What is Network Marketing and Direct Sales?

Network Marketing, Multi-Level Marketing (MLM), Direct Sales, and Distributor Networks are all more or less the same thing. You will see me use all of these terms, but understand that I am talking about the same thing. The only difference with MLM is that not all direct sales or network marketing companies have multi-level commission structures, but most do which is why these terms are used interchangeably.

Network Marketing/Direct Sales is a business-distribution model that allows a company to sell its products and services directly to consumers away from a retail location by means of person to person networking.

Network marketing offers the opportunity for anyone to operate their own business. It is a system of selling in which you sign up other people to assist you, and they, in turn, recruit others to help them. The root of network marketing success is the sponsoring of new people into the business, much in the same way sales agents find new retailers to handle their products.

Network marketers do not work for the companies they represent, but they are network marketing distributors, independent representatives, independent business owners, independent sales associates, independent agents, etc. (their title depends on the company) of that company.

Network marketing distributors develop their organizations by building an active customer base who buy directly from the parent company, and by recruiting a downline of independent distributors who also build a customer base, thereby expanding the overall organization.

Network marketing distributors earn a commission based on the sales efforts of their organization (aka “downline”) and their own personal sales. Earning money with a network marketing business is similar to how a franchise works – royalties are paid from the sales of individual franchise owners to the franchisor; but with network there can be multiple levels of people receiving royalties from one person’s (distributor) sales.

The concept of network marketing has been around for over fifty years. There are many excellent companies distributing many excellent products through direct sales and multi- level distributor structures, but just as in any thing, there are good ones and bad ones too.

There are hundreds of successful network marketing companies, but some examples of well known companies are: Amyway, Herbalife, Mary Kay, Avon, and Pre-paid Legal.

Comments are closed.