The Distinction between MLM and Network Marketing

CHOOSE YOUR WEAPON: Direct Marketing - Network Marketing or Multi-Level-Marketing

Millions of people are attempting to build either network marketing businesses, direct marketing businesses OR multi-level-marketing companies both on and offline. Let me distinguish between each of these business models AND then we will look at the other great possibility for generating residual income from home – Affiliate Marketing.
 
1.Direct Marketing: Direct marketing can be your own product but is more likely someone else’s product and in a pure sense this is simply affiliate marketing. Typically, this business model implies there is no team effort, or at least no part of the commission paid to others.
 
2.Network Marketing: Here the product is combined with a network of people whom you are developing and teaching them how to market the same product. This is very much like what I used in the offline world for many years. In the offline world this was a Sales Agency. Each sales person earns a sizeable commission for each sale and the owner of the sales agency would take a small piece of the overall commission paid by the primary companies being represented (for training and/or overhead expenses) that the other sales people did not need to incur for themselves. In Network Marketing the focus is the product and “growing a team” is secondary.
 
3. Multi-Level-Marketing: Today MLM is still very popular but is giving way to Network Marketing and ultimately may lose the battle completely. The difference between these two models is this: In Network Marketing the lion’s share of the commission goes to the person making the sale with a small piece going to one or maybe two levels up (the idea here is how effective can someone be training and helping people build their business when they have hundreds or thousands of “down line members”. The answer is not very. But when you have only a few dozen people you can really bring value to your team (by helping them to promote the product). In MLM it is quite different as one person may bring in hundreds of people who each only earn a small commission for any direct sales they make and the rest of the commission is split among all the other “up line members”. In MLM the focus is “growing a team” which many people do not do that well and the product is almost secondary.
 
So, your job now is to think through what your business is (or for some, what business you want to pursue) determine how it is best marketed and then choose from the internet business models that prove to be the most effective for you and your business, product or service. Any of these models have the potential of building a real home based business opportunity as long as you do it right, meaning systematically and very focused on your intent and purpose. See my book excerpt regarding concentration.