a message like “I am on maternity leave with a child and earn 60 thousand a month.” Of course, it is immediately clear that this is a scam. No one will receive such amounts in a month, two or one and a half. Internet users immediately avoid spam and do not pay attention to it.
Also, the scammers became the reason for the bad attitude. Unfortunately, there are many of them. That is why, if you decide to go into a network business, you should not rush to the first option that comes across. Read reviews on the Internet, ask friends and acquaintances, and only then choose a trusted company. As a rule, financial pyramids act as fraudsters, which “pull” money from people, promising mountains of gold. However, you are unlikely to get returns even after several years of painstaking work.
Can an mlm business be official?
Network marketing is a business that can and should be legal. As a rule, normal companies promoting their goods have all the necessary documents, licenses and certificates. They have a legal activity, which is listed on the account in tax organizations.
Through such companies, each person can work in the status of self-employed or as a private entrepreneur. If you are not sure about the choice of network, it is better to immediately refuse and start looking for another organization.
What is the difference between network marketing and financial pyramid
The main difference is the following. Real companies that use network marketing aim to sell as much product as possible. The purpose of the financial pyramid is the maximum number of attracted participants. As a rule, pyramids do not sell any goods and do not promote services. For such organizations, contributions made by members are important.
Every person who enters the financial pyramid receives money for attracting new agents, and not for sales. That is why if you notice that nothing is being sold to companies, you can be sure that this is a pyramid scheme.
Please note that any internet user can try network marketing. A business can succeed or vice versa – just "do not go."
How not to run into a pyramid
If, nevertheless, the financial pyramid is engaged in sales, you can calculate the true purpose of the organization by the following points:
- selling products at a high price, while the same product in stores costs ten times cheaper;
- payment for a certain product that you will receive "later", it is not known how long;
- incomprehensible purpose of products or objects that are sold (for example, land, real estate);
- availability of financial contributions for the workplace during registration;
- big wages not for selling goods, but for inviting new agents to the team.
If a person notices any inconsistencies in the work of the organization, it is better not to risk it. Getting into a pyramid scheme draws money out of people, and in order to earn money on it, it is necessary to deceive new agents so that they do not suspect anything. Is it worth it?!
What Psychological Tricks Do Network Marketing Owners Use?
To attract agents, partners of a network multi-level business uses a psychological impact on a person according to the principle of a sect. Let’s highlight the main ones.
Attracting attention. It’s not just about telling how to work well in this business and how much money you can make. Employees engage the agent by submitting information. If this is a phone or Skype conversation, the person hears a joyful emotional speech that can be accepted, as if the speaker is insanely happy to hear you. If this is chatting, you will see a huge number of emoticons, brackets with a smile and other pleasant moments that cheer you up and contribute to an agreement to cooperate with this particular team.
Holding conferences. As a rule, at such conferences, a “rich” network agent is pushing the speech, who tells how he went all the way from scratch and began to earn millions. Unfortunately, real partners do not perform at such events (except those who were paid), but people absorb this information, thinking that they will be able to achieve the same results in a short time.
The appearance of guilt. “Mentors” from network marketing know how to impose a sense of guilt in a quality manner. If you do not reach the desired income, the team will inspire that it is you who do not work enough and do not work hard. Then a person begins to “plow” ten times more, only the result will be the same.
What you need to know if you decide to get into network marketing
Let’s briefly note the important points that a person should know and understand when he decided to join the MLM business :
- to make a profit, be responsible and purposeful;
- from the first days of work, becoming a millionaire will not work;
- make sure that the company is official and is not a financial pyramid for pumping money;
- you need to think soberly and be able to leave the business in time if something suddenly goes wrong;
- be a calm, patient and communicative member of the team.
Do not fall for psychological "tricks" when company employees try to attract a person in all sorts of ways, putting pressure on the psyche and "playing" with your emotions, like with puppets. Remember that network marketing is a big profit for wealthy people, for which the owners of organizations are ready to do anything.
You can make money through network marketing, but for this you will have to spend a lot of nerves, time and, possibly, money. If you have finally decided to master the MLM business, be prepared for the fact that this is a risk that may not justify itself.