What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM?

Business opportunities seem to be popping up out of nowhere these days.

If you are a company owner, you may be wondering whether to tweak your business model to keep pace with the newest social network and marketing methods.

If you’ve always dreamed of becoming an entrepreneur, you may be tempted to jump into the glittering promises of Network Marketing companies that showcase the opportunity to…

“Be your own boss!”

“Ditch the 9-to-5!”

“Generate passive income with no start-up costs!”

Since there is so much confusion about these terms, and the structure behind them, I decided to share my definitions for common business terms.

In this post, you’ll find a cross-section of 10 popular business models, along with my opinion about what is actually happening behind the scenes.

business model, brick and mortar, franchise, direct sales, MLM, multi-level marketing, strategic growth, risk management

I’ll be examining:

  1. Brick-and-Mortar
  2. Brick-and-Click
  3. Brick, Click, and Flip
  4. Home-Based Service Business
  5. Online Business
  6. Franchise
  7. Pyramid Scheme
  8. Direct Sales
  9. Affiliate Marketing
  10. Multi-Level Marketing (MLM)

 

business model, brick and mortar, brick-and-mortar store, business, physical business, strategic growth, risk management

1. Brick-and-Mortar

A Brick-and-Mortar business has a physical storefront that provides products or services on-site, with no eCommerce options.

There are several variations on this type of business:

  • Physical location—space that is leased, rented, or owned
  • Pop-Up Shop—a temporary, rented, and highly publicized sales venue
  • Bazaar, fair, or open house—event where products or services are sold to a broad audience
  • Shared space—a storefront that is used by several business owners

Examples: Local Mom-and-Pop shops (usually family-owned stores such as grocery, hardware, restaurants), solo-owner professionals and practitioners (physician, chiropractor, therapist)

Payment: Customers make purchases of products or services at the office or store location.

Focus: The customer handles the merchandise available in the store and may be influenced by sales, promotional deals, word-of-mouth referrals, and online ratings.

Costs: Very high overhead costs including rent or lease of the space, utilities, personnel, inventory, insurance, and other fees.

Area: Brick-and-Mortar stores are only limited by the availability in a geographic area; but success greatly depends on a location that is attractive to the target market, drives foot traffic, and has proper accessibility.

Pros and Cons of Brick-and-Mortar

Pros: From the customer’s point of view, a physical store allows them to see and touch merchandise, buy the product immediately, be certain about the product’s fit or suitability, easily return items, support local retailers, and enjoy the atmosphere of a physical shopping experience (source: Business Insider).

As a business owner, a physical location can eliminate the middleman, provide face-to-face interaction with customers, and give you more control of your stock.

Cons: Customers may have traveling to your location, may not find the products they want, may not like the look and feel of your store, and not want to waste time & effort shopping at a physical store (when online shopping is so much easier and faster).

Business owners may find it hard to generate interest and foot traffic (especially if their website has no eCommerce option), may experience lower profits due to Brick & Click competitors (see below), and experience rising costs due to lease and overhead expenses.business model, brick and click, brick-and-click store, business, physical business, website, strategic growth, risk management

2. Brick-and-Click

A Brick-and-Click business has a physical store (“Brick-and-Mortar”), offers in-person purchases (“brick”), and has a website that allows online shopping (“click”).

Also called Click-and-Mortar.

Companies that use both of these tactics are able to:

  • Boost offline (in-store) sales by leveraging online data
  • Enhance the customer experience by giving sales associates access to their online account information (purchase history, product recommendations)
  • Install Smartphone beacons in physical stores, which provide customized offers and discounts
  • Integrate inventory and fulfillment, which allows shoppers to buy online and pick up in the store, or have items shipped to their home.

(source: Practical eCommerce)

Examples: Rent the Runway designer dress rental, Sephora cosmetics, Burberry fashion, Macy’s fashion and clothing, and digital health services & facilities offering integrated medical delivery

Payment: Money is usually received both in-store and using an online merchant. Most businesses use the same payment processor for both, such as Square.

Focus: Since this model combines a physical presence with the ease of online shopping, it often attracts more customers than a standard Brick-and-Mortar store.

Costs: Overhead costs of a physical store, as well as a vendor website.

Area: Enhances the reach of a physical location, since buyers can shop from anywhere.

Pros and Cons of Brick-and-Click

Pros: See Brick-and-Mortar and Online Business. In addition, the online shopping option expands the availability of products and appeals to people who are busy, have limited mobility, or aren’t interested in going to a physical location.

