Direct Sales Versus Network Marketing (MLM)
Posted: 04 Feb 2012 08:02 AM PST
Many of our entrepreneur marketing coaching clients are involved in Direct Sales or MLMs. Because I was not sure I actually knew the difference (okay, I admit, I didn’t know there WAS a difference!), I thought I should get some help from an expert in the industry!
Guest post by Direct Sales Expert – Tina Kraft
There are many articles out there about direct sales versus Network Marketing (sometimes called MLM or multi level marketing). I find it interesting how varying the opinions are on this subject. First off, I have been involved in both so this comes from first hand experience. Having said that, each and every company has a different sales model and compensation plan. Every company has a different percentage of commissions.
Network Marketing Companies
Most Network Marketing Companies have an auto ship for both the customers and the distributors, and to receive your royalties as a distributor it is a minimum monthly autoship to receive your products for “wholesale” – every company is different. Network Marketing is based more on signing people up to be either a customer or distributor and have them on autoship. They are normally consumable products. You make less money on your individual sales and about the same on your downline as in direct sales, but again EVERY company is a little different.
Direct Sales Marketing Companies
Direct Sales is more relationship based and face-to-face sales. Most Direct Sales companies use the party plan module. The commission made by the distributor from their personal sales is usually very good so YOU are more in control of your income. You can also build a downline and have residual income from your downline. Most companies have incentives and bonuses for sales and recruiting and also have incentive trips you can earn for FREE! Being more of a relationship based model, you have repeat customers and hosts for your “parties” or events. This is also why it is dominated by women as we are more relationship based in business.
How To Pick A Company
So what type of company do you want to be a part of? First when picking a company you need to figure out what you are passionate about. Are you passionate about health and wellness, decorating, bling, cosmetics, fashion, coffee? The list goes on and on! Also look at the compensation plan structure, do you want to build a team and become a leader in the company? What type of support will you need?
Direct Sales and Network Marketing are great ways to become an entrepreneur. It DOES take hard work, dedication and time to build your business.
Remember that nothing in life that is worthwhile is easy!! But it is very gratifying!! Make sure you are committed to your venture and don’t become discouraged easily.
Tina M Kraft