Question: Will you explain the difference between MLM and Party Plan?  I think that MLM is the same as Network Marketing, but are these different from direct selling?  And how do I know which is best for our startup?

Answer: “Direct selling” is the generally accepted term the selling system that moves products and services directly from a company to its users and consumers.  The selling is performed by the independent representatives of the company.  Worldwide, companies sell an estimated $118 billion in goods and services through this massive distribution system of person-to-person marketing and sales, with as much as $28 billion of that in the United States.  (Sources: Direct Selling Association, www.dsa.org, and the World Federation of Direct Selling Associations, www.wfdsa.org)

Some MLM Consultants teach that there are three methods of person-to-person selling:

1. Direct Selling
2. Party-Plan Selling
3. MLM or Multi-level Marketing

The LaunchSmart MLM consulting team suggests a subtle distinction, which is that direct selling is the umbrella under which two methods of selling reside: MLM and Party Plan.  Direct selling is a generic reference to the movement of goods and services directly from company to consumer, where sales commissions are associated with the sales efforts of the company’s independent sales force.  Party-plan sales commissions are generated through group selling, often with retail commissions plus incentives for gathering a group together.  Party-plan compensation leverages a one-to-many sales presentation.

MLM compensation plans pay commissions for personal sales, accumulating commissions and bonuses on sales that are related through sponsoring lines.  Both MLM and Party Plan methods link individual sponsors and business builders, often paying compensation through, and/or as a result of, these connected lines.  These methods are sound and very legal since compensation is tied only to the sale of products and services, and not to the act of sponsoring someone.

Advantages that are common to MLM compensation plans and Home Party Plan compensation include the following:

• Sales representatives need not stock products other than those used for demonstration or samples
• The company ships directly to the distributor or customer who makes the purchase
• MLM presentations and Home Party Plan demonstrations are ideal for presenting products that require explanation
• MLM compensation plans, like Party Plan compensation plans, pay for sales personally produced, with commissions and overrides paid to those who train and manage individuals and groups in their sales organizations
• Distribution channels, once established, are the marketing channels through which information, goods, and services are moved
• Part-time to full-time selling, with incentives for immediate action, are characteristic of successful MLM compensation plans and Home Party Plan compensation systems

Through MLM (multi-level marketing, network marketing, viral marketing, referral marketing, etc.) the direct-selling process is duplicated by independent sales reps who sponsor and train others.  Through this basic system of selling, on which virtually all sales systems are based (from insurance to real estate, and from automobiles to men’s clothing) multiple levels of commissions are earned, paid directly from the company to the sellers, managers, and leaders.  This basic concept applies in both the MLM and Home Party Plan selling models.

For a Free MLM Consultation or Free Party Plan Consultation, contact the MLM Consultants at LaunchSmart.  We want you to succeed, since your success is our success.

Occasionally, we just want to see how carefully our readers are going through the blogs.  No doubt, there is a lot out there about starting and running the successful MLM business.  From Free Manuals to big-ticket consulting, it’s all there to help you successfully launch your MLM.

We’ve witnessed some great and some not-so-great MLM launch events, and here is a simple lesson we have learned about planning a successful MLM launch meeting.

Your MLM launch event is quite possibly the most important event you will ever hold.  It can be the spark that starts a wildfire of momentum.  The tasks—and timing of those tasks— associated with the MLM launch event are outlined in a very detailed project plan that we follow for our clients.  Because of the importance of this event, we provide this tool for our clients to use for preparing the MLM launch event to help them consider and organize all the important details that must be addressed.  If you will send me an email and request our detailed MLM launch event checklist–be sure to mention this blog in your email–I’ll send it to you for free, just for asking.  Be sure to email terrel@launchsmart.com and put “MLM Launch Event Checklist” in the subject line.  Write a brief note and tell me how you are planning to use the checklist.

