(MLM) and (Network Marketing) What's the Difference?

Major corporations and companies are continuously searching for better methods of marketing their services and products as cost effectively as possible. One solution that has become very popular is MLM and Network Marketing.

You've probably heard MLM and network marketing referred to as one and the same. MLM'ers have gotten a pretty bad rep from their old school ways of marketing and the way their portrayed in the industry as "scammers." This has resulted in the switch over in the terms that they now use and call themselves; nowadays MLM'ers are using and referring to themselves at "Network Marketers", but it wasn't always this way.

These two terms started off meaning two different things. I want to educate you on the differences in case you're weighing your options and thinking about joining in on the one of these ventures.

Yes, it's true that within many network marketing companies the business structure is very much like the structure of a MLM company. The difference is the distinctive concepts of the two. When I say "Prepaid Legal", what is the first thing that pops up in your mind, MLM right? I'm sure it did. I'm also pretty sure that you're familiar with the payment structure of MLM companies too. MLM'ers gets compensation for recruiting new distributors. Their company pays them a percentage and continues to pay them a residual percentage as their downline grows or widens.

As they increase the number of people they have under them, top earner MLM'ers get paid continuously month after month from the efforts of their downline. This process continues until the person at the top of the line gets bumped in rank. Kind of like the owner of Wal-Mart or McDonalds. Now it's their job to keep their team motivated to continue to recruit more people so that they all can benefit financially. As the team brings in more distributors they all get a percentage and the pay starts from top (remember like the owner of Wal-Mart) down. With the persona t the top of the line getting a higher percentage and the rest is trickling down the line.

Now that you understand what MLM is let's move on the network marketers. Network Marketing consists of many components. One of which includes the MLM structure we just covered. Network marketing put simply is the leveraging of relationships used to get customers to purchase a service or product. When you really think about it, we all network market with one another

Your best friend just went to see an awesome new movie and tells you about how good it was and suggests that you go see it. You then tell your husband, wife, boyfriend, or girlfriend to come and see the movie with you, they then invite more friends and before you know it you're all heading out Saturday night for a group outing. That's network marketing. You've used your relationships and influence to produce a fun night out at the movies.

Same concept goes for network marketing, leveraging relationships to influence purchases of products or services. There's no downline building required nor is there a "fat cat" sitting at the top. There are some network marketing programs out here structured like MLM's but more of them are not. Top network marketers are usually very good at building and maintain relationships with many people and they use those strong relationships to influence purchases. The Internet is the best way to leverage network marketing because it allows you to build and maintain many different relationships with many different people from around the world via email, phone or other creative ways. You're doing this every day the only difference is that you're not getting paid for it.