The Differences Between Direct Sales And MLM Companies
The Differences Between Direct Sales And MLM Companies
Direct Sales Business
A direct sales business is one in which you can work for an already established company. The company normally sells products or services and they look for representatives to help them do so. This allows an individual to become a representative via their own business and sell the company's products.
This makes it easier for someone to work for themselves without the overhead costs associated with starting a business from scratch. Many times the individual will also be able to sell the products without maintaining an inventory. This saves the rep money as well because there is no need to house the products yourself or pay for storage.
The company will already have packages set up that include product samples, promotional material and more for the representative to use. A good direct sales company will also provide training and other resources to help the business owner grow their business. These packages do cost money to purchase but many times it's a one-time fee and the individual will be able to use these items as long as they are working with the company.
You then use the material provided and sell the products of the company. In turn, the company pays you a percentage of all the sales you make. Depending on the company you are working with you might be able to set your own sales price and keep any money left over after you've paid for the items from the company.
For instance, let's say the cost for you to purchase an item is $1. According to the company's policy you are allowed to mark up the sales price to whatever you choose so you sell the item for $2. Once you receive the money from your customer, you pay the direct sales company their dollar and you keep the remaining dollar for yourself.
There are tons of direct sales companies out there that allow someone to start their own business by selling for them. A few common examples, that you may have heard of include, Avon, Tupperware, Home Interiors and Mary Kay.
These companies sell kitchenware, make up and other products but look to expand their company's profits by working with business owners around the world who like the idea of running their own business, but want the security of something already well established.
Multi-Level Marketing (MLM) Companies
With multi-level marketing companies, it's common to see the same names as you do with direct sales companies. As a matter of fact, most direct sales companies have some form of MLM in their business structure for those interested.
Multi-level marketing is just what its name implies - multi-levels of income potential. Let's use an example to help you understand how it works. You've just signed up with Company X to be a representative and sell their products to others. You've also been offered the opportunity to recruit others to also sell the products.
You book a party and the hostess (we'll call her Susan) decides she would like to sell Company X products as well. You sign Susan up and she becomes a member of your "down line." You will now make money from the sales received from your customers and you'll also make money when Susan sells products as well. Susan can do the same and depending on the company policy, you might be able to make money on sales that Susan's down line creates as well.
Although the terms direct sales and MLM are used interchangeably, they aren't the same thing. The reason is because most direct sales companies do not require their reps to participate in the multi-level aspect of the business. There is more money to be made when an individual chooses to recruit others, but for some that just isn't their cup of tea. Companies realize this and many are just as happy to offer both options to their potential representatives.
The Differences Between Direct Sales And MLM Companies - To learn more about this author, visit Chris Simpson's Website.
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For those who want to work from home or run their own business, two common ways to do so is through a direct sales business or a multi-level marketing company. Many people use the terms interchangeably, and although they can be similar, they aren't exactly the same thing. So, what is the difference between direct sales and MLM companies? Let's take a closer look to help you understand.
Direct Sales Business
A direct sales business is one in which you can work for an already established company. The company normally sells products or services and they look for representatives to help them do so. This allows an individual to become a representative via their own business and sell the company's products.
This makes it easier for someone to work for themselves without the overhead costs associated with starting a business from scratch. Many times the individual will also be able to sell the products without maintaining an inventory. This saves the rep money as well because there is no need to house the products yourself or pay for storage.
The company will already have packages set up that include product samples, promotional material and more for the representative to use. A good direct sales company will also provide training and other resources to help the business owner grow their business. These packages do cost money to purchase but many times it's a one-time fee and the individual will be able to use these items as long as they are working with the company.
You then use the material provided and sell the products of the company. In turn, the company pays you a percentage of all the sales you make. Depending on the company you are working with you might be able to set your own sales price and keep any money left over after you've paid for the items from the company.
For instance, let's say the cost for you to purchase an item is $1. According to the company's policy you are allowed to mark up the sales price to whatever you choose so you sell the item for $2. Once you receive the money from your customer, you pay the direct sales company their dollar and you keep the remaining dollar for yourself.
There are tons of direct sales companies out there that allow someone to start their own business by selling for them. A few common examples, that you may have heard of include, Avon, Tupperware, Home Interiors and Mary Kay.
These companies sell kitchenware, make up and other products but look to expand their company's profits by working with business owners around the world who like the idea of running their own business, but want the security of something already well established.
Multi-Level Marketing (MLM) Companies
With multi-level marketing companies, it's common to see the same names as you do with direct sales companies. As a matter of fact, most direct sales companies have some form of MLM in their business structure for those interested.
Multi-level marketing is just what its name implies - multi-levels of income potential. Let's use an example to help you understand how it works. You've just signed up with Company X to be a representative and sell their products to others. You've also been offered the opportunity to recruit others to also sell the products.
You book a party and the hostess (we'll call her Susan) decides she would like to sell Company X products as well. You sign Susan up and she becomes a member of your "down line." You will now make money from the sales received from your customers and you'll also make money when Susan sells products as well. Susan can do the same and depending on the company policy, you might be able to make money on sales that Susan's down line creates as well.
Although the terms direct sales and MLM are used interchangeably, they aren't the same thing. The reason is because most direct sales companies do not require their reps to participate in the multi-level aspect of the business. There is more money to be made when an individual chooses to recruit others, but for some that just isn't their cup of tea. Companies realize this and many are just as happy to offer both options to their potential representatives.
The Differences Between Direct Sales And MLM Companies - To learn more about this author, visit Chris Simpson's Website.
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
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