A Guide to the 3 Types of Network Marketing Companies

Discover the three distinct types of MLM business models so that you can better understand your new company and how it all works.
A Guide to the 3 Types of Network Marketing Companies

Network marketing sounds like a simple term but there are 3 main business models within it. It’s important to know the differences so you know what your new company does.

The advantage of network marketing is its flexibility. If you want to earn more, you can do so. Those who are open to coaching and work hard can find rewards.

And if you want to keep things simple, you can. But it only works if you’re compatible with your new company.

Read on to learn about 3 types of MLM business models.

1. The Single-Tier Model

This is perhaps the easiest form of network marketing to understand. You can join an affiliate program for selling products or services.

You’re paid whenever someone buys a product or service using your exclusive link. Avon uses single-tier for physical products. ShareASale is a good example within the digital affiliate space.

If you join a single-tier model as a seller, you only need to focus on making sales. You won’t need to recruit any new salespeople or associates yourself.

It’s a good option for more casual sellers.

2. The Double-Tier Model

This model gives you two income streams. The first is the same direct sales model as described above. Sell products or services and earn a commission.

But you also recruit new associates or affiliates into the business. You earn commission on sales they make too.

Within this model is a further MLM business type. In the breakaway model, groups of affiliates form teams of their own when they hit certain goals.

This is a good option if you want to make sales and you want to help friends or family sell too. By recruiting your own affiliates, you can share the income stream.


3. The Multi-Tier Model

These network marketing companies span several tiers. In this case, you earn your commission on sales you make but you also recruit salespeople.

The difference with other models is you earn commission on affiliates they recruit. This gives more earning potential.

You can move up within the tiers based on the amount you earn. Many companies offer incentives and training to help affiliates make more sales.

The 3 Strategies All Models Use

All network marketing companies use the same three strategies.

They use lead generation to find both new customers and affiliates. Marketing is an essential component of this part of the strategy. Check out our guide to network marketing success.

Next, companies sell to these customers and recruit salespeople into their network. Some customers go on to become salespeople themselves.

Finally, these companies train new associates to help them make more sales. Motivation is a key factor in success.

Which MLM Business Models Are Right for You?

Most networking marketing companies operate using one of these three MLM business models. Understanding how your new company works is the best way to get the most out of the opportunity.

But stay open to new information, work hard, and stay passionate about the products you sell. It works for all three business models.

Why not check out our resources for more help with your network marketing?

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Are you thinking of venturing into an exciting network marketing business opportunity? Then, visit our Network Marketing Resources Page! Our resources page contains helpful links that will guide beginners into the complex world of network marketing.


My name is Tanis Zamora, and when it comes to the network marketing industry, I’m a man on a mission! My sole aim is to guide network marketing reps to success in their business venture. I have a deep passion for making training videos, coaching reps, motivating crowds, and building websites. I truly believe that together we can unite the network marketing industry and find true success!

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