Even when direct selling and network marketing are avenues for growing a retail business, there’s quite a huge difference.
Each approach operates at the end of the distribution chain that eventually convinces individuals to purchase the product. Basically, the difference lies in the way income is generated, and how the professional achieves sales targets.
Difference b/w Direct Sales Vs Network Marketing
When it comes to direct marketing, companies usually market products tagged with a high price. The prospective customer always makes a one-time purchase. The items include electrical appliances like microwave ovens, gas burners, air purifiers etc.. After receiving customer’s feedback, the professionals easily adapt to the market trends.
But, with multilevel / network marketing the case is much different. Representatives involved in network marketing activities usually approach a list of friends and amiable relatives in addition to customers.
The business model focuses on consumable products such cosmetics, a toothpaste or even beverages like tea and coffee. Time and again, as consumers place an order, the marketers earn through commissions or residual income. They may even earn through schemes where people get added to the network as time passes by.
In network marketing, residual income is always earned through subsequent sales. But, a direct seller is generally paid a portion of the available profit. Post completion of sales, the individual moves ahead with another customer for generating sales. Though direct selling aids to earn a higher percentage than the management team, the person wouldn’t avail the benefit of residual income. On the other hand, multilevel marketing professionals earn a low commission in the beginning. But, as the network grows and orders are placed repeatedly, they get a chance of earning as much as an average monthly salary. If the individual boasts a large distribution line, then he or she is sure to avail a lion’s share. Not just that, other individuals do enjoy a certain percentage once the network starts growing. Unlike direct selling, network marketing helps growing the business by encouraging people to promote products to their acquaintances.
As far as direct selling is concerned, large ventures utilize comprehensive distribution methods. This helps then to market products effectively across the country. Direct sales people never get the liberty to choose the audience. They have to concentrate on a certain region as per the time and their availability.
Moreover, the professional pans potential through skills and a one-to-one interaction. The sales manager takes control over the entire team because he can either hire more professionals or continue working with the existing ones. However, the way of building the business is far different with multilevel marketing.
If you’re a network marketing professional, then you are the boss. You can recruit more individuals and help them become distributors under you. This creates a chain for long-term residual income as well as bonuses you may earn in future.
You are independent with decision making and would be following the concept of earning more through more efforts. You would have to be at your best because a distribution network would help you to sustain. To put everything in a nutshell, you have to think on your own, devise a marketing strategy and never rely on an individual who is experienced in the field.
Since a direct seller is paid a fixed amount from the profit, he can never soar high as the business starts growing. It’s always a one man show, which has to be managed by the sales representative. But, an individual can always foresee a potential for phenomenon growth with network marketing.
Over a period of time, the chain keeps growing without any end. Initially, you train responsible people under you. Later, after they succeed, these individuals teach others as to how they can move on. As the network flourishes, you also take a quantum leap that’s more than sufficient for your livelihood. In the long run, you may even succeed in building an asset and availing funds in addition to a bonus.
To conclude, every individual should make a choice depending on his goals and needs. Direct selling or network marketing is for those who like meeting people, are willing to work hard and have impeccable communication skills.
In the beginning, individuals may not gain a good amount of profit. But, as they develop a knack of promoting products, they can earn much more than their monthly salary. They would take everything in their stride and be passionate to grow in life.
In case you are new to the network marketing world, you can also consult an MLM coach to know how to go about with the business. With years of experience, the coach keeps a track of your performance and delivers feedback during a one to one interaction. This eventually helps to build a positive outlook even when there are many trials along the road of success.
Daniel is a professional marketing expert having topnotch proficiency over designing full proof business development strategies, product development and network marketing. His association with India’s most popular network marketing consultant agency helps him to provide better solutions related to modern marketing.