A brief word about MLM
Regardless of your qualifications, MLM or Multi-Level Marketing companies offer business ownership opportunities to almost anyone who is willing to make a small investment in them. Most MLM companies offer certain benefits such as the ability to build a huge down-line and create a residual income. Additionally, MLM companies typically sell a wide variety of products to families and friends such as health supplements, household products, and vitamins to name a few.
What do we mean by direct sales?
Direct sales is a phrase that oftentimes referred to as multi-level marketing in that it is a channel for the distribution of retail products and services. The text book definition of direct sales is “the direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs” (Advertising and Promotion: An Integrated Marketing Communications Perspective by George and Michael Belch).
In the simplest of terms, direct selling can be defined as the marketing and selling of products directly to the consumer and away from a land-based retail location. In other words, you go to the customer – they don’t come to you. One-on-one demonstrations and other contact arrangements are the primary ways in which direct sales are conducted. Although a large percentage of direct sales companies employ some type of MLM compensation plan there are a few differences that distinguish one from the other.
The differences between each
Direct selling is about as straightforward a sales method as you can possibly imagine. The bottom line is that you have continually got to be selling in order to earn money. With MLM, you earn money by virtue of direct sales but you also earn residual income by virtue of that huge down-line that you have built. Direct selling also involves cold calling or going door-to-door to sell your products whereas MLM involves calling on people you know such as family and friends as well as benefiting from your downline doing the same thing.
Both sales models can be conducted online as well as offline but the principles remain the same in both venues as they do in the paragraph above. Most individuals are not really salespeople at heart. When this is the case, you will benefit more from engaging in MLM versus direct sales. In direct sales, you only have yourself to rely on for an income whereas you have a downline to help add to your earnings when you sell for an MLM company.
Another one of the key differences between direct sales, MLM, and other business ventures is the size of investment and the necessity to stock a product inventory. In the standard business venue, you need a number of things such as:
• a business acumen
• financial stability
• a larger amount of investment capital
• previous business experience
• product inventory
Although the above is not a hard and fast rule, the same does not hold true with direct selling and MLM. When you open your own land-based small business, you are going to have a considerably larger investment than if you were to get involved in either of these selling techniques. Just make sure that you do your homework before you decide on any business venture so that you do not throw your hard-earned money away.
