Usachov V.A. , Gensyur M.M. Donetsk National University of economics and trade named after Mikhailo Tugan-Baranovsky

NETWORK MARKETING: ADVANTAGES AND DISADVANTAGES

With the help of network marketing you can reach their most exotic dreams, gain freedom and financial independence.

Network marketing is a unique business that fits perfectly to all people and very worthy rewards people who they are. After all, not everyone can be an athlete or an actor, singer or a politician. Not everyone has the necessary means to enable them to establish their own business. But almost everyone can engage in network marketing in different scales.

Network marketing is the concept of goods and Services based on a network of independent distributors , each of which, in addition to the marketing of products, also has the power to attract partners who have similar rights. Income each partner network consists of marketing fees and additional fees, depending on sales volume of our committed sales agents.Work in a network can be attractive to those who are in need of additional earnings and have free time or for those who have the opportunity to work on a flexible schedule. Work in network marketing is a form of private enterprisefor beginners can be useful for opening "their business" does not require major investments. However, one desires to become a successful entrepreneur isn't enough, and only a small proportion of those who are trying to work in network business, remains in it for a long time and gets a solid income.

From the point of view of MLM companies themselves, the following merit network marketing:

• application of direct sales allows you to save on advertising and commercial areas;
• sale, based on his own product, demonstration of exclusivity can be more efficient than sales through shops, where a wide range of similar products;
• the company may raise loyal clients who prefer to buy only from familiar people;
• the company's sales volume increased significantly stimulate the fees paid to distributors.

Network companies better going through economic crises than linear business. Some of the difficulties faced by those companies that focus on financial services or the upsell. In a time of crisis can occur even increase interest in network business — people try to cover such contingencies without solid assurances that their workplace is safe, and often come in network marketing. Network marketing allows a person to choose the pace of growth, and employment, as well as business partners. The Distributor interacts online in partnership with, thus avoiding the relations of subsidiarity. The majority of companies conducts various training programs for distributors, including to promote personal development. In network companies people regularly receive public acknowledgement of their results. Improving personal performance has led to increased income for distributors. But this also leads to an increase in income of the whole company. This is usually in network marketing, the atmosphere of cooperation and partnership. The company regularly hold meetings to congratulate their distributors that have reached a certain level.

Companies using methods of network marketing is often a point of controversy in the community, and the so-called MLM companies from time to time become the subjects of judicial proceedings. Justify their criticism primarily relates to the following aspects:

• similarity network marketing fraud schemes pyramid schemes;
• allegations of price at detecting collusion (fixing prices for the offered products);
• actual forced non-productive costs to distributors beginning at the initial stage (participation in training workshops, trainings and other events, purchasing educational materials, etc.);
• underlined emphasis on expansion at the expense of attracting new participants in the lower level, at the expense of increasing actual sales;
• promotion (and sometimes even forced introduction) the practice of purchasing products MLM distributors-company for its own use;
• the potential for exploitation of personal relationships as a channel for recruiting new participants network and ways to ensure increased sales;
• the use of excessively complicated compensatory schemes;
• the use of specific rituals and techniques, with a view to maintaining enthusiasm and zealous service to the normal participation of the company.

The activities of network marketing companies often take place outside the legal field. This product is not taken back or exchanged, as required by law on the rights of consumers. Do not return the money for unsold goods, there are cases of fraud.

So the main thing you need to know about network marketing – this is one method of sale of consumer goods. This mlm is different from the various “pyramid schemes”, the organizers of which make due contributions to new members. Pyramids are fraudulent organizations, a form of consumer fraud and banned in many countries.

In network marketing, on the contrary, the network is constructed for the sale of goods. Production company derives income solely from the sale of its products. And mlm network members receive income from the sale of goods with the help of people who have been trained by him in this business.