Episode Details

MLM, network marketing and direct sales, which is best for you?

People say that the Internet has changed everything! I say that some things never change. For instance, whether you’re selling online or face-to-face; people do business with other people. Your customers are people you are selling to people even if you are using the Internet as the platform.

Recently we talked about ways to make money on the side while still keeping your regular job and some of you have asked for examples of how to do this.

Apart from getting a part-time job; we keep hearing that there are all these job vacancies that can only be filled by EU recruitment. I’ve mentioned plenty of online money-making ideas, such as Amazon and Ebay, so I wanted to give you a few offline ideas for those of you who prefer more traditional face-to-face sales.

Over the last 50 or 60 years one of the most popular ways of earning extra money is to join a network marketing or direct sales company where you sell products and recruit people on a self-employed basis.

One of the main advantages of joining such an organisation is that you don’t have to do any of the R&D, product development marketing and set up in order to get started. You can basically sign up and get started. It’s a bit like a franchise where much of the work has been done for you. In general, you have more chance of surviving under a good franchise system than you do starting-up your own business from scratch. There are, of course, disadvantages like the fact that you have no control over the business.

I know people have made millions from network marketing. Jim Rohn made his first fortune working in Amway, the largest network marketing company which started in America in the 1950s. But I also know hundreds of people who have made nothing or have lost quite a lot of money. I still remember the look on the face of a restaurant owner in Swiss Cottage, when a lorry turned up to deliver a large consignment of water filters.

So what’s the difference between MLM, network marketing and direct sales?

The main difference is that network marketing involves recruiting and building a team whereby you earn commission from your downline. This should not be confused with the illegal pyramid schemes where the sole purpose is to recruit people and get their money from people who then recruit more people to get more money.

Direct Sales simply involves selling products for a commission.

• Direct selling

There are hundreds of companies that sell low-cost products through a network of self-employed agents. Long established companies which come to mind include Betterware and Ann Summers.

Ann Summers have been going strong years and have thousands of female agents or “ambassadors” who make part-time living selling their products through party plan systems(similar to the old Tupperware parties). They run a staggering 7.000 parties every week in the UK and Ireland and have made the old-fashioned sleazy sex shops more palatable to the High Street. It has worked very well and the company is very successful.

Ann Summers started in 1970 with a shop in the west end of London. It was acquired by Ralph and David Gold (some of you may know him as the joint chairman of West Ham FC) in 1981.

David Gold’s daughter Jacqueline Gold, the current Chief Executive, started the party plan concept. I have met Jacqueline on a number of occasions and she is a fascinating lady. The story goes that she was originally introduced to the company on a work experience basis and paid just £45 a week. She says that the experience of working in one of her father’s sex shop was not very pleasant due to the male-dominated atmosphere and the way the shops were perceived at that time. She was invited to attend a Tupperware party and immediately saw the pot