This post covers the different aspects of network marketing: direct marketing, affiliate marketing, and multilevel marketing and makes a comparison with direct sales.
This term really relates to the distribution system. It is the marketing and sale of products directly to consumers outside of a fixed point of sale, that is, a brick and mortar building. The oldest form of this sale was actually street vending! Modern direct sales include sales made through individual demonstrations, party plans, other personal contact arrangements such as house parties, as well as Internet sales. A textbook definition is ‘The direct personal presentation, demonstration, and sale of products and services to consumers, usually in their homes or at their jobs.’
According to the World Federation of Direct Selling Associations (WFDSA), consumers benefit from direct selling because of the convenience and service it provides, including personal demonstration and explanation of products, home delivery and generous product guarantees. satisfaction. The cost for an individual to start an independent direct sales business is typically very low, relative to franchises, with little or no required inventory or other cash commitments to get started.
Direct sales is different from direct marketing because it involves individual sales agents reaching out and dealing directly with customers. Direct marketing is about business organizations seeking a relationship with their customers. without going through an agent/consultant or a point of sale. Direct sales often, but not always, use multi-level marketing.
The largest direct selling companies by revenue in 2010, according to Direct Selling News, were:
Avon, Amway, Natura, Vorwerk, Herbalife and Mary Kay products
The difference between network marketing and multilevel marketing
Multi-level marketing is when a seller is paid to sell and for sales made by people they have recruited or sponsored themselves, as opposed to single-level marketing, where the seller is only paid for sales they themselves makes. This marketing strategy is where the sales force is compensated not only for the sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a multi-tier hierarchy of compensation. Other terms for MLM include pyramid selling, network marketing, and referral marketing.
The usual course is that sellers are expected to sell products directly to consumers through relationship referrals and word of mouth marketing. Some people use the term “direct sales” as an actual name for MLM, even though MLM is just one type of direct sales.
MLM companies have been a frequent subject of criticism as well as the target of lawsuits. Criticism has focused on its similarity to illegal pyramid schemes, product pricing, high initial start-up costs, encouraging, if not requiring, sellers to purchase and use the company’s products, as well as emphasizing the hiring of lower-level personnel. staggered sellers on actual sales. These companies often have complex and sometimes overblown compensation schemes and little integrity when it comes to dealing with their members and people in general!
The difference between Network Marketing and Affiliate Marketing
Affiliate marketing is a marketing practice in which a business rewards one or more affiliates for each visitor or customer generated by the affiliate’s own marketing efforts. Examples include bounties, sites where users are rewarded with cash or gifts; for placing an offer, and referring others to the site. The industry has four main players: the merchant (also known as ‘brand’ or ‘retailer’), the network (which contains offers for the affiliate to choose from and also handles payments), the publisher (also known as ‘the affiliate’) and the customer. The market has grown in complexity to ensure a secondary level of players, including affiliate management agencies, super affiliates, and specialized third-party providers.
Affiliate marketing overlaps with other internet marketing methods to some extent as affiliates often use regular advertising methods. Those methods include organized SEO (search engine optimization), paid search engine marketing (pay per click -PPC), email marketing, and in some form, display advertising. Affiliates may sometimes use less orthodox techniques, such as posting reviews of products or services offered by a partner.
Affiliate marketing, which uses one website to drive traffic to another, is a form of online or network marketing that is often overlooked by advertisers. While search engines, email, and website syndication capture much of the attention of online retailers, affiliate marketing has a much lower profile. However, affiliates continue to play an important role in the marketing strategies of online retailers.
I trust that now everything is clear!
Whichever path you choose, here’s to your success!