What’s the Difference Between Direct Selling and MLM?
January 30, 2007 | By admin | 1 Comment »
I get this question a lot. Many people seem to use these two terms interchangably in the MLM industry.
Direct Selling is a way of moving products via Manufacturer (companies like Amway, Herbalife or Tupperware) to the consumer using sales methods like door-to-door, tupperware parties, facial workshops or any method that invovles selling a product directly without going through a middleman.
Multi-level-marketing usually refers to the compensation structure when products are moved, the commission is paid to distributors depending on their rank or posiiton from upline to downline.
Note that there are single-level structures (like unit trusts or insurance agencies) that enploys direct selling methods but not multi-level structured pay schemes.
Basically in multi-level, distributors can recruit other distributors. They may or may not employ direct sales methods (they can use Internet Marketing to market the product) in their business.
In certain countries like Malaysia for example, are govern by a Direct Sales Act. Most companies will go under the Direct Sales Act whether they are Direct Selling companies or MLM companies. A good illustration would look like this.
So as you can see, MLM companies are ‘Direct Sales’ companies just like Direct selling Companies are also Direct Sales Companies. This solves the confusion among the two types of companies.
amway and herbalife in india follow the mlm target="_blank" rel="nofollow" href="http://gobala.linktrackr.com/buildingonabudget-mlmrkeywords">mlm structure since the comissions are paid to the uplines depending on the product sales of downlines at any level .
do check with http://www.strategyindia.com to know more on indian direct selling .