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[Sandeep Nath Company: MyLeadSystemPRO Contribution Level: 6]

Monica, everyone... I beg to differ.

It is only because the industry is in absolutely infancy that we are confusing jargon. First, let me say Bob Proctor is right. The entire spectrum of the direct-to-consumer industry will sweep revolutionary socio-economic change. Now with 75 years of build up, we are standing at the brink of the revolution. Hang on tight to your seats!

That said, I don't take upon myself to lay down the rules or proffer definitions. For a simplistic understanding, here are the explanations:

MLM: Multi-level marketing necessitates the movement of a physical product and pays out at various levels based on the total sales of a group of people. For example, if an individual has sold 1000 units of product and has recruited 2 people, each with 1000 units of stock, and they each do the same, there are 7000 units of stock moving through the group. Commissions would be issued to the 4 newest entrants based on the commission %age slab for 1000 units each. Then, for the 2 mid-tier members, commissions will accrue on a %age slab for 3000 group units. And finally, the group originator is remunerated at the 7000 unit %age slab. These tend to get pretty hefty and generally are high returns once the group achieves a critical mass. What I have described here is a ‘binary model’ but there are various strategies (matrices) designed by various companies to make their compensation models attractive.

Network Marketing: I like Jim Dornan’s philosophy which pretty much sums up the definition of network marketing. He says, “we don’t use people to build the business; we use the business to build people”. Network Marketing uses the MLM model and builds atop it leadership, empowerment and duplication. It takes MLM into the B-quadrant at a personal level and as a B-quadrant business owner a network marketers focus is not as much on product sale as it is on empowering others to align with team structure, leadership principles and network building. Contrast to MLM this method earns money slowly but does surely (and hugely); as is characteristic of any business system that is reliant on people’s initiative to learn and grow. Network marketing typically does not operate on a binary model.

Network Building: A relatively new term, network builders operate on the GPT concept of ‘getting paid today’. This ensures quick returns through product sales and network building up to one or two tiers allows for subscription based continuing income. Like network marketing, network building calls for vision sharing, leadership development and empowerment. But as monies accrue through individual product sales, rather than group product sales, returns are controllable by individual effort. And royalties are controllable by empowerment effort.

As all these involve movement of product directly to consumers… bypassing the traditional distribution supply chain… they all fall under the umbrella of ‘Direct Sales’ and employ Direct Marketing tools such as literature, presentations, roadshows, mailers etc. Corporations have historically employed the direct sales model to sell vacuum cleaners, safety equipment, insurance, computers… the works. Now the individual consumer is getting empowered to do the same and profit from it. That’s exciting!

A common mistake is to confuse the compensation model with the business system. A system is a step-by-step methodology of operation and training and has nothing to do with the network development system set up by the manufacturer or service provider. A 'business system' is like a franchise you would take to develop your business in a paint-by-numbers fashion by following what works. McDonalds has a system to market its burgers… you too would do well to have an external system to market your opportunity within the gamut of the direct sales industry.

[Larry Bilich Contribution Level: 2]

I agree with Richard on this matter...

Years ago when I first started in this industry I too reached a point where I was looking for a name to call what I was involved in. I knew or at least I thought in my mind at the time that there was this stigma with the general public about my new found profession and I guess I was looking for someway to put my mind at ease about what I did. It was really just a problem that I had with myself in my own mind.

I remember thinking should I call it Direct selling...or should I call it network marketing...or should I call it MLM....Should I call it referral marketing? And what I figured out was it was really just me and my own non beliefs about what I was involved in to begin with. I had not sold myself yet!

What I figured out was that its all the above. I'm involved in the network marketing industry and we sell and move products or services directly from our company to the end consumer and we are paid on multiple levels which gives people in the business powerful money earning leverage from people that we refer to our business or products.

The man who has kept me in this wonderful profession and helped big time in building my belief is Robert Kiyosaki. I have read many of his books and in many of them he openly endorses network marketing as a wonderful thing to be involved in for many different positive reasons.

A great book to pick up and read of his is first read "Rich Dad Poor Dad" and then "The Business School"...For people who like helping people. After you read those two books you will know that what you offer people is indeed a very valuable gift no matter what your looking to call what you do.

To Your Success,

Larry B.

[Reynaldo Perales Contribution Level: 3]

Personally...

..great post Sandeep..

Direct sales is directing sales to somebody..however, there is a differences in how
we move products..so yeah, network marketing is direct sales to somebody..
but, most of the time is the mlm company that is doing direct sales we just sign
people up now we can retail products by choice..

How, it's the difference between Sales person of the month..the year..

In newtwork marketing we called them Heavy Hitters..are they the same?..you decide..
I could be called a heavy hitter..I don't like labels but, I can't ever do sales like a real sales
person..I do not have that gift..yeah I know but we also can learn how to play football,
tennis, and other but..we do not have that gift..

In direct sales they move products differently..they are sold too from common carries,
Distributors, wholesalers,.

