MLM vs Network Marketing what the difference here?

Great discussion here, I too feel many that network marketing and MLM are the same many in the industry use both terms. I for one prefer to use network marketing. Each of us have to educate ourselves on what the industry is truly about many feel it is about the company, products/services or comp plan I disagree that this is what its all about when it is more than that.

Many are promoting and marketing the wrong product. Just my two cents.

Michelle

 

I think the two terms are interchangeable...basically, they mean the same thing, althogh some people might dispute that until they are blue in the face...

 

multi-levelmarketing pays out on many levels, sometimes ten or more. This is what defines MLM. The top recruiters are paid commissions on all sales made within their organization, at least as far as the company pays out by level.

GDI for example pays out on 5 levels and can be built as wide as you wish. Binaries like Success University pay out on more levels but you cannot build them wide at all. They are both still MLM.

Network Marketing is selling goods, services, or information through networking with other people. In some cases this means building an oragnization that pays out on multiple levels. In some cases this means building an organization that pays on 1 level ( like 1-up plans).

There are probably today more people earning six-figure incomes with 1-up and 2-up plans than with MLM plans. I am not saying that MLM can't be lucrative... but it does pay smallish commissions generally so you have to run a lot of money through the organization to get a living wage with it. This is the main reason people quit - they have negative cashflow from product purchases and marketing expenses and the commissions take so long to build they can't afford to stay in the game.

Its only generally feasible to build a strong MLM group if you can afford to stay in the game AND the people you recruit can afford to do the same. Why do you think there are so many MDs successful with MLM? They know and network with other successful people who can afford to stay in long enough to build a strong, profitable organization.

 

Quoting: xxain2001Pyramid is when you get paid buy only joining people without selling any product to the person who joined
Quoting: CThompsonAn illegal pyriamid is driven by money and no product is sold.

Pyriamids are not bad.

Illegal Pyriamids are bad.


Technically speaking because there is no defined federal tax structurization for business conducted on the web... web based pyramids such as cash matrix, chain letters and perpetual buck sites are all legal. Ethical?...no. But ...legal? Yes. The illegallity of cash pyramids back in the day was determined by the goverments lack of tax re-imbursement and not by individuals losing money. The fact remains that with any business opportunity web or land based... There are always Winners and Losers.

 

Differences between MLM and network marketing:

MLM and network marketing use to be synonymous
terms since both referred to a compensation and
distribution system that had multiple levels.

With the development of the Internet some subtle but very
significant distinctions have emerged.

Everyone understands what affiliate programs are. You
should be aware there are substantial numbers of
affiliate programs that have multiple levels (more
than 2 for purposes of this discussion).

For instance I am in one affiliate program that has ten levels.

In my opinion here are two important distinctions that have
emerged to differentiate MLM from network marketing.

With traditional network marketing programs there is
nearly always an entry fee. That is, there is an initial cost
to get started, and the sponsor or upline typically earns a piece
of that fee,

Secondly, with traditional network marketing programs there
is usually a monthly sales/consumption quota for individual representatives.

These two requirements are lacking in a great many multi
level affiliate programs so it is my opinion that marketing
practices with the advent of the Internet have evolved to
an extent where MLM and network marketing are no longer
synonymous.

I think these two distinctions are important because:

(1) no entry fee means less risk and there is no
financial barrier to entry.

(2)no sales or consumption quota removes the "sell
or else" component that qualifies whether representatives
continue to earn. Note, many multi level affiliate programs
offer recurring income.

I hope this post will contribute to a meaningful distinction
between MLM(multi level marketing) and network marketing
and the two terms will gain distinctive meanings.

Best of success,

Robert

 

Quoting: CThompsonIllegal Pyriamids are bad
All pyramids by definition are illegal. I know it may be semantics to you, but in America MLM/Network Marketing is legal, but a pyramid is not. The organization of a network marketing company may look like a pyramid, but the pyramid definition is based upon the pay structure which is illegal. The term comes from "pyramid scheme" which was popularized by Ponzi scheme of Charles Ponzi. Research it. Pyramids are illegal.

Furthermore, I would never join a company that requires constant recruiting in order to receive bonuses or residual income. That's ridiculous, and if Melaleuca requires that, it is probably why they have never reached critical mass in the industry and never will.

 

Quoting: lavendersluvMany are promoting and marketing the wrong product. Just my two cents
I could care less what the product is; although, I understand why people get hung up on it. It's the idea of residual income. I pick companies based upon the compensation plan. They may sell feces for food, but I don't have to eat it. I only have to buy it and promote it. Business is business and I only care about the compensation plan. Now, of course, a great product only makes the pot sweeter, but the product means nothing to me.

 

Doesn't MLM require recruiting and team buiding whereas Network Marketing only requires selling? If you are promoting a product that requires others to sign up and build downline, then that would be a little bit of both. If you are promoting a tangible product, then I would think that would be Network Marketing but not MLM.

 

Nope, they're one and the same.

Andrea

 

There really isn't a difference between MLM and network marketing.

MLM pays on multiple levels and network marketing is just a term used to described to advertising a business through word of mouth or personal advertising.

Tim

 

no real difference, actually.

just avoid schemes where you will paid out of new member fees, instead of product sales...

regards, Peter

 

Quoting: malibumentorIts only generally feasible to build a strong MLM group if you can afford to stay in the game AND the people you recruit can afford to do the same. Why do you think there are so many MDs successful with MLM? They know and network with other successful people who can afford to stay in long enough to build a strong, profitable organization.

And have you ever noticed that the Very Successful people NEVER quit...They are not sitting on their duff, collecting huge commission checks!They know that nothing just 'happens'....I heard a very successful business coach say once that you CAN quit working your mlm business after you have hundreds or thousands in your downline,but your check gradually dwindles...

The network marketing business is like any other business...you work it like a business, it PAYS you like a business...you work it like a hobby , it COSTS you like a hobby!!

I personally like the 1-up or 2-up plans as you get paid on your own efforts versus the efforts of your downline, but usually those cost more to get intne thing to remember when you are building a team...the more it costs to get INTO a business , the higher the committment to stay in and work it...When you can get started in a home based business for almost nothing, is it any wonder so many people get disillusioned by it all??

Have a great weekend you'all!



Viola

 

MLM is for people that want to work hard and learn marketing techniques to move product an services. Sharing is nothing but selling and if anybody can do it why then do we have to need to share. Everybody would be a millionaire. They make it so simple.

A traditional job where everybody at the top makes all the money is the real pyramid scheme though because in MLM everybody has an equal opportunity.

There are more and more people in MLM getting this and going through the process of building the foundation of their sales funnel. When you can find targeted people who understand how it works and already looking for your products and services, and get to know you you'll work smarter and more easily converting interested prospects into business partners and repeat sales.

The people unfortunately that call mlm a pyramid scheme are usually people that are suckered into an opportunity where the sponsor or company hypes everything about the business thus creating a revolving door of people that never understood how make it successful.

Go to any corporate job and try to get paid what the ceo makes and it's impossible. Do an mlm business and work hard right now, with little results and become more successful than your upline.



To your Success

Rick Salas

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MLM and network marketing are the same thing.

Affiliate marketing is not the same and I do not recommend you get into it only because you will make money for the owner and plus there is no leveraged or residual income involved.

If you are promoting regular affiliate programs, you are wasting money and this will hurt you LONG term.