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Direct selling and network marketing

Network marketing and multi-level marketing have been described by author Dominique Xardel as being synonymous, and as methods of direct selling.[9] Other terms that are sometimes used to describe multi-level marketing include "word-of-mouth marketing", "interactive distribution", and "relationship marketing". Critics have argued that the use of different terms and "buzzwords" is an effort to distinguish multi-level marketing from illegal Ponzi schemeschain letters, and consumer fraud scams.[19] Some sources classify multi-level marketing as a form of direct selling rather than being direct selling.[20][21][22]

The Direct Selling Association (DSA), a lobbying group for the multi-level marketing industry, reported that in 1990 twenty-five percent of members used MLM, growing to 77.3 percent in 1999.[23] By 2009, 94.2% of DSA members were using MLM, accounting for 99.6% of sellers, and 97.1% of sales.[24] Companies such as Avon, Electrolux, Tupperware,[25] and Kirby all originally used single level marketing to sell their goods and later introduced multi-level compensation plans.[20] The DSA has approximately 200 members[26] while it is estimated there are over 1,000 firms using multi-level marketing in the United States alone.



Reference:  www.wikipedia.org

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