In network marketing we eliminate that..that's where commissions cames from..we
deal direct from the manufacture..

It's not very nice to blame people that can't sell hence, "Do not like to be sold"..that's
why they join network marketing..

Oto pages used to be one but now, I have seen up to 4 now imagine that face to face..
just can't take no for an answer I'm not saying it doesn't work but it doesn't to the people
that hate to be sold..Is that how we operate in network marketing?

I guess it's just me until somebody points out something that can convince me..anybody?

rey

[monica odenwald Contribution Level: 3]

Thank you so much for all your information. I am going to write an article about this....soon, if I may.

Hi Richard, thanks for your supportive response but my need for clarity had nothing to do with my business.

Seth Godin...oh the power of what someone like this has...to effect conversations and relationships for someone like me in NM, and MLM and yes - direct selling too!

This passed week, I was corresponding online with a professional software marketer who I met in the real world though my other job! What can I say? I liked him in person and so checked him out online.

I discovered he is so private online, vertiually unfindable. I contacted him through his one site on Linkedin.

While he perused my BN site and was flattered by my interest, thanks to none other than the mighty Seth Godin, his mentor my SPAM put him off.

Seth Godin has managed to take our respectable NM Industry and discredit it to the point where this person could not, dispite his sound business mind and apparent interest in me, treat my my online correspondence with any legitimacy.

Sadly, this resulted in terminating our lovely correspondence together....sad - very, very sad.

So, while there is always a reason behind every question on every FORUM, in this case I learned some very important definitions and information relating to the profession I am in that I will use over and over again as I relationship build through my work.

I like my feet firmly planted in the knowledge of what I do! Thank you everyone who responded for such a variety and excellent definitions about these terms describing what our career or profession is!

Thank you again and say a prayer for Seth Godin, (no conscience) because he is not only destroying credibility by brain washing the masses with his prejudice against NETWORK and Multi-Level Marketers but he is destroying relationships in the process.

Monica

[Richard Bravo Company: Life Force International Contribution Level: 9]

.

whew... cool Monica - glad to hear it.
Things can be misconstrued sometimes online.
I'm glad it was just an open question, not something you are personally struggling with.

It is sad to see the position Seth has taken.
Oddly enough, he was interviewed by an MLM blogger not too long ago, and he calmly played along.
I wonder what was going through his head?
He didn't downplay mlm in the conversation, but he didn't have a single positive word in the industry's favor either. It was a very "safe" conversation on his part.

It would be great to get clear verification straight from him.
He claims in his videos that he answers every single email he gets...
I've written him, with no response as of yet.

Time will tell I guess.

~rb

[Melvin Goodrum Company: AdvoCare International, L.P. Contribution Level: 4]

Direct and Network Marketing are pretty much the same with a slight difference in overall strategies. I'm mainly a direct marketer but I use network marketing as well to enhance my businesses

.

The reality is they are the same.
Direct selling, mlm, network marketing, referral marketing.... give it a name - it's all the same.
The only reason why there are so many variations is simple...

People trying to avoid the truth of what it is they are involved with because they lack the deep
rooted belief that this business model will work, therefore sharing the same opinion of outsiders
who dislike the business model with no more validation than a silly label.

Just the other day as I was waiting at the bus stop with the neighborhood parents waiting for the kids to arrive, the conversation turned to the number of foreclosed homes in the neighborhood. To my surprise the conversation quickly turned to how many of those standing there were facing the same. I have never heard such open conversation about lost jobs, cutting every corner possible and still falling deeper and deeper into despair.

I simply said that I was grateful that I wasn't looking for a job in this economy because I work a home based business. I was asked "really, what do you do" and I gave a very brief description. The question was almost immediate from one of the women in the group-
"Is it one of those pyramid things?"
I looked her right in the eye and with a smile told her that I had been working a home based Network Marketing business for 8 years - It WORKS.
All around me, the words WOW were spoken.
She simply didn't realize that she was being rude - and I wasn't flustered.

I hope that all of you have an answer ready - even if you haven't been doing this for years.
Netowork Marketing is a real profession. Develop the skill set to present yourself professionally, and have a good answer for the 'pyramid' question.

Todd Falcone has a cool one for people that as 'is this MLM' or 'is it Network Marketing'. His answer is "Absolutely, I wouldn't touch it if it wasn't".

[Vince & Roxana Gionti Contribution Level: 1]

We are Lead Experts that God has blessed with the Right Team at the Right Time. We want to pay it forward and bless you.

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[Ogundele Olawumi Contribution Level: 1]

What is direct selling?
Direct selling is defined as the sale of a consumer product or service, person-to-person, away from a fixed retail location. But there's more to the story than the simple sale of products.

From my own point of view, MLM is till direct. network and Internet Marketing just bring technologies into the Direct thing. I am of the opinion that technologies has brought serious improvement into the way marketing is done in our age.