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

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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 compensation opportunity. In addition, in the 1950’s companies such as Tupperware and Home Interiors applied group selling, in the home, to direct selling and from this origin grew the party plan. Today party plan selling is direct selling and virtually every party plan company is also MLM because it rewards sellers for sales in a sales organization built by the direct seller.

And don’t forget to visit the rest of mlmlegal.com and mlmattorney.com for limitless information about the direct selling, network marketing, MLM, and party plan industries.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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