Cons: See Brick-and-Mortar. Overhead for a storefront is very expensive. In addition, there are costs to setting up an online shopping platform. The added technology can be confusing, expensive, and frustrating to manage.

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3. Brick, Click, and Flip

A Brick, Click, and Flip business is one that integrates offline (“brick”) and online (“clicks”) access with a physical catalog or other marketing materials (“flips”).

Also known as WAMBAM (“Web Application Meets Bricks and Mortar”)

This model is an increasingly popular way to attract customers who like the ease of digital shopping, but still want a tangible way to interact with the product:

  • Grocery store brand Simple Truth (a Kroger brand) has replaced the typical industry standard (huge, glossy ads) with a personalized 12-page, half-sheet catalog/coupon book that is specifically designed for each customer based on their shopping history.
  • Trader Joe’s sends a monthly 24-page “Fearless Flyer” catalog in a 1900’s-style design which lists new products, featured sales, stories, and a shopping list.
  • Some companies send a Shock-and-Awe package to provide customer with upfront value (a small gift or entertaining multi-sensory box of goodies). The goal is to generate interest, trust, and curiosity. (See a fantastic explanation of this by marketing expert Mike Capuzzi)
  • Another very effective Brick-Click-Flip method is the mailed catalog, newsletter, or printed e-book. Each of these options can provide customers with a more intimate invitation to try your products or services.

Examples: This model is used in the UK by companies like Next fashion & clothing, Tesco groceries, and in the US with Gurney’s Seed and Nursery, Oriental Trading, L.L. Bean clothing, and ULine office supplies.

Payment: Money is collected in the storefront location and online.

Focus: This model adds an emphasis on physical materials (catalog, brochure, handout, shock-and-awe package, and/or mailer) to generate more interest and traffic.

Costs: The overhead costs of a physical store, plus a website, plus marketing materials.

Area: Provides more freedom to a physical store, because buyers can purchase from anywhere. The “flips” (physical materials) often add an extra element of perceived value and authenticity if the buyer is undecided.

Pros and Cons of Brick, Click, and Flip

Pros: See Brick-and-Mortar, Brick-and-Click, and Online Business. The use of a visual, tangible reminder can increase the chance of a conversion, especially if the potential buyer is incentivized to buy or offered a small gift. This model is one of the most successful, because it appeals to a buyer’s needs and learning styles AND provides multiple ways to access the products or services.

Cons: See Brick-and-Mortar, Brick-and-Click, and Online Business. The main downsides of this model are the overhead costs with a storefront, and the additional expenses of physical marketing materials.

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4. Home-Based Business

In a Home-Based Business model, the owner provides products or services to customers out of a home office, rather than a Brick-and-Mortar location. The owner has full control of the business.

There are 3 main types of home-based businesses:

  • owner/operator—an unincorporated form of business where an owner does all the service work herself or himself.
  • sole proprietor—an unincorporated form of business where an owner may work alone or hire employees to do the tasks.
  • solo practice—a business owned by a licensed professional (Accountant, Attorney, Medical Doctor, etc.) which may include support staff. This type of business typically uses the Brick-and-Mortar model, but it can be home-based.

Examples: landscaper, home or office cleaner, handyman, personal assistant, IT developer, makeup artist, seamstress/tailor, personal shopper, gym trainer, life coach, health coach, business coach

Payment: Money is collected prior to products or services being rendered (ideally), or billed and collected after they are rendered (typically). Read more:What is Transaction Avoidance Syndrome?

Focus: The focus is on providing products or services to customers in a unique and useful way.

Costs: The only costs are for materials, machinery, labor, and marketing. A website and advertising are optional; many home-based business owners become very successful using only word-of-mouth referrals.

Area: The only limits are based on how far the owner wants to travel to provide the service. Virtual services (and products that can be shipped) have no geographic limits and can serve customers world-wide.

Pros and Cons of Home-Based Service Business

Pros: See Brick-and-Mortar, Brick-and-Click, and Online Business. The main benefit of this model is the low cost to enter the market. Since overhead is very low, the owner can begin to provide services and generate revenue very quickly—especially with virtual services, since there is no transportation, inventory, or shipping. When the owner provides high-value services in a niche market, profit is likely to be very high.

Cons: See Brick-and-Mortar, Brick-and-Click, and Online Business. There are very few downsides to this model, other than the patience and organizational skills needed to set it up.

business model, online business, website business, online sales, web sales, strategic growth, risk management

5. Online Business

An Online Business is one that only exists online, with no physical presence. All marketing, service or product delivery, and communication occurs virtually.

