My purpose and commitment is to really help you understand and appreciate the MLM industry. One of the things you need to know when shopping for a business opportunity that is built on the multi-level marketing format, is not only how these businesses work but which one will compliment your skill set, personality and area of expertise.
The Difference Between Direct Sales and Network Marketing
Direct Sales and Network Marketing are both based on the multilevel marketing business model. MLM or Multilevel simply refers to the business structure in which the compensation plan is mapped out. The Direct selling and Network marketing vehicle is the actual distribution system or the way the products are dispersed.
With Direct Selling, the emphasis is usually on direct, person-to person product distribution, which typically involves the independent sales representatives earning a commission from the products that they sell directly to the customers.
The usual way of getting their products out to the masses or finding customers is by hosting product parties, trunk sales, booths and etc., by way of their circle of influence. Advancing in rank is dependent upon the volume of products sold.
In some companies you can recruit other people to hosts parties in which they would be offered a discount on the products for hosting that party and also earn free products if they sell a certain amount of merchandise.
This is important to know if happen to be a really good sales person or if you hate the thought of selling in this way, when choosing a mlm company.
Some examples of Direct Selling companies are:
Avon, Natura, Vorwerk, Herbalife and Mary Kay
Now with Network Marketing, the emphasis is on team building. Building a team of partners who are in agreement to use the company products in their household as well as share products with others outside of their network.
You are basically the customer as well as the business owner and you are able to sponsor, support and train others who want to build a business of their own. So the importance here is on building an organization of like minded individuals who use and move product within and outside their network.
In network marketing, you also have the flexibility to host product parties or have a booth, etc., in order to promote your products if you so choose. You are the business owner, not just a sales representative so you have the power to run your business as you see fit.
This model is a great if you love networking, team building and training others.
Some examples of Network Marketing companies are:
Sisel International, Vemma, Amway and Visulas.
Some direct sales companies also incorporate the network marketing team building model as well depending on the compensation structure, so make sure to do your research.
Understand that the purpose of both models is product distribution, but, it’s the way the distribution happens and the way you, the marketer, gets compensated, that makes the difference.
On a side note, steer clear of companies that don’t have a product OR they have a limited product line that offers little to no value to the public.
End the end, the difference between direct sales and network marketing is fairly minimal. Both serve as an opportunity for the ordinary individual to build their own business, delivering quality products to the masses in a less expensive and more personal way.
By eliminating the middle men; expensive advertisers and merchandisers, the network marketer and direct seller can create residual/ passive income from home with less time, less money and less hassle than the traditional business model.
So Tell Me…
Have you ever owned a network marketing or direct sales business?
What did you like or dislike about it?
Did you find it too challenging? If so, tell me why.
I would love to hear from you!