Last Updated on February 13, 2022 by Matt Zavadil
MLM vs direct sales.
What’s the difference?
IS there an actual difference?
The challenge with trying to differentiate between direct sales and MLM lies in the fact that it’s all pretty much the same thing.
Confusing matters is the fact that “technically”, there are differences.
Are you confused?
I’m not surprised!
Let’s dig into the MLM vs direct sales debate.
What is Direct Sales?
Direct sales is the term used to define a specific type of business model.
With direct sales, companies sell their products directly to consumers away from a fixed retail location.
This means that distributors work on behalf of the company and sell directly to customers in person, via phone, or through social media platforms like Facebook, Instagram, etc.
What is MLM?
The acronym stands for “multi-level marketing” and it’s when an individual earns commissions based not only on his/her personal sales but also the sales made by the people he/she has recruited into his/her “downline”.
The MLM structure is what allows people to earn commissions on their team’s sales.
So, What’s the Difference Between Direct Sales & MLM?
There isn’t one.
That’s right, there is no difference between direct sales and MLM because MLM IS a form of direct selling!
What is a Party Plan Company?
Party plan companies, sometimes referred to as home party plans, are direct sales businesses that use a party-style selling model.
This simply means that customers are invited to the distributor’s home for a product demonstration and/or sale.
What is Network Marketing?
Network marketing is an umbrella term used to describe all types of direct selling companies.
It includes MLM companies but also encompasses any company that sells products or services directly to consumers away from a fixed retail location.
Is Direct Sales a Pyramid Scheme?
No, direct sales is not a pyramid scheme.
Pyramid schemes are illegal in the United States and involve the promise of high earnings based on recruitment rather than product sales.
You’re simply working through a person-to-person sales model when selling products inside the direct selling industry.
Is MLM a Pyramid Scheme?
MLM is also not a pyramid scheme.
MLM companies indeed have a multi-level marketing structure, but they are not pyramid schemes.
As mentioned above, you’re simply working through a person-to-person sales model when selling with a direct sales (MLM) company.
Let’s Allow the Direct Selling Association to Clear this Up
The Direct Selling Association (DSA) is an industry group that represents direct selling companies in the United States.
There’s a “Largest 25 Direct Sales Companies” page on the DSA website.
Go look at it.
All those companies are network marketing companies LOL
It includes companies like:
- Nu Skin
- Thirty-One Gifts
- Young Living
- Pampered Chef
- Mary Kay
- Ambit Energy
To write this article, I researched a bunch of other bloggers trying to explain the difference between direct sales companies and network marketing companies.
All we need to do is visit the Direct Selling Association’s website to find out that direct sales = MLM = network marketing = party plan companies.
Call it what you want, it’s all the same thing.
If you want to argue the semantics, have at it, but it’s a waste of time.
How to Make Money Selling Inside the Direct Sales Industry
If you’ve joined any type of network marketing, MLM, or direct sales company, the better question you should ask:
How the hell do I make this thing a success?
How do I make money with one of these multilevel marketing companies?
Alright, now we can talk about something solid…
…something fun LOL
Benefits of Working in the MLM Industry
One of the benefits of working in multilevel marketing or direct sales is that you can work from home.
There are so many opportunities to start and grow a business with one of these companies, regardless of your location.
Here are five other top benefits to working in network marketing:
- You’re your own boss
- Ability to earn residual income
- Flexible hours
- Opportunity to travel
- Personal growth and development opportunities abound
How to Find a Direct Sales Company That’s Right For You
You don’t have to believe me on my network marketing vs direct sales thoughts, but you need to do your research before joining a multilevel marketing company.
This is the best advice I can give you when looking for a network marketing opportunity:
Find something that’s going to work for YOU and not just “anyone.”
Think about what YOU would like and how it could fit into YOUR life.
What type of products or services are you interested in selling? Find a way to blend your interests with one of these companies’ offerings.
How much time will you be able to devote yourself toward building this business? You’ll want to take into consideration other responsibilities, such as family and full-time work.
What is your start-up budget? You don’t need a lot of money to get started in network marketing, but you will likely need some funds to purchase products and/or promotional materials.
Do your research! Don’t join the first company that comes along–take the time to read reviews, watch videos, and talk with other people who are involved in multilevel marketing.
What to Do After You’ve Joined a Company
After joining your network marketing company of choice, everything you do should focus on making money with the multilevel marketing business model.
After all, no one starts any other business without developing a real plan to generate revenue. For example, course creators, coaches, car repair shops, speakers, eCommerce companies, software companies, and flower shops all work to maximize leads and sales.
You must do the same inside your multilevel marketing or direct selling company.
Focus on Making Network Marketing Product Sales
The best way to make money selling inside the multilevel marketing industry is by making retail product sales.
You can sell products and services directly to customers, who then have the option of joining your team as a distributor/consultant when they’re ready.
This keeps things simple!
When you focus on your ability to sell products with your multilevel marketing MLM compensation plan, everything else tends to fall into place.
Your business grows, you develop more expertise in your niche market, and you’ll be able to answer questions about any multilevel marketing MLM issues that may come up with potential recruits.
Now, Focus On Building Your Multi-Level Marketing Team
After learning how to use the direct sales model to make product sales, the next step is learning how to recruit other sales reps into your network marketing team.
Recruiting new direct salespeople, or independent distributors, can be difficult if you’re generally unfamiliar with selling anything other than products.
The “selling” part of this equation is just helping people see that they have an opportunity to start a home-based multilevel marketing MLM company by joining your team.
From there, they have the same opportunity to recruit other direct sellers to build their MLM business.
FAQs About Direct Sales Companies
Is MLM the same as direct sales?
Yes, MLM and direct sales are the same things. Direct selling is a type of MLM business model where independent distributors sell products to earn commissions for their efforts.
These people can become sales managers by recruiting other MLM consultants into their downline to build out residual income streams.
Is direct sales a pyramid scheme?
No, direct sales is not a pyramid scheme. Pyramid schemes are illegal, and direct sales companies operate within the bounds of the law.
Is Avon direct sales or MLM?
Avon is a direct sales company. It’s also an MLM because its reps can earn residual income by recruiting other Avon distributors.
Is Amway an MLM?
Yes, Amway is an MLM because it has a multilevel marketing compensation plan that rewards distributors for recruiting other people into the business. They’ll earn residual income on the sales their team makes.
Is direct selling profitable?
Yes, direct selling can be profitable. However, success in this industry depends on the individual distributor’s ability to sell products and recruit new sales reps.
Is direct selling network marketing?
Yes, direct selling is a type of network marketing. Network marketing is the distribution of products and services through a network of independent sales reps. These reps are typically recruited by word-of-mouth advertising or online lead generation methods.
What’s the difference between mlm and pyramid schemes?
Pyramid schemes are illegal models that involve recruiting without valid products. MLM is a legal model where distributors can earn residual income by recruiting other people into the business.
Is there a difference between network marketing and MLM?
No, it’s all the same thing.
Why is direct selling better?
Better than what? Bad question.
Is network marketing direct sales?
Yes, MLM and direct sales are the same. Network marketing is just another name for MLM or direct selling.
Is MLM a legitimate business?
Yes, MLM is a legitimate business venture that gives people an opportunity to start their home-based businesses. It’s entrepreneurship.
Final Thoughts On The MLM vs Direct Sales Question
The MLM vs direct sales question is a bit like the chicken and egg dilemma – which came first?
Hopefully, you understand direct sales companies are the same as MLM or network marketing companies.
It’s all the same. You join a direct selling, MLM, network marketing, party plan company…whatever you feel like calling it… and you go make it work.