Direct Sales and Network Marketing | Know Your Industry!
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 multi-level marketing business model. MLM or Multi-level simply refers to the business structure in which the compensation plan is mapped out. It’s how you get paid.
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 you happen to be a really good sales person or if on the other hand, 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:
Advocare, Amway and Melaleuca, to name a few…
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…
The lines have blurred quite a bit.
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.That my friend, is considered a Ponzi scheme or more popularly known as a Pyramid scheme.
In 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.
It’s know my many names…
Relationship marketing,
Word of mouth marketing to name a few…
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!
Til Next Time! =)
April
P.S If you're feeling stuck in your business even after you did everything your upline told you to do... Take a minute to Check out my 3 Step Marketing Blueprint to learn how to start marketing your business without feeling like a pushy salesman. CLICK HERE TO WATCH
April Ray
CEO/ Founder
If you enjoyed this article, leave me a comment and share with your besties! =)
Email: april@theintrovertmogul
Ph: (619) 537-9864
"As an introvert entrepreneur I don't particularly enjoy chasing strangers online, networking events, talking about myself on social media or anything else you can think of that involves selling! But, because I learned how to market online the right way, I don't have to do those things."
↓Check Out More. Comment and Share↓
This post was fantastic. 🙂
The explanation you provided was so clear.
Thank you. 🙂
Great stuff, April. Here’s another perspective…
Direct sales is an exercise in being a merchant.
Network marketing is an exercise in being a leader.
Great post, April. Network marketing and direct sales are two different things most of us don’t realize, but this post makes it easy to understand…thank you for sharing.
Great comparison and break down April! I’ve heard so many new “NAMES” for out industry is kinda crazy! Companies just seem to be making them up as quick as they come and go. Thanks for sharing!
Thanks for making the difference clear. You did a good job.
Great post. I have been in network marketing but not direct sales.
I’ve always worked on team building and teaching people how to become leaders.
Awesome post and great distinction between 2 similar models! Thanks for sharing it April!
Thanks for stopping by Juanita!
I agree! Thanks for commenting!
Appreciated you stopping by Sherri!
That’s so true Zach! Thanks for stopping by!
Thanks Adewale!
Yeah, I like team building as well. Thanks Mark!
Thank you Jelena!
Awesome post April!
Thank you for the clear explanation between Direct Selling and Network Marketing.
I prefer network marketing because it’s the ultimate leverage!
Dr. Lisa
I agree Lisa! Thanks for stopping by!
I’m in direct sales representing Norwex. I love owning my business, the flexibility to work around my family’s schedule and that I get to choose if and when I recruit others to have the same opportunity. The sales quota to remain active is very reasonable and I never have to keep product on hand and hope to sell them.
Direct Sales/Network Marketing is an amazing industry Christie! Glad you found a company you love. Thanks for sharing! =)