Also called Online Shopping, Click Business, and e-Commerce.

Sub-models can include:

  • Advertising based—build a website that attracts traffic, then monetize it with advertising that attracts visitors to click and buy from an outside company
  • Affiliate sites—get rebates for purchasing products (see Affiliate Sales below)
  • Drop Shipping—set up a website to advertise products from other companies; when someone purchases the products, your website takes the order and payment, pass it to the fulfillment company (the “drop-shipper”), and are paid a commission based on the gross (the payment minus the cost of delivering the product). Check out Worldwide Brands for a director of certified wholesale suppliers.
  • Physical Product Sales—you find, stock, advertise, and supply products directly to consumers. Amazon is a very popular hub for this type of business.
  • Subscription-Based Site—Customers are charged a recurring fee for using value-based features on the website. Examples include online training, community-based help, accountability, and problem-solving.

Examples: SomethingStore of randomly-selected items shipped to you (“The Joy of Surprise”), Alchemy Goods with recycled and upcycled products, and Delgatto I Do Now I Don’t which offers secondary-market fine jewelry.

Payment: Purchases are made completely online. The customer selects the products or services and pays using a secure vendor like PayPal, Square, or other eCommerce platforms.

Focus: An online business can provide physical products, physical services, virtual products (e-books, guides, software) or virtual services (marketing, designing, coaching).

Costs: Very low costs including website domain and hosting, the site design, copywriting, product or service development, and marketing & sales efforts.

Area: No limits geographically; online businesses can operate anywhere in the world where there is an internet connection.

Pros and Cons of Online Business

Pros: See Brick-and-Click and Online Business. This model has very low overhead costs and is extremely appealing to a large segment of buyers.

Cons: See Brick-and-Click and Online Business. The main drawback to online transactions is that they can be very impersonal, with little or no human interaction. It is important to design a customer acquisition funnel that appeals to buyers at all stages in the buyer’s journey (Awareness, Consideration, Decision). Customers have come to expect a buying experience that is entertaining, simple, and personalized.

business model, franchise, franchising, franchise store, physical store, strategic growth, risk management

6. Franchise

A Franchise model requires the purchase of an established, proven, systematized business. It includes all the branding, advertising, marketing, policies & procedures, and training materials needed to run a successful company. The franchisee invests a significant up-front cost and ongoing royalty payments in exchange for the license, strategic and operational support, access to a loyal customer base, and training from the company’s main office.

Examples: Entrepreneur Magazine shares a “Franchise 500 Ranking”; the top 10 franchise brands include:

  1. KFC US LLC
  2. Dunkin’ Donuts
  3. McDonald’s
  4. Subway
  5. Baskin-Robbins
  6. 7-Eleven Inc
  7. Taco Bell
  8. Dairy Queen
  9. Papa John’s International
  10. GNC Franchising

Payment: As with a traditional brick-and-mortar business, franchise owners generate revenue from customer sales and make a profit from the difference between gross sales and operational expenses (lease or rent, utilities, personnel, inventory, insurance, and franchise fees).

Focus: The emphasis is on building a profitable business, not in recruiting others to “join” as franchisees. Franchise owners often set very strict rules about how to operate the business (price setting, marketing, advertising, operations, etc.).

Franchisees have some control over the profitability of their location, but are very limited in their creativity or ability to implement innovative changes.

Costs: It’s very expensive to become a franchisee. In addition to a $20,000 upfront investment, you also need money for startup purchases including equipment, supplies, lease or rental, and inventory.  The total cost can reach $250,000. Plus all franchisors require a monthly percentage paid back to them, which lowers profit margins.

Area: Nearly always determined by the franchise owner due to competition; locations are selected based on their ability to reach the target market, attractiveness, and accessibility.

Pros and Cons of Franchise

Pros: A well-established and loyal customer base, marketing and business support from the main office, training, reputable suppliers, new product development, less risk than starting from scratch.

Cons: High initial fees, plus start-up costs (up to $250,000), ongoing royalty payments, advertising and marketing fees, long-term contract, locked in to buying from approved suppliers, limited creativity, long hours, staffing headaches, dependent on the franchisor’s ultimate decisions.business model, pyramid business, pyramid scheme, pyramid model, pyramid MLM, pyramid company, strategic growth, risk management

7. Pyramid Scheme

A Pyramid business model starts with an upfront investment in which a participant contributes money with the expectation of receiving a substantial investment return. The earliest “investors” may receive some financial return, but additional levels of investors are needed to cashflow the ballooning fund until it is no longer sustainable. In this model, no product or service of inherent value is being exchanged.

