While on the surface, MLM and Direct Sales businesses may seem very simlar, they are, in fact, quite different. And while each has their pros and cons, I will try to highlight some of the major difference here for you.

I think of Network Marketing as the overall heading which both MLM and Direct Sales falls under in regards to the home based business model and each may have some cross-over to the other.

In general, when one refers to MLM or Multi-Level-Marketing, one is generally referring to a business model whereby you build a team on different levels and earn a percentage from each person on each level according to their monthly usage or purchase of a product, usually some type of consumable product, preferrably, so that the product is repurchased month to month.

Direct Sales on the other hand, refers to a person selling a one-time product directly to another individual or company for a one-time payment. With the advent of th 1-up and 2-up direct sales compensation plan, however, one can now earn from the efforts of others to leverage their income in the direct sales arena.

While both business models offer the lure or easy money, you must really weigh the profitability and and ongoing expense of each opportunity to determine which business model is better suited for you.

In a typical MLM structure you must refer many members to earn a small percentage of their monthly purchase. And each of the members that you refer, also must refer members so that your downline, or levels, continue to grow in order for your income to increase.  You also must wait for the company to send you a check each month or bi-weekly, depending on the payment schedule of the company. And while you are waiting for your downline to grow, you must continue to purchase your monthly allotment of products in order to remain eligible for the compensation plan.

With a typical Direct Sales company, however, you make a sale and receive payment, you make another sale and receive payment.  Your compensation is directly contigent upon your efforts alone. A typical direct sales company doesn't offer a leverage income, meaning, to get paid you must make another sale.

The model I personaly like is a Modified Direct Sales Opportunity, which I believe offers the best of both worlds.

In this type of business model, the company is structured in such a way that each person you make a sale to, who also becomes an affiliate, must pass-up their first and/or second sale to you. In some companies, they must pass up the total sale amount and in others they only pass up some of the sale amount. The pass-up referrals that you receive must then also pass up their one or two first sales, thereby creating a leveraged income for you.

Another thing that I like about these modified Direct Sales Companies is the member to member payment structure that many have implemented. Now it is no longer necessary to wait for the company to pay you. When you make a direct sale to a person or entity, you recieve your payment directly to you in the manner in which you choose, whether it be by online account or through the mail.

These new modified Direct Sales models are often referred to as GPT models or Get Paid Today models.

Some have a big ticket purchase price with monthly admin fees, some are less expensive with monthly administartion fees and yet others have no monthy admin fees. But one thing they all tend to have in common is the direct member to member payment structure.

 If you are looking to start your own home based business, one or the other business models will be right for you, but only you can decide which one best fits your needs.

I encourage you to do your due diligence on each of the business models outlined before jumping into any of them.  But I highly recommend that you start looking at one of these alternatives to the traditional employment model, especially in these tough economic times.

Remember, change doesn't just happen, you have to make it happen!