The Two Types of Network Marketing
It is kind of confusing at first hearing companies like Avon and Tupperware share the same title of Network Marketing as Amway and Melaleuca. Companies like Avon and tupperware are usually classified as 'direct sales'. Companies like Amway and Melaleuca are generally classified as Multi Level Marketing. Both offer an individual the opportunity to own their own business and build an income. But they have completely different income opportunites.
In Direct Sales, the majority of the profit is paid to the independent distributor. The distributor is usually soley paid from the sale of product to a customer. Once the sale is done they do not make anymore profit from the customer until another sale is generated. This usually requires the distributor to make monthly enquiries, order and deliver customer purchases and carry inventory.
In Multi Level Marketing the distributor gets paid differently. They get a percentage of each sale they make and as more distributors join their company or team they get a percentage of the sales from those distributors as well. Much like a real estate broker gets a percentage of the sales from the realtors in the office. This builds a residual income, meaning that the distributor continuously earns an income as long as distributors in their team continue to make sales and continue to build the team.