MLMs, Direct Sales and Affiliate Marketing…Oh My!

If you spend any time on social media, you might feel like everyone you know is selling some type of product. For people who have launched their own home-based company, social media platforms like Facebook, Twitter and Instagram are a great way to spread the word about their products.

While these different business models all involve direct selling at their core, there are a number of terms associated with this industry that can make the specific approaches quite different. Whether you want to give this type of selling a try or are merely curious about the each of these approaches and what they entail, please consider the following points:

Multi-Level Marketing

Multi-Level Marketing (MLM) involves selling products directly to the public, usually through word of mouth and person to person sales. Distributors can make money not only from their own sales, but also from sales made by people they recruit. Some MLM companies will also require that their salespeople spend a pretty good chunk of change up front to buy inventory that they will then re-sell to others. Unfortunately, not all MLM companies are legit; if the money that people make is mostly based on the amount of people they recruit and their sales, then this may be a pyramid scheme, which is illegal. People who are intrigued about this type of work should definitely do their due diligence and research the company to discover what they will sell and how they will be paid.

Direct Sales

This is probably the purest form of sales. You have a product for sale, someone buys it and you earn money. Similar to people working for an MLM, direct sellers often work from home and have very flexible schedules, and you might hear about their products on social media. However, direct sellers often do not earn money based on how many people they recruit. A classic example of a reputable direct sales company is Amway; for decades, Amway has helped people become Independent Business Owners and set up their own home-based businesses. Because the industry is often misunderstood, Amway has been the target of rumors that claim it is a pyramid scheme. In response, Amway shared pyramid scheme facts that dispel the rumors and educate readers about the company’s business model.

Affiliate Marketing

Affiliate marketing can be an effective way to earn passive income through sales. At its core, it involves promoting other people’s products, often through an affiliate network, and earning a commission if people end up buying the items. For example, if you have ever read a blog about housecleaning tips that recommends a certain brand of vacuum and has links to another site where you can buy that specific vacuum, you are witnessing affiliate marketing. The blogger will earn money when people purchase the suggested vacuum and/or other products linked to in the article. For people who want to get involved in this type of sales opportunity, Amazon has an affiliate program where you can choose from over a million products to advertise to your customers; from larger networks to bloggers and more, Amazon will help you with the linking tools that will help to monetize the site.

The Different Manners of Selling

As you can see, while these three methods of sales all involve selling to others, they methods and payment plans can vary greatly. If you want to get into this line of work, it is definitely a good idea to do your research ahead of time to be sure you involved with a legit company like Amway or Amazon, and do not get involved with a pyramid scheme.

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