When you hear about network marketing, many things pop up in your mind. Often times, many people think it’s a ponzi scheme. But the truth is network marketing is one of the most misunderstood industries in the whole world.
This type of marketing is also known multi-level marketing (MLM). Basically, a company is expected to move products and services from its base to its customers. In this case, network marketing deploying multi-level marketing to achieve this goal.
According to the best selling author, Robert Kiyosaki, network marketing is an excellent way to start up a part time business.
In fact, there are some MLM companies that are listed on the American stock exchange. Also, some of these companies have existed for over 100 years. For instance, Vowerk and Jafra are the oldest MLM companies in the world. They were established as far back 1883. Vorwerk deals basically with appliances while Jafra is a cosmetic company.
In this post, we will take a look at the history of network marketing in Nigeria and how it all started.
In Nigeria, the first MLM companies to arrive in the country were the likes of Forever Living Product (FLP), Mary Kay and Avon.
Typically, the marketing strategy employed by MLM companies works like a pyramid. The company is at the top of the pyramid receiving the profit from direct sales and commission. This commission is based on the sales made by customers that have been recruited as team members.
Usually, members are rewarded based on the volume of sales made by these members. Recruiting members can also earn commission from recruiting other members.
There are different types of MLM marketing and they have been explained below:
Uni-level Matrix MLM Compensation Plan
This plan is suitable for people that have experience in marketing. The model is like a ‘V’ shape model and you’re able to earn from every sale.
Although this model seems quite lucrative, there’s a limit to the levels you can reach. Often times, there are no more that 7 levels.
Binary MLM Plan
This plan can have up to two people on one level that is why it is called binary. As a result, most of the time, the people you recruit come under you.
Forced Matrix MLM Plan
In this case, you can have a specific number of people per level but you can more than two people.
This is one of the oldest plans. It is similar to the V shaped model in which you can recruit as many people as you like.
In this plan, once you reach a certain level, you can break away from the people you have recruited and you don’t have to pay them commissions anymore but you can still earn from the group.
Hybrid Compensation MLM Plan
This is basically a plan that combines any of the plans above together.
Currently, MLM is illegal in some countries. For instance, you aren’t allowed to participate in MLM in a place like Mainland China. But there’s currently no law that infers that MLM is illegal in Nigeria.
The misconception with MLM is the fact that it is a pyramid scheme and there are many of such schemes that have been labelled as ponzi.
In this post, we’ve also decided to highlight some of the reputable networking marketing schemes in the country.
We’ve chosen these companies based on the following characteristics
- The company has operated for more than four years.
- It has at least one physical office in the country.
- It has valuable products.
- It is endorsed by the government or the organization responsible for regulating such businesses.
Here’s our list.
- Forever Living Products
- Alliance in Motion Global
- Mary Kay
- Organo Gold
Forever Living Products
Popularly called FLP, this is a privately held multi-level marketing company based in Arizona, U.S.A
The company was founded in 1978 by Carl Jensen and Rex Maughan. As a result of its MLM model, FLP sells its products using over 9 million distributors across the world.
FLP products include personal care, weight management, nutrition, skin care, drinks and bee products.
The company’s office in Nigeria is located at Aromire Avenue in Ikeja, Lagos.
Alliance in Motion Global
Based in Phillipines, AIM Global is one of the top MLM companies in the world. AIM Global is currently present in over 20 countries and they are quite popular in Nigeria because of their nutritional supplements.
Mary Kay is an American based company that is quite popular for its cosmetic products. In 2015, Mary Kay was the 6th largest MLM in the world.
The company was founded in 1963 by Mary Kay Ash. Mary Kay distributors are called beauty consultants and they often receive commission from the sales of Mary Kay products. These consultants earn between 4 to 13% of the total sales. Currently, there are hundreds of Mary Kay distributors in Nigeria.
Avon is the leading social selling beauty companies in America. The company’s product portfolio includes skincare, color cosmetics, fragrance and personal care products.
Avon was founded in 1886 by David McConnell with the goal of helping women earn an income.
On its website, Avon is known as the company for women as it has been empowering women over the last 100 years. Avon opened in Nigeria in 2009 and has been growing since then.
Organo Gold focuses on coffee and tea formulations that have medicinal effects. The company was launced in the United States of America in 2008 and has been on an upward trajectory since then.
Organo Gold is a beverage and nutraceuticals companies with thousands of distributors in over 50 countries including Nigeria.
Some of their popular beverage formulations include Gourmet Black Coffee, Café Supreme, Café Mocha, Café Latte, Hot Cocoa and Green tea.
GNLD stands for GoldenNeo Life Herbal. The company was founded in 1958. The company is based in California in USA and they have annual revenue in excess of $200 million