MLM Day in Russia Date in the current year: December 1, 2024

MLM stands for multi-level marketing; alternative names for this marketing strategy are network marketing and pyramid selling. MLM companies derive their revenue from independent non-salaried distributors selling their products or services, while the participants’ earnings are shared in a multi-tiered compensation commission system.

In multi-level marketing, participants have two sources of revenue. The first is commissions based on actual sales to retail customers, and the second is commissions based on the wholesale purchases made by other distributors who’ve been recruited by a particular participant. So, MLM salespeople are expected both to sell products to end consumers and to recruit new participants into the company’s distribution chain.

MLM companies are often frowned upon and accused of being pyramid schemes, but it is important to differentiate legitimate network marketing companies where the compensation is primarily based on the sales from illegal pyramid schemes where participants are promised payments for recruitment rather than sale of products. While a lot of people who join MLM companies do end up losing money, it doesn’t happen because of fraud. Nevertheless, MLM marketing is banned in some countries, including Bangladesh, mainland China, and Saudi Arabia.

Multi-level marketing wasn’t introduced in Russia until the collapse of the Soviet Union, since the USSR have a highly centralized economy, and private economic activity was not permitted. International MLM companies entered the Russian market in the early 1990s, Herbalife being the first one, and the first Russian network marketing companies began to emerge in the second half of the decade. Most of them sold cosmetics, household chemicals, and dietary supplements.

Today, the most popular MLM companies in Russia include Amway, Avon, Coral Club, Faberlic, GreenWay, Herbalife, Jeunesse, Mary Kay, Nature’s Sunshine, NL International, Nu Skin, Oriflame, Siberian Wellness, Tentorium, Tupperware, and Zepter. According to estimates, nearly 3.5 million people in Russia are involved in MLM, and many of them celebrate MLM Day as their professional holiday, despite its lack of recognition. A lot of MLM companies organize special events and offer their distributors various bonuses on the occasion.