Popular in our day to network marketing.
Definitely Yes, and here’s why. Freeware open any advertising newspaper with the heading “Work” or type in any search engine the phrase “to make money” “make money online”, “online business”, “MLM”, “Network marketing” and you will see hundreds of thousands of resources and announcements regarding network marketing (CM). Look at your circle of acquaintances, and you will easily find out that your neighbor is distributing health products. And your best friend is a consultant for network companies promoting cosmetic products. And your aunt bought an insurance policy offered by an MLM company. Or, for fun, ask any passerby, if he knows anything about network marketing (CM). And there is hardly a person who will tell you “No.
Now ask him if he knows what CM, and could he explain this to you. When I was doing this experiment, I have the impression that in front of me once done talking to Moo-Moo.
Paradox – on the one hand, all are aware of CM, on the other hand, few know what this phenomenon really is.
Let’s turn to history and facts.
Decided to take over the primary starting point of the era of CM 1934.In 1934 Carl Rehnborg founded the company “California Vitamins” and thanks to a new system of sales,
when the consumers of the product became its distributors (distributors), the company had a turnover of $ 7 million without investing a single dollar in advertising.
In 1939, Carl Rehnborg renamed his company “Nutrilite Products” (product title), while maintaining the principle of distribution of food supplements. His employees were invited to work the newcomers, and gave them the necessary information about the product and offered to everyone to build their own network, inviting business acquaintances.
The company provided all distributors with their products and pay each a Commission not only sold his own goods, but also for every sale made personally enrolled distributor. Sales representative of the company, which became known as the “sponsor”, i.e. a mentor, hired a rookie, took the commitment to train him and help him make more sales – depended on his own commissions. And they could be more group sales, than personal. Thus, Rehnborg introduced the practice of classical business “single-level marketing.
Although actually still in 1263 Prince of Moscow Daniil, the youngest son of Alexander Nevsky, received after the death of the Grand Duke with a modest inheritance – a small town Moscow. Small. Poor. But he stood on the trade route.
Daniel was then 2 years old. But from the very beginning in the management of the Duchy of Moscow is evident – perhaps due to the boyars, mentors the young Prince is extremely intelligent and far-sighted policy.
Each came to Moscow the family were presented with a unique at the time, (and ours too) benefit. Of the Prince’s reserves were given grain, timber for construction and for five years the right not to pay dues. If they bring another family, the period of exemption from dues increased to 10 years. And gave Daniel a preferential tax on trade and merchants, and peddlers.
And filled the barns of the Moscow grain and junk. And went people a large number in Moskov-grad, brother with brother, neighbor with neighbor, for craftsman tillers. Away from civil wars, for a short time Moscow becomes a developed (at the time) densely populated industrial and commercial city.
Here is a classic example of the system of incentives and rewards for recommendations – a classic CM.
And such examples, if you dig into the historical archives, you can find many. In fact, the principle recommendations that form the Foundation of this business, there is millions of years since man appeared. But the economic framework and the notion of CM appeared in the US in 1934.
The subsequent history of CM is associated with the names of employees of “Nutrilite” rich De Vos and Jay van Endel, who after ten years of successful business in the structures of renberg in 1959 formed his own company called “American Way Corporation”, abbreviated “AMWAY”. The merit of these people is that they, firstly, went beyond the implementation of just one product to include to your assortment, in addition to nutritional supplements, household goods home and use.
In the history of SM and difficult times. In 1975-79, the years in America, a struggle with the financial pyramids, and the flag of this company along with the water almost splashed and child. The Federal trade Commission, there were officials who tried to declare an illegal pyramid company “AMWAY”. Four years was the audit of the company, culminating in a judicial decision that recognized network marketing is a legitimate way of selling goods. Immediately after the Federal authorities, most States have also recognized network marketing (MLM) is legal.
What is going on with SM today.
SM really has been regarded as one of the main driving forces of the economy in the 21st century. Today, accurate statistics of the global distribution does not exist, because many companies do not deliver the reporting of its sales and the number cooperating independent distributors.
Based on data from the direct selling Association (AMS) in Washington, and from other industry sources, the Director of “Network Marketing Lifestyles” the Duncan Maxwell Anderson concludes that the annual volume of sales through the MLM organizations according to the results of 1998 has reached with the US $ 20 billion and $ 80 billion worldwide. Known restraint of their estimates, AMS believes that only the U.S. is involved in CM of people is about 8 million.
But, writes Dr. Charles W. king, in his article “Network marketing: a review.
Dr. Charles W. king is a Professor of marketing at the University of Illinois in Chicago, holds a doctorate in business administration, Harvard University, and a bachelor’s degree and master’s degree at the University of Texas.
Dr. king participates in the advanced research network marketing and distributors activities. He teaches network marketing in the University programs and is a national speaker industry. Dr. Charles W. king has written several articles on network marketing for the magazine “Success.
The direct sales industry: an overview of the structure of the world – 2000 year.
World industry structure of direct sales presented in this review.
Us $78.3 billion, the volume of direct sales worldwide.
42 million sellers direct sales in the world.
The world Federation of Direct selling Associations available in more than 50 countries.
USA with a volume of direct sales of $25.6 billion and 11 million sellers direct sales became the largest country in the world in the field of direct sales, the volume of direct sales amounted to 32,95% of total sales worldwide.
Japan became the second largest direct sales force in the world – $22.8 billion and 2 million sellers, so it accounts for 29.1 percent of direct sales worldwide.
The share of Asian countries generally account for 60% of all direct sales world.
The share of Asia and the United States together account for 90% of the global volume of direct sales.
Asia has a huge potential, as China and India begin to use network marketing as a business and as an effective channel of distribution of goods in the market.
About 13 countries have a volume of direct sales over 1 billion US$ and amount to “a Group of Countries Billion Dollars.
Russia and other Eastern European countries for which statistics are available, direct sales, show.
In Russia, the volume of direct sales of $189,2 million (US$) and estimated 376,6 thousands of sellers involved in direct sales.
In Poland, the volume of direct sales of $319,5 million (US$) estimated 420 thousand sellers involved in direct sales.
In Hungary the volume of direct sales of $81,69 million (US$) and estimated 146 thousands of sellers involved in direct sales.
Direct selling Association of the United States – the most advanced research organization in the world, also concentrates on direct sales. However, this Association periodically conducts research and publishes reports relating to network marketing. In the latest research, Report, Growth and Prospects 2001, the Association reported.
About 80% of direct sales organizations reported that they use a form of multilevel compensation plan.
About 73% of all direct sales were done through a multi-tiered trading system.
About 82% of sales direct sales were involved in multi-level organizations.
Although this statistic says about the situation in the United States if the 73% share of network marketing applied to the world volume of direct sales of $78,29 billion, this would mean that the channel of network marketing earned ($78,29 billion x 73%) of the world trade turnover to $57,15 billion (US.
Using the same method and using 82% of sellers % of sellers of network marketing worldwide, we get a figure of (42 million x 82%) of 34 million sellers of network marketing.
But who knows? In any well-known and popular sources of information you can read about it? What schools say about these facts? On what TV channel you can see the reliable information about CM? That’s right – any! Why still suffer with Gerasim mu-Mu.
What are the forms of participation in MLM.
I would pick 3 main forms.
Who is the consumer.
Is any person who is issued a partnership agreement with the network company and buys goods or services at a discount for themselves and their families. Also, this person may recommend the company’s products to their friends and acquaintances, while having profit in the amount of wholesale discounts.
This is a man who, being a consumer starts to engage in professional personal sales of the products of this company and earn good money.