SLM (Single-level Marketing) vs MLM (Multi-level Marketing)

Single-level marketing (SLM) is a traditional business model in which a company sells its products directly to the end-customer through a salesperson. The salesperson/distributor earns a commission on each sale they make. Typically, salespeople/distributors purchase products from the company at a wholesale price that is tied to specific sales targets. As they surpass their monthly sales goals, they become eligible to buy at a progressively higher wholesale price.

Multi-level marketing (MLM) is a sales model in which individuals sell products and also recruit and train new salespeople, who then sell the products and can also recruit additional salespeople. Commission is earned on both personal sales and sales made by one’s recruits. This creates multiple levels of compensation and a “downline” structure.

In SLM, the focus is on direct sales, while in MLM, the focus is on building a network of salespeople who will sell the products and recruit others to do the same.

Both SLM and MLM can be legal and ethical business models, but MLM has sometimes been criticized for its potential to become a pyramid scheme, where the focus is on recruitment rather than selling products.