Although the terms sponsoring and recruiting are often used interchangeably, they actually have two different meanings.

Although the terms sponsoring and recruiting are often used interchangeably, they actually have two different meanings.

Although the terms sponsoring and recruiting are often used interchangeably, they actually have two different meanings. Recruiting is the act of searching and soliciting new distributors for the downline sales organization of an existing distributor. Of course, the activity carries important consultant responsibilities, such as compliance with company and statutory guidelines on earnings representations, product representations, and accurate representations of the company’s business opportunity.

Once a recruit has agreed to join the company, a recruiting distributor becomes a Sponsor. Almost all company policies set forth very specific duties and responsibilities of a Sponsor, including supervision, training and communicating with their downline sales organization. In addition, all companies have specific rules on cross-sponsoring and keeping respectful relationships with other sponsors and distributors.

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As a general rule, distributors, consultants, representatives, independent business owners, etc. all describe a salesperson who sells products for a direct selling company.

Is there a correct term for 1099 independent direct selling distributor? Not really. As a general rule, distributors, consultants, representatives, independent business owners, etc. all describe a salesperson who sells products for a direct selling company. However, it is common for party plan companies to use more artistic names such as stylist, artist, beauty consultant, etc.

In typical network marketing companies, independent business owners are generally titled with more generic descriptions, such as distributors, associates, and independent sales representatives.

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What’s the difference between MLM, network marketing, party plan, and direct sales?

Actually, they all fall under the general umbrella of “direct sales.” Historically, direct selling only involved direct person-to-person sales, often door-to-door. In the 1950’s companies such as Amway, Shaklee and Mary Kay introduced to the direct seller the ability to sponsor other sellers, to build a sales organization, and to receive an override commission on the sales in their sales organization at multiple levels. This is the origin of MLM, multilevel marketing and network marketing, which are all the same thing; i.e., direct sales with a multiple-level

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An Emerging Giant – What is the Difference Between Direct Selling and Network Marketing?

Network marketing – also called multilevel marketing (MLM), person-to-person marketing, and one-on-one marketing – is a form of direct selling. You may already know about direct selling.  Avon, Tupperware, Mary Kay, Fuller Brush… these are just some of the direct selling companies that have been household names for decades. Since the 1980’s, new network marketing giants have emerged, including Nikken, Herbalife, NuSkin, Maleleuca, and Prime America.

Direct selling companies market goods and services through networks of thousands of independent distributors. These distributors either buy products from their companies and then resell them to consumers, or they sell products on behalf of their companies for a commission on retail sales.

Network marketing gives direct selling a new spin. In both types of companies, distributors make money by selling products directly to consumers. But in network marketing companies, distributors can also make money by building their own sales organizations and receiving commissions or bonuses on the sales generated by the distributors in the organizations. The term “multilevel marketing” springs from the fact that distributors receive commissions on multiple levels of their organizations. Most direct selling companies today are structured this way.

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