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A Comparison between MLM (Network Marketing) & Direct Sales Approaches

Jan 27, 2008
There are several different approaches to launching a home-based business online. The two most prevalent are called MLM (Multilevel Marketing or Network Marketing) and Direct Sales. Both provide the potential to make loads of cash. There are basic differences in the approaches and techniques utilized by each. Let's take a closer look:

MLM or multilevel marketing is a method of engaging in a home-based business on the Internet. There are programs that you pay to be a part of (normally a nominal monthly fee of around $40.00). Once you join, the name of the game is to promote the same program. In other words, you are trying to get others to join the same program that you just joined for a percentage of their monthly dues paid. Here is a quick list of facts concerning MLM:

1) You join the program.

2) You are appointed a sponsor somebody who has been in the program longer than you that can help you learn the ropes.

3) With the help of your sponsor, you begin to develop your skills of online and off-line advertising and promotion.

4) As your promotion techniques saturate the Internet, you gain new members for the program that are placed under you. This is known as your downline.

5) Like your sponsor that gets a percentage of your monthly dues, you now receive a percentage of the monthly dues of the each member of your downline.

6) People love enthusiasm and positivity. If you display such characteristics via your promotional techniques, it is possible to grow a massive downline. That means that you would be receiving a percentage of a massive accumulation of monthly dues.

7) As long as the members of your downline continue to be a part of the program, you receive monthly income. This is called residual income.

8) You receive a percentage of your downline's dues because you referred them. Your sponsor receives a percentage of your monthly dues because he referred you. Your sponsor also receives a percentage of your downline's monthly dues (smaller than your percentage), because without him they may have never been referred by you. The organizers of the program take the rest of the money.

9) You now become the sponsor for the members of your downline. It is your job to keep them motivated and teach them of the ropes of promotion. That means that you will also receive a percentage of that anybody who joins the program under any member of your downline (your downline's downline).

10) This process duplicates itself indefinitely. As the program grows, so does your residual income.

Now let's take a look at the direct sales approach:

1) There is no program to join. Direct marketing is a solo venture.

2) The product or products that you sell are determined by you. They can be physical or electronic in nature.

3) You keep no inventories. If the product is electronic, then you are simply selling a URL for them to have the electronic rights to it.

4) If the product is physical nature, you act as a middleman and have the product drop shipped to them.

5) Methods of promotion for direct sales include:
-Pay-per-click advertising campaigns like on Google, Yahoo and MSN
-Sending out newsletters
-Paying a service to give you targeted leads in the form of e-mail addresses

6) You can also engage in any number of offline advertising methods to promote your online business.

Regardless of the method of online marketing that you choose to engage, your home-based business can make you loads of cash. The best thing to do is to increase your education further. The more you know, the more valuable you become and the easier it is to grow your down-line and your business. Now that you have some knowledge to go on, take it to the next step. Through your research, you will be able to better discern which course of action is the best one for you.
About the Author
Demetrios Tzortzis is unlocking the potential of new marketers to succeed without the initial "beginners" slump.

Demetrios Tzortzis
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