Glossary
Network Marketing
Network marketing is a common industry name for multilevel marketing, emphasizing the personal and social networks distributors use to find customers and recruits rather than the compensation mechanics themselves. The two terms describe the same underlying business model, and companies often prefer network marketing because it carries a softer tone than multilevel marketing or MLM.
Also called: relationship marketing
Why it matters
Because network marketing and multilevel marketing refer to the same model, a company's choice of label does not change how its compensation plan actually works or how a regulator would evaluate it. Distributors should look at the compensation plan itself rather than the marketing term a company uses to describe its business.
Example
A company that calls itself a network marketing business and a competitor that calls itself an MLM can run functionally identical compensation plans, both paying distributors on personal sales and on recruited team sales.