<h1>The Differences Between MLM, Network Marketing, Direct Sales, Pyramid Schemes, Ponzi Schemes, and Affiliate Marketing</h1><p><br />When looking for flexible work or extra income, you may come across terms like MLM, network marketing, direct sales, pyramid schemes, Ponzi schemes, or affiliate marketing. While some of these terms describe legitimate business models, others are illegal and unethical. Understanding the differences is crucial to choosing the right opportunity and avoiding scams. This blog explains these business models in simple terms.</p><h3><br />Multi-Level Marketing (MLM)</h3><p><br /><strong>What It Is:</strong> Multi-level marketing (MLM) is a legitimate business model where individuals (distributors or consultants) sell products directly to consumers, usually outside traditional retail stores. In MLM, individuals can also earn money by recruiting others into the business and benefiting from their sales, creating what is known as a “downline.”</p><p><br /><strong>Key Points:</strong></p><ul><li>Product-Based: MLM focuses on the sale of real products or services</li><li>Income Streams: Distributors earn from their own sales and a percentage of sales made by their recruits.</li><li>Legitimacy: MLM is legal if it emphasises product sales and not just recruitment.</li></ul><h3><br /><strong>Example:</strong> Companies like Avon, Amway, and Arbonne are MLMs that focus on selling beauty or wellness products.<br />Source: The Federal Trade Commission (FTC) provides more insights on how MLMs work and how to spot illegal ones <a href=https://www.ftc.gov/business-guidance/resources/business-guidance-concerning-multi-level-marketing”>here</a>.<br /><br />Network Marketing</h3><p><br /><strong>What It Is:</strong> Network marketing is a broader term often used to describe businesses that use personal networks to sell products. It overlaps with MLM but is more focused on building networks of sellers.</p><p><br />Key Points:</p><ul><li>Relationship-Based: Success in network marketing comes from building personal networks that help sell products.</li><li>Similar to MLM: MLM is one type of network marketing