Examples: The most obvious schemes include the Ponzi Scheme, invented by Charles Ponzi in the early 1900s; and copycat fraudsters Bernie Madoff, Michael Eugene Kelly, Lou Pearlman, and Gerald Payne (read more here). Another destructive scheme was at Enron, which cost investors billions of dollars.

The FTC and other governing agencies are investigating fraudulent activity in many MLM companies, including:

(Despite ongoing investigations, many believe the FTC has not done enough to clearly define and discourage deceptive practices.)

Payment: Once several initial “investors” are persuaded to hand over their money (with the promise of a much bigger return), additional investors are lured in. The initial investors often get a partial payment early in the cycle to keep them hooked. But as the pyramid gets bigger, there is not enough money available to reimburse everyone who has paid into the scheme.

Focus: The main reason someone develops this fake business model is to generate cash. A victim’s financial loss and emotional harm is not of concern to the pyramid schemer.

Costs: There may be an investment to create a “front” and lure people into the trap.

Area: Pyramid schemes take place everywhere in the world. It is only limited by the schemer’s ability to attract and influence unsuspecting victims.

Pros and Cons of Pyramid Scheme

Pros: Since this type of model is illegal and unethical, there are no redeeming qualities about it.

Cons: The “pyramid” business model is illegal in the United States and in many other countries worldwide. It relies on participants who are eager to get a “quick return” for their investment, as well as a desire to see the scheme work out even if there are clear warning signs. We call this “sunk cost bias”—when we realize something is harmful, but we continue to contribute to it because otherwise we would have to admit we made a huge mistake and accept the fact that our money is “sunk,” or already spent.

business model, direct sales, direct selling, direct networking, network sales, strategic growth, risk management

8. Direct Sales

In the Direct Sales model, a hired or contracted salesperson has face-to-face (“direct”) interaction with customers and earns a commission for each product or service sold.

There are two variations of Direct Sales:

  • single-level—the salesperson makes money by buying products from an organization and selling the products directly to customers
  • multi-level (also known as network marketing or person-to-person marketing)—the salesperson earns money from both direct sales to customers, and by getting a commission payment for sponsoring new sellers who work under them.

Although the single-level direct sales method was popular in the past, it has been largely replaced by the more lucrative multi-level (MLM) approach (which I describe later in this post). The two terms are nearly interchangeable, although Direct Sales reps are not required to recruit others in order to generate revenue, while MLMs see recruitment as the essential way to “build a downline” and without which financial success is difficult to achieve.

Examples: Direct sales has been around for centuries in the form of traveling and door-to-door salespeople. Companies which have used this method for over a century include Fuller Brush, Encyclopedia Britannica, Kirby Vacuums, Avon (with their famous tagline “Ding dong, Avon calling!”), and Tupperware.

(Check out Uncle Rico’s hilarious Tupperware venture in the 2004 hit movie Napoleon Dynamite!)

Payment: Direct Sales reps receive a commission for every item sold.

Focus: The focus is on selling products to consumers, not on recruiting.

Costs: Some companies require the purchase of a “starter kit”; reputable ones do not. Reps are usually responsible for their own transportation costs.

Area: There is usually an assigned geographic area to prevent sales reps from compete with each other directly.

Pros and Cons of Direct Sales

Pros: If done using the single-level model, Direct Sales can be very successful for individuals with a particular personality type and temperament (assertive, love being around people, not afraid to hear rejection, people-oriented, driven to achieve goals).

Cons: Although this model can be lucrative, it is very expensive due to the extremely high startup costs, marketing and promotion, website and eCommerce, and—most significantly—the cost of paying sales reps (commissions, bonuses, gifts, extravagant trips, training, tools, etc.). Traditional direct sales companies also limit the geographic area where their reps can sell. Many people have become wary of the intrusive, pushy nature of in-home selling, despite its popularity.

See more info in the Multi-Level Marketing section below.

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9. Affiliate Sales

In the Affiliate Sales model, an “affiliate” partners with an established company (such as Amazon, Ebay, Walmart, and other national brands) and earns a commission for each visitor or customer that is funneled to the merchant by the affiliate’s own marketing efforts.

Also known as Affiliate Marketing

Examples: eBates cashback website, Affiliate Future (based in the UK), CJ Affiliate

Payment: The referral fee can be a percentage of the purchase or a flat fee.