Are you worried all your startup capital will be eaten up by expensive MLM consulting?  You are not alone.  Here are questions that the best MLM entrepreneurs and Party Plan owners wrangle with:

•    What is the best use of my time as I balance all of the demands placed on me?
•    Are there others whom I can lean on for guidance, encouragement, and expertise?
•    Can I find affordable MLM consulting with expert MLM consultants?
•    Is there anybody I can be friends with who will treat me as a friend—with respect and dignity—and who will not exhaust all of my MLM startup capital?

If the typical entrepreneur were to keep a diary for one month of all her business activities, she would likely discover up to 80 percent of those activities to be nonproductive and diversionary.  Most businesspeople fail to focus on managing, strategizing, and working on higher-performing, constant-growth issues.  They just keep on spending time, money, and human capital the way they’ve always spent it, and they achieve the expected plateau-causing results.

Ironically, the habits that are formed during MLM startup and launch usually carry through to all phases of growth and expansion.  The good news is that some businesspeople have learned to be strategic.

The best way to learn to be strategic is to take time to think strategically, to plan strategically, and to work around strategists.  Most businesspeople fail to view time expenditure the same way they view all other expenditures in their lives—even though time is one of the three most precious, intangible assets they possess.  (The other two are energy and opportunity costs.)  Indeed, they waste time on unimportant things when they could be investing in their strategy.  As a result, they miss out on valuable opportunities to timely launch, grow and expand their business.  Most people just don’t make the highest and best use of what they’ve got.  Fortunately, you no longer have to count yourself among their ranks.

Everybody knows at least one highly productive person, someone for whom there seems to be more than twenty-four hours in a day.  This person is ten times more productive than her competitor because she understands the concept of highest and best use.  It’s a rather simple—yet arguable—concept: Use your time to produce the greatest strategic, long-term payoff.  It’s that simple.  So, just use your time and your talents to the maximum potential—simple, right?

And yet, most of the business world fails to do it.  And this can be even more true in the intense, complex process of starting and running an MLM business or Party Plan company.  If you’re not practicing the concept of highest and best use, you’re sacrificing your potential, your precious MLM startup capital, your profits, and your future.

Try this exercise right now that will help you identify your “highest” and “best.”  Start by writing down the three most critical tasks your new MLM startup requires to get launched from where you currently are.  Then break down those three tasks into sub-tasks, for which there are usually as many as seven.  Finally give each of those sub-tasks three different values based on their relevancy, your competency, and your true passion for doing them.

Now review what you have come up with.  If the task is not relevant but you’re competent at it, it’s a waste of your time.  If your competency in a particular task is less than average, then you’re not the most efficient person for the job, which means it’s a huge expenditure of energy and, again, a waste of your time.  For example, why should you receive and count inventory if doing so eats up half your day?  The point is not that the inventory should not be properly received but, rather, that you shouldn’t be the one receiving it.  Get someone else to do this task, then spot-check or audit his or her work.

What this exercise will do is determine which tasks you should remove from your to-do list, so that you can put yourself into the power position that brings the greatest yield.  Whatever your tasks and subtasks may be as you start and operate a successful MLM company, it’s imperative that you work on the tasks that are most important for you.  Here’s the bottom line:

Anything that isn’t relevant, that you’re not competent in, or that you’re not completely passionate about should be delegated to somebody else.

This is true even if it means you need ten people doing the same job 80 percent as well as you.  That still amounts to eight times greater efficiency and results than would be the case if you did 100 percent of the job yourself.  It frees you up to focus you most precious assets—your time, energy, and opportunity costs—on the things that matter most and that deliver the most meaningful results at the crucial time of starting and running a multi-level marketing company or party plan business.

Now, what does this all have to do with free MLM consulting?  We realize the absolute power in leveraging your time, and as our investment in a potential future relationship, we offer free MLM consulting and free Party Plan consulting.  Just call and ask us!  No obligation, no strings attached.  You have our word on that.