Introduction
Network Marketing and Multi-Level Marketing (MLM) are two terms that are often used interchangeably, but what is the difference between them? Network Marketing and MLM are similar in many ways, but they also have some key differences that make them unique. In this article, we will explore the differences between Network Marketing and MLM to help you better understand the two business models. Network Marketing vs MLM: What's the Difference?
What is Network Marketing?
Network Marketing is a type of direct sales business model in which a company sells products or services through a network of independent distributors. The distributors are compensated through commissions on the sales they make, as well as bonuses and other incentives. Network Marketing is also known as multi-level marketing (MLM) and direct selling.
What is Multi-Level Marketing (MLM)?
Multi-Level Marketing (MLM) is a type of direct sales business model in which a company recruits independent distributors to sell products or services. The distributors are compensated through commissions on the sales they make, as well as bonuses and other incentives. The distributors can also recruit other distributors and receive a commission on their sales as well. This is known as the “multi-level” aspect of the business model.
Key Differences Between Network Marketing and MLM
The key difference between Network Marketing and MLM is the multi-level aspect of MLM. In Network Marketing, the distributors are only compensated for their own sales, whereas in MLM, the distributors can also earn commissions on the sales of their recruits. This is why MLM is sometimes referred to as a “pyramid scheme”, as the compensation structure is often structured like a pyramid.
Another key difference between Network Marketing and MLM is the focus of the business model. In Network Marketing, the focus is on selling products or services, whereas in MLM, the focus is on recruiting new distributors.
Conclusion
Network Marketing and Multi-Level Marketing (MLM) are two types of direct sales business models, but they have some key differences that make them unique. The key difference between Network Marketing and MLM is the multi-level aspect of MLM, which allows distributors to earn commissions on the sales of their recruits. Network Marketing focuses on selling products or services, whereas MLM focuses on recruiting new distributors. Network Marketing vs MLM: What's the Difference?
