Network marketing can be used interchangeably with MLM because essentially sales distributors are doing the same thing — cutting out the middleman and connecting buyers with the sellers directly.
The big difference? Network marketing has a greater focus on products rather than recruiting more sales consultants to work under more senior sellers. Typically, direct selling refers to higher ticket items where the sales distributor sells fewer products but earns a higher sales commission. This type of retail selling also removes the middleman, but rather than recruiting more people to sell, direct sales consultants focus on selling more, often going door to door.
Network marketing or direct selling companies have a bad reputation for a good reason and you should be very wary. How are direct sales or direct selling opportunities different from multi-level marketing companies?
Both MLMs and direct sellers sell products or services using person-to-person sales direct-selling. Instead of selling products in a retail store, they are sold directly to the consumer, from one friend, co-worker, sister, or acquaintance, to another.
While MLMs and direct sales take the same approach through person to person selling, in the MLM model sellers can also make money by recruiting other members. This is where the business models differ. Direct sellers make all of their money by selling a product or service to a person, recruiting others is not part of their business model. Direct person to person sales of a product or service.
For example, your coworker convinces you to buy an Avon product directly from her. She makes a commission off of this sale. Recruitment of other sellers. For example, that same coworker convinces you to start selling Avon products. She makes a commission off of your recruitment. Direct sales make money in one way — through the direct selling of a product or service, from one person to another.
So, what makes one better than the other? Direct sales and MLM jobs share many benefits, or at least they both promise to provide similar benefits including:. The non-definitive guide to the names of commission-driven business plans. If you started reading this blog thinking that direct selling, multi-level marketing, network marketing, and party plan all mean the same thing, I hope this gave you a little context, a better understanding of the nuances of each of these terms, and gave you some insight into why we have so many.
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Before anyone signs up, they should investigate the compensation plans, the customer base, the sales cycle, the customer retention rate, the customer reorder rate and much more of several companies.
And, if the person you are asking questions of cannot answer all of what I noted above in 15 min or less, you REALLY should not be signing up for that company! Good for you! That is a hobby, not a job. They held a gun to their heads? Ransomed their children?
Or perhaps just offered them an opportunity that their dead-end jobs never will? Whose fault is that? Did all those people mislead you in order to make those sales? Thank you, Alexa, for tackling this subject!
You mentioned that if you ever found the right product, that you would consider joining an MLM, so I was wondering if you have heard of Trades of Hope.
We empower women around the world out of poverty and sex trafficking through the sustainable business of marketing their Fair Trade accessories, gifts, and decor here in the US. Our founders specifically chose the Direct Sales business models because it has the fastest and most exponential impact. In 7 years we have developed dignified partnerships with over 13, artisans in 16 countries including the US!
I am currently sticking my toe into an MLM but I am not looking to make money. I love the product and I am telling others about it because I think it would be good for them. I just buy what I need of the product for my own use.
I guess it is possible to decide you no longer want to be a consumer and want to get rid of any personal product you still have. I have seen people sell their excess on Ebay. Other than that, I have never seen anyone in this product line encourage anyone to buy more than they need for personal consumption.
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