Some “affiliate training programs” pay a residual fee for each new member who is referred to the program. The end consumer is not burdened by extra fees; they pay the same retail price with an affiliate that they would from a retail purchase.

Focus: Income is generated from the amount of web traffic to your website. A successful affiliate designs several attractive, SEO-friendly, compelling websites that are effective at funneling “clickthroughs” to the merchant sites. Affiliates do not need to sign up other affiliates, although referral programs may incentivize recruitment.

Costs: There are no startup costs (unless you join a membership site). There are also no monthly fees, other than website domain and hosting costs.

Area: There are no geographic limits, since all transactions are done virtually.

Pros and Cons of Affiliate Sales

Pros: This method can be very lucrative for those who are tech-savvy, patient, and persistent.

Cons: Running a successful affiliate business can be very difficult. The key is to get the formula right, which takes tech known-how and a lot of practice. Affiliate payments are often very low unless you develop a series of websites and methods to generate passive income.

Be cautious of “advisors” who offer services to help you set up affiliate websites, as these can often be predatory and will only lure you into spending money without offering any actual value in return.

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10. Multi-Level Marketing (MLM)

The Multi-Level Marketing model uses a systematized compensation system in which an Independent Contractor (IC) sells products or services (either to consumers or to themselves), AND where they get an incentive to recruit additional distributors under them in multiple “levels.”

In theory, this model is brilliant: it can succeed with a mediocre line of products, a catchy slogan, well-executed marketing package, and early buy-in from charismatic influencers. However, MLMs can easily become fraudulent, deceptive, and predatory.

Find out more: Helpful Info About MLMs

Multi-Level Marketing is also known as:

  • Cellular Marketing
  • Concentric Marketing
  • Consumer Direct Marketing
  • Direct Selling
  • Dual Marketing or Dual-Level Marketing
  • Home-Based Business Franchising
  • Inline Marketing
  • Network-Based Affiliate Marketing
  • Network Marketing
  • Person-to-Person Marketing
  • Party Plan
  • Pyramid Selling
  • Referral Marketing
  • Seller-Assisted Marketing

Read more at A (MLM) Skeptics excellent article, MLM Basics: Why are there so many names for MLM?

The methods used in direct selling can take a variety of forms:

  • 1-on-1 Consultations—meeting with a potential customer at a 3rd party location for a cup of coffee, in their home, or in your home to discuss the “business opportunity.”
  • 1-on-1 Demonstrations—these are often called “facials,” “tutorials,” or “class,” but are really just a decoy to promote their products in a high-pressure environment.
  • In-Home Parties—the most common direct sales activity, often called a Trunk Show, takes place at the home of a “hostess,” who gets rewards for pressuring her guests into purchasing the products and signing up as representatives.
  • Phone Sales—also known as “cold-calling,” where the rep calls potential buyers on the telephone.
  • Vendor Events & Trade Shows—community expos, Mom-to-Mom sales events, craft fairs, wedding shows, and other avenues to meet new customers.
  • Networking Events—meeting new people in a “warm” market (normally intended for true business owners and sales professionals, not network marketer sales reps)
  • Online Parties & Information Sessions—a low-cost way to reach a large audience, educate them on the products, and recruit new sales associates on the “Business Opportunity.”
  • Internet Sales—setting up a website with shopping capabilities, then drive traffic to it
  • Social Media “Call to Action” Posts—connecting with others by sharing tips, inspiration, news, sales, and promotions

MLM products sales can also take place at Brick-and-Mortar locations:

  • Physical location—space that is leased, rented, or owned (although many MLM companies prohibit this)
  • Shared space—a storefront that is used by several business owners
  • Pop-Up Shop—a temporary, rented, and highly publicized sales venue
  • Bazaar, fair, or open house—event where products or services are sold to a broad audience

In order to generate money, most MLMs offer a variety of “income generation methods” to their Independent Contractors (ICs).

