What Is The Difference Between Direct Sales & Multi-level Marketing?

What Are the Chances of Making Money at Multi-Level Marketing?

Net Worth Calculation of Equity in Private Companies For those with the entrepreneurial spirit, but limited startup capital, both direct sales and multilevel marketing provide an opportunity to start a business. While multilevel marketing technically operates as subset of the direct sales business model, the two approaches differ in a variety ways, ranging from product type to organizational structure and costs. Products Direct sales companies generally provide a range of durable goods, such as steak knives, that have a substantial cost and lend themselves to a single sale process. Few customers will purchase a second and third set of steak knives or other durable goods. Multilevel marketing companies, by contrast, often offer consumable goods, such as herbal supplements or food products, which cost less but lend themselves to repeat sales. If an herbal supplement works as advertised or the food impresses, a customer will likely purchase again. Organizational Structure Direct sales businesses typically operate with a centralized manufacturer that produces the product. The businesses essentially contract out sales jobs to freelancers that do the door-to-door selling. Salespeople receive commissions based strictly on the number and size of their own sales. Multilevel companies follow a similar structure, but add a twist: An individual salesperson can recruit others into the company, which creates a “downline” source of sales and income. The recruiter then becomes eligible to collect a percentage of revenue from the people in the downline. As long as members of the downline continue to sell, the upline receives residual income in addition to revenue from her own sales.

Group Discussion Topic: Multilevel or network marketing

Facebook will create several hundred at the very least, and many of them did not come in that early. Not to call some just engineers, but many of the future millionaires will get truly lucky instead of actually being good. They didnt have to take a major risk or even a pay cut. They simply joined a company that has grown from $5 million to $100 million to $1 billion to more than $80 billion since inception. If you joined at a time when your options might have come to $100,000 at a $10 billion valuation (a small percentage of the total), they will turn into about $1 million when the company gets sold. True enterprises experience a rising tide lifts all boats. Network marketing businesses do not. The bigger the network marketing company gets, the bigger only the head gets. Even if you come up with a new trick to help sales, which they will then take and tell others, you receive nothing for the growth you create. Inequality MLM businesses are deliberately closed organizations. As mentioned above, they promote a dream and a vision, but they treat those in the business like sheep. There is no upward mobility, no advancement and no room for creativity.

Michael Seidman, an ear, nose and throat doctor at Henry Ford West Bloomfield Hospital whom Sarnicola and Mallen approached. Sarnicola credits Blair, a California native and tech entrepreneur who is ViSaluss CEO, with providing the business acumen and investor connections that allowed ViSalus to scale up its operations and make good management decisions. The paperback version of Blairs autobiography and how-to book , Nothing To Lose, Everything to Gain: How I went from Gang Member to Multimillionaire Entrepreneur, debuted at No. 1 in April under the New York Times advice and misc. sales category. In the book, Blair, 35, describes how less-scrupulous multilevel marketing companies have a lopsided ratio of customers to independent distributors. Thats why so many companies out there are schemes, he wrote. The sad part is that a lot of them arent even schemes on purpose. In a recent interview at ViSaluss bright new East Big Beaver Road headquarters, Blair said the multilevel marketing model provides for an enthusiastic sales force of individuals who all use ViSalus products and are walking billboards. ViSalus promoters often have their own web pages and are encouraged to be prolific users of Facebook and Twitter. With these advantages, ViSalus has no plans to ever sell its shakes and workout drinks on traditional store shelves, Blair said. Dale Peake, 41, of Lawton is one of the most successful promoters. Selling ViSalus, Peake said he made $913,000 in gross income in 2012, netting about $500,000 after taxes and business expenses.

Multi-level Marketing Businesses

MLM Opportunities Guide

It goes something like this: Winkel was working as a bellman at a Salt Lake hotel four years ago when he carried the briefcase of a well-to-do man who gave him a $50 tip. The man was a distributor for a multilevel marketing company. Derrick Winkel’s story has become nearly a legend among the people who gather every Wednesday night at the Riverboat Restaurant. If Winkel himself happens to be in the audience, he’ll usually be asked to come to the mike and tell the story once again. It goes something like this: Winkel was working as a bellman at a Salt Lake hotel four years ago when he carried the briefcase of a well-to-do man who gave him a $50 tip. The man was a distributor for a multilevel marketing company.Pretty soon Winkel decided to become a distributor, too. Now he makes as much as $31,000 a month. The audience loves this story, and the other stories that follow: how Diane Goodwin expects to be financially independent by the time she is 26; how Debbie Enright, the mother of three small children, is now in the upper 1 percent of wage earners in the state; how Scott Tillotson made $123,000 in July alone. This is the weekly Wednesday night “opportunity meeting” of NuSkin, a Provo-based skin care company. But it could be a meeting for Matol or NSA or Sunrider or Amway, or any of the hundreds of other companies who sell their wares through a sales approach known as “multilevel marketing.” If you work in an office or go to church or have a neighbor or are related to anyone at all, there’s a good chance lately that you’ve been approached by someone who distributes a multilevel marketing product – and wants you to become a distributor, too. Signing new people up, who sign more people up, who sign more people up – and who all make profits on the products sold by the people beneath them on the signing-up hierarchy – is the cornerstone of multilevel marketing. Debra Westlake, a former Xerox sales rep, for the past year has been besieged by calls from friends and acquaintances asking her to sign up to sell everything from water softeners to cookies. She was contacted by six different NuSkin distributors before she decided to buy a $239 kit this past summer and become a NuSkin distributor, too.

