The direct selling industry works based on innumerable techniques. However, we would like to eliminate any confusion that arises regarding direct selling industry similarities and differences.
Distributorship in Direct Selling
Direct Sales is selling services or goods, but not from a location fixed for retail services. Companies that make use of third-party contractors to sell in such a place, which is independent of any fixed terms, can be considered as direct selling business. Companies go to coaches, distributors, consultants, and affiliates for this business technique. A distributor works independently according to the working hours set by him and is not an employee of a company. He can sell the products whenever and wherever he wants to.
The sale does not take place in the physical presence. You are termed as a direct seller when you are found to sell goods and services through the internet and from the comfort of your own house.
Network and Multi-Level Marketing
You might wonder what’s the basic difference between these two marketing techniques. Generally, both work on commission based payout method to distributors based on each sale made by those who the company has recruited for. Suppose, I have recruited a team, following which that team has recruited another. So, when for a company the sales are done by my team, and my team’s team, then I will be considered as the multi-level company. Most of the network marketing companies pay at different levels. In simple words, network companies are, more or less, similar to that of the multi-level companies. When a company has a multi-level payment structure, we can undoubtedly call it an MLM company.
The party plan model of business is used by direct sales businesses to generate bulk sales. When the party plan first started, companies paid a commission for retail selling products to the consumers. They paid commission to those contractors who were party plan recruited. People would prefer buying products like Tupperware, Pampered Chef, or Avon from consultants rather than being one on their own and purchasing the hamper with a hefty cost. Companies, with the party plan model, have decreased the barrier of entries over the past years that allows them to recruit and payout to more levels.
In today’s era, the base of such a plan is to make use of the party as the central place for sales. Incentives are awarded to the consumers by the companies for hosting parties so that consultants can get to a wider set of audience. The hostess is mostly awarded by free products and goodies. Mostly, these companies provide incentives to the hostess for organizing the party and are given a reward for the number of sales occurred there.
People might question how to know which company is in the direct selling business, which is for network marketing or MLM, and which one is for party planners. The brief explanations of this post might help you further to determine the similarities and the differences between all the above types of businesses.
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