Here are the most popular:

  • Retail Sales Commissions—ICs earn profits on their sales to customers, which is usually calculated as the difference between the retail (customer) price and the “preferred” price offered to MLM Distributors. Note: The “preferred” price has a healthy profit built into it; MLM companies do not offer “Wholesale” prices to their ICs, despite what they may claim.
  • Team Commissions—ICs earn a commission on the percentage of their own sales, plus the sales volume of their team.
  • Travel Incentives—ICs are told they can “earn” perks like luxury travel, prizes, and cash with incentive programs, which are always designed to encourage them to generate more revenue for the company.
  • Luxury Car Bonus—When an IC has sold enough product and/or recruited enough people, they “qualify” for a leased car (selected by—and withdrawn at—the discretion of the company).
  • Matching Bonus—ICs can get an additional commission by sponsoring new team members.
  • Earnings Bonuses—If they make it to a “top earners” status, ICs can qualify for a quarterly bonus (based on sales performance).
  • Leadership Bonus—ICs may get an additional weekly bonus (based on how many people they recruit to their “downline”).
  • Product Bonus—ICs can earn additional bonuses (“tax-free sales price!”) when their recruits purchase a Premium initial product order (as an incentive to get their downline to buy more products)

Examples: There are hundreds of MLMs around the world, with more launching every week. See a complete list of Health & Wellness MLMs here.

Payment: In this sales model, the IC agrees to sell and distribute the company’s services or products under very strict guidelines.

Focus: The focus is on both selling product and recruiting. In some MLMs, the emphasis is much heavier on the recruiting side than on the products being sold.

Costs: MLMs usually require the purchase of a startup kit and/or inventory, ranging from $39 to $6500.

The retail cost of MLM products is artificially inflated to compensate for the commission fees that are built into the model. Many ICs sign up solely to receive a “discounted rate” for their own purchase of products (which is still higher than a wholesale cost would be). MLMs require ICs to purchase a minimum volume of products several times a year. If the IC cannot sell enough in that period, they often rack up credit card debt by purchasing more products to “qualify” for the discount.

Area: There is no assigned geographic area; ICs are often in competition with each other for a limited pool of potential customers. ICs are encouraged to sell to their friends, family, and new acquaintances.

Pros and Cons of Multi-Level Marketing

Pros: Many MLMs promise flexibility, financial freedom, and a sense of community and belonging. However, they often end up encouraging sales reps to rack up debt and use high-pressure techniques to lure others into joining.

Cons: MLMs are generally predatory, which means they seek out individuals who are in a difficult situation, and appeal to their need for stability, acceptance, and recognition.

Technically, any company that provides a product or service (even if it is over-priced and low-quality, as with most MLMs) are not considered “pyramid schemes.” However, this does not mean that MLMs, network marketing, and direct sales ventures are legitimate. In many cases, these businesses use unethical, dishonest, and immoral practices to generate high profits for the owners, and very little profit (or debt) for distributors.

Perhaps one day, regulations will ban businesses from engaging in the unethical practices that make many MLMs so dangerous to vulnerable consumers.

Conclusion

It is quite possible to create and run a successful business. The only requirements are a significant investment of time, effort, and discipline, along with proper planning and ethical practices.

In this article, I’ve explained the differences between 10 different business models:

  1. Brick-and-Mortar
  2. Brick-and-Click
  3. Brick, Click, and Flip
  4. Home-Based Service Business
  5. Online Business
  6. Franchise
  7. Pyramid Scheme
  8. Direct Sales
  9. Affiliate Marketing
  10. Multi-Level Marketing (MLM)

Of all of these, I believe the most effective are

  • #2 (Brick-and-Click),
  • #3 (Brick, Click, and Flip),
  • #4 (Home-Based Business), and
  • #5 (Online Business).

Each of these offers a structured, ethical vehicle to provide niche services & products to Ideal Customers.

In my opinion, there are two business models that tend to be unethical and predatory:

  • #7 (Pyramid Schemes)
  • #10 (Multi-Level Marketing)
  • #8 (Direct Sales)—because this has become so closely associated with MLM

I do not recommend using any of these models and believe there are much better ways to generate high profits using the techniques mentioned in this article.

The ability to successfully start and run a business depends on your personality, drive, and focus. If you use common sense, do your research, and evaluate the risks and benefits before agreeing to any new business venture, I am certain that you will achieve your goals.

For more info on MLMs, check out:

MLM, multi-level marketing, network marketing, definitions, MLM definitions
MLM Definitions
MLM, multi-level marketing, network marketing, helpful info, MLM info
Helpful Info About MLMs
MLM, multi-level marketing, network marketing, complete list, MLM list, MLM companies
Complete List of MLM Companies

If you have questions about your business model, let’s talk. Schedule a free 30-minute initial consult today.


Grace LaConte is a Strategic Risk Expert who helps service business owners find and fix organizational vulnerabilities. Using her experience as a Risk Officer in the healthcare and technology fields, Grace shares a refreshingly honest approach to uncovering hidden risks and opportunities. Learn more at http://laconteconsulting.com, or connect with her on Twitter @lacontestrategy.

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