The Difference Between MLM and Direct Sales

MLM and direct sales have their similarities but they are very different. Here are the differences:

MLM

1- Lower Start Up Cost:

You can get started with as little as $29.95 however; the commissions are also lower ($5 to $50 per sale).

2- Success depends on the size of your organization:

The more distributors that you have under you will directly benefit your income.

3- Training is Minimal:

Since it can be a lot cheaper to start up, you can expect to get your moneys worth in training. Basic training is usually expected as a result of smaller start ups.

4- High Attrition Rate:

Since it is cheap to get started and the fact that many new distributors are not ready to pay the price for success, many new people will quit as quickly as they joined. It is like trying to fill a leaking bucket.

5- Payouts:

Most companies payout monthly although some payout weekly. You do not get paid directly from customers.

Direct Sales:

1- Higher Start Up Cost:

It can cost you anywhere from $99 up to $20,000 with direct sales. Yes it is definitely more expensive to get started with a direct sales business but of course the profit margin is a lot higher ($100 to $10,000 profit per sale).

2- Success depends primarily on your own efforts:

You get to make money for your direct efforts instead of relying on building an organization. If you make a sale today, you get paid today.

3- Great Training:

Top tier companies usually try to hire the best of the best in trainers to assist their new marketers to build their business. This is one of the reasons that this sales model costs more to get started with.

4- New marketers tend to stay in the game longer:

Since it is a bigger investment than what is required by MLM companies, most people will stick out their learning curve longer and stay in the game because they have more money on the line. When people have little to lose, they tend to get easily distracted and even lose interest quickly.

Payouts:

Most top tier companies allow marketers to collect payment upfront from their customers. The marketer gets to keep the lion’s share of sale and then send the company their percentage.

In the end it will be up to you to decide which type of business is best for you. Both have pros and cons. Both will require the same amount of work. However, direct sales usually does pay out a lot better in the long run than MLM.

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