Network Marketing vs MLM

Both usually fall into the category of “direct sales” which refers to the method of distribution of products and/or services. Direct Sales is when individuals move products/services through a distribution outlet which is comprised of other individuals who usually receive compensation for a) Buying/Selling products/services, b) Establishing others who Buy/Sell products/services and c) Training Other Individuals to do the same (a & b).

Network Marketing vs MLM usually refers to the compensation method in which they are being paid and the back end mechanics which feed that. MLM, or Multi-Level Marketing refers to getting paid on not just your own efforts but multiple levels of others' participation (moving products/services from the main company through to the consumer). If a compensation plan does not pay based on levels then it is not fair to categorize them as MLM, but since they are still utilizing a network of individuals it is fair to say they are also doing “Network Marketing”. A good example of this is the Binary compensation method where one would get paid on a unification of a left and right group volume regardless of where any particular person is in the group in terms of levels. Sometimes if a pay plan does not depend on levels it gives more incentive for initial group participation as opposed to trying to get as many people directly sponsored on level 1 to “widen” the possibilities.

I believe, however, in the end, from a professional standpoint, it will be the same work performed in each, however, some binary plans lend to creating a medium income level much quicker and with less effort then a typical stairstep or Multi-Level approach, so those that really need that compensation to get them more committed are served first, so to speak.