The Cult of Multi-Level Marketing

Most of these companies are based around home shows where a hostess invites her friends to her home for product or service demonstrations. Attendees are then offered a chance to purchase while the hostess of the party earns incentives and credit toward her own product purchases based on the sales of her party. The demonstrator will earn a commission based on the sales of the party. Direct selling businesses include toys and clothing for children, kitchen supplies, home decor, jewelry, crafts, adult novelties and much more. There is a direct selling business for virtually any interest and many companies within each category. The commission structures and upfront costs will vary by company as well as how deep of a downline (recruits) the demonstrator can have and earn from their sales. Choosing a Direct Sales Company When searching for a direct sales opportunity, talk with others who have also pursued a work from home business with that company. In conducting research, it is important to distinguish between multi-level marketing opportunities and pyramid schemes . Find out about the pros and cons, upfront costs, ongoing costs and commission structure for the business.


The members in this unique business model play all the roles i.e., as investors, employees and customers. The interest of the members is not safeguarded and there is no exit option, except by loosing the money that has been invested towards franchisee/membership. The multilevel marketing firms are banned in most of the countries. But the loopholes in the Indian legal policies, which are made to control the business of such companies, provide them a perfect ground to nurture and flourish. Newspapers have regular concealed ads to lure people into it till they go through the experience and realise the truth of such additional five figure income attractions. If statistics are compiled it would be beyond imagination to realise how many have contributed a small amount to make millions and billions for others through this system. Multilevel marketing plans are ways of selling goods or services through distributors. These plans typically promise that if you sign up as a distributor, you will receive commissions – for both your sales of the companys products or services and for the other people you recruit or lure to join the chain of distributors. Multilevel marketing plans usually promise to pay commissions through two or more levels of recruits, known as the distributors down-line. Do you favor the concept of multilevel or network marketing?

Multilevel marketing still grows well

Only about one in 25,000 or 50,000, depending on the MLM, makes the huge incomes touted in promotional literature. The U.S. Small Business Administration wont lend money to people who intend to start an MLM business. Who Makes Money? Some folks make money through MLM ventures. Taylor calls them TOPPS, which stands for top-of-the-pyramid promoters, people who are at the top of the recruitment ladder. They comprise 1 percent of a typical MLM. The other 99 percent lose money when you figure the costs of purchasing an often-required starter kit and the expenses required to recruit people, such as attending conferences or buying books or tapes to learn how. Many people join an MLM under the promise of it being a part-time job, but MLM participants cannot make a profit working only part-time, according to the average earnings reports of 30 MLM companies. People who start a small business that is not an MLM are profitable 39 percent of the time compared to 1 percent of the time for an MLM business. A Red Flag The Federal Trade Commission has tried to get MLM companies to disclose what the average earnings of participants make. But MLMs and their lobby group, the Direct Selling Association, oppose doing so, stating it would create a burden for direct sellers to disclose this information.

Troy-based ViSalus hopes to prove staying power in multilevel marketing

According to the Vietnam Competition Authority under the Ministry of Industry and Trade, sales via multilevel marketing last year reached VND4.05 trillion, equivalent to some US$193 million, up 170% from the previous year. Statistics showed that there were only around 235,000 people joining multilevel marketing organizations in 2006, and the number of participants increased by over 4.6 times last year to over one million. Ha Thi Quynh Tram, chairwoman of the AmCham Vietnam Direct Selling Committee (AVDSC), told that Daily last week that although official statistics on this years sales of multilevel marketing companies were not available, the market had steadily grown. Explaining the growth, Tram said that as the economy was in difficulty, many people were getting involved in multilevel marketing as a way of earning http://www.upi.com/Odd_News/2013/10/05/Your-Daily-Horoscope/UPI-37731380960000/ some money. It is low investment costs, few risks and flexible time that have helped attract over 125,000 people nationwide joining direct selling networks last year. Over ten years of presence in Vietnam, there have been 78 companies registering for the multilevel marketing business here, according to the Ministry of Industry and Trade. By last month, 54 companies had been operational, with 13 foreign-invested ones. Meanwhile, other companies have suspended operations or had their licenses revoked. Hanoi has the highest number of direct selling companies with 28 operational firms among 40 registered ones, while the respective figures in HCMC are 23 and 34 respectively. According to the Ministry of Industry and Trade, 90% of such firms sell functional food which is followed by cosmetics, fashion products and home appliances. The number of products has also increased much in recent years with around 4,500 products going on sale last year. Experts said that as the market would be further opened up under WTO commitments, there would be more companies joining the multilevel marketing market, especially those from foreign countries. However, direct selling operations in Vietnam have left many scandals in the past.


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