Network marketing and direct sales share a common platform on various counts although they differ in terms of compensation structure. They are both avenues of marketing used by companies to cut down on their direct sales force and on costs of infrastructure required for reaching out to the customer through showrooms and stocking units.
As per the Direct Selling Association, statistics recorded in America during 2007 showed there were 15 million Americans involved in direct selling, accounting for $ 30 billion in direct retail sales. 98 percent of these sellers operated through multi-level networks and 70 percent of the sales were generated from the seller’s home. These statistics prove the success of network marketing and direct sales making both of these good online business options to consider.
Both Network marketing and direct sales fall under the category of self employment with the requirement of selling skills. These enterprises require entrepreneurs who are self motivated, good at networking and capable of making a least a minimum investment of time and money to get started. While both these online business options are highly are remunerative, it will take some time for you to see the commencement of steady inflow of money from your business.
Network marketing and direct sales leverage the support provided by companies in terms of the big budget advertisements, information on corporate websites and marketing material. Companies in turn remunerate this indirect sales force through commissions and other incentives. There are various types of compensation structures in both forms and both need careful understanding before signing up.
In regards to the differences between Network marketing and direct sales, there is a one-to-one relationship between the company, the seller and the customer in direct sales. In this business, the profits are more.
In network marketing, especially multi-level marketing which is more popular, there are several layers of salesmen between the company and the customer. In this business, the profits are less since they have to be shared by the Downline.
When it comes to compensation, in direct selling, if you bring in the sales, you get paid and keep the entire commission to yourself. When you are not selling, you don’t make any money. In multi-level marketing, depending on the scheme, whenever a person in a chain sells, the compensation is shared with the all members in the chain above that person.
Anthony M Healy is a business coach and mentor that assists serious entrepreneurs in building a profitable online business with multiple incomes streams. Anthony and his team have assisted hundreds of people in generating profits that exceed 0K or more in their first year. For more information and to contact Anthony, visit http://www.lookatdream.com.
More Direct Marketing Articles