When it comes to making money online, many people consider the choice of whether affiliate marketing vs MLM is the right option for them.
There are key differences between the two and you need to ensure you pick the right one, to avoid months of frustration from getting it wrong.
To help you make the right decision, we’re going to run you through all of the key differences between the two…
Affiliate Marketing & MLM are both really popular, mainly because there is no prior experience needed to get started. The start-up costs are relatively low, and they’re both legit.
But that being said, there are still many scams disguised as both affiliate marketing and MLM opportunities, which you need to be aware of too.
I’m going, to be honest upfront and let you know I do personally prefer affiliate marketing. It’s the way I make money online and it has a lot fewer restrictions in place. Having said that, my blog post will give you both sides of both business models to ensure you can go away and pick the right option for you.
It’s a personal choice and you need to be comfortable with your decision, regardless of what I think.
So… Let’s get started with our Affiliate Marketing Vs MLM Head-to-Head…
Table of Contents
Affiliate Marketing Vs MLM: What's The Difference?
Many people make the mistake of assuming that affiliate marketing and multi-level marketing (MLM) are the same business model.
There are similarities, in that they both offer a way for people to make money from home and the potential to quit their day job and spend more time doing something they love.
But they both do it in completely different ways, as we’ll describe as we go through both business models.
But before we go into that in more detail, you should know that MLM has a number of different names. For example, it can also be referred to as “Network Marketing” too.
There is also a lot of people who think that MLMs are all Pyramid Schemes. Which isn’t accurate or fair (in some instances).
What is MLM (Multi Level Marketing)?
As I said, there are several different ways you can describe an MLM – Network Marketing, Referral Marketing, and Pyramid Selling, and there are also several “Direct Sales” companies that are just MLM companies.
MLM offers two main ways for you to earn money. the first option is where you join the company and have the chance of making money by selling the company’s products directly to consumers.
These “distributors” (which can also be known as consultants, representatives, or associates) can also recruit other people into the company to also sell the products the company offers.
These people they recruit become their “downline”, and they can earn bonuses or commissions based on the sales that this team make.
The reality is that the money is with this recruitment side, rather than by just selling the products. If you want to make good money with an MLM, you are going to need to work hard and build up a team of consultants under you.
This is what often leads MLMs to be linked to pyramid schemes, as this recruitment side starts to look a lot like this…
In practice, the MLM business model only really benefits the people at the top of the tree (or pyramid), whilst everyone else is working hard for not much return.
Now, whilst most MLM’s recruitment side does resemble a pyramid scheme. That doesn’t automatically make every MLM a pyramid scheme.
For starters, MLMs are legal.
Pyramid schemes are not. If you do get involved in one, you risk a lot more than just losing your money. You could also get prosecuted.
Now, if you do find yourself a legitimate MLM, that still doesn’t mean you should rush to sign up for one. Just like with Pyramid Schemes, MLM businesses only really benefit the people at the top. You’ll need to consider the individual business and whether you’re going to be able to crack it and get yourself to the top.
Multi-level marketing involves a bunch of startup costs. And while recruiting people to the MLM network and selling products to end users can earn them some money, MLMs typically don’t make enough to recoup that upfront expenditure.
If you’re considering starting a business around health and wellness, personal care, weight loss, skin care, or makeup, then you will find there are tons of MLM opportunities.
Products will include things like nutritional supplements, skincare and makeup, diet programs, etc.
The way MLM’s are pitched is that it’s a win-win situation for both parties – the company and the consultant. As you are able to sell the products to your friends and family and earn a living from it and the company saves millions on advertising campaigns.
But in my experience, there is a big difference between those who are earning the big money at the top of the pile and those who are struggling to meet the monthly sales quota.
MLM (Multi Level Marketing) Pros & Cons
Here are the most common pros and cons of an MLM business opportunity…
- It is possible to make money from home
- There is no need for you to create your own product
- You “work” in a team
- It offers a Personal Development Opportunity
- The MLM companies have expensive products
- The majority of MLMs have a monthly sales quota for members to achieve
- The Startup Costs can add up, even before you try it out
- You’ll be encouraged to sell/recruit your friends and family
- Most people lose money (92.3% of all members)
- The people who do make money are, because of other people losing money in your “downline”
- There is usually an emphasis on recruiting
MLM is a legitimate business model. It can also be a way of being able to make money from home.
But there is a strong emphasis on building a team and then helping your team become better consultants.
When it comes down to it, you’ll need to be a great recruiter and great trainer if you want this business model to work for you. To earn a decent living from it, you will need to work extremely hard.
MLM products are typically very expensive when you compare them to the alternatives you’ll find on the market. You’ll also need to sell a certain number of products a month to remain active for commission.
But what ends up happening (typically) is that the MLM members end up having to buy these products themselves.
The alarming statistic is that most MLM distributors end up losing money within MLM companies…
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MLM: Be Aware of Pyramid Schemes in Disguise
Before we move onto affiliate marketing, I just wanted to touch on this point…
It’s so easy to assume that every MLM is in fact, a Pyramid scheme. When you look at their compensation plans and their focus on recruitment, it’s easy to see why so many people believe this.
But it’s really not the case. However, you should know that it can be easy for an MLM to hide behind the fact their members can sell products, when their whole business setup is based on recruitment.
The only real way of making good money is through recruitment, which means they are acting like a “Pyramid Scheme in Disguise”.
They know their products are too expensive, but they know their consultants will be stuck having to buy them every month to remain active (for commissions). Ergo a Pyramid Scheme in Disguise.
Any company that puts more of a focus on recruitment rather than selling products is operating like a pyramid scheme.
Pyramid schemes are unsustainable as the diagram from Wikipedia shows
The problem is… If you don’t know what to look for, it’s easy to miss an MLM that is operating like a pyramid scheme in disguise. Or the other way around.
This 5-minute video will help you learn how to spot if an MLM could be a pyramid scheme in disguise…
Most MLMs do appear like a pyramid scheme in disguise. This is down to them offering expensive products, with a monthly sales quota, which pushes their members into recruiting to stop losing money.
But, not all MLMs are like this. There are some legit ones out there too. You can usually spot them straight away, as they have reasonably priced products and no monthly sales quota.
The problem is… These are usually really hard to find…
Now, we’re going to go through three case studies. That way you can see the differences between a legitimate company and a pyramid scheme in disguise…
Case Study #1: A Pyramid Scheme
If an MLM is only offering one way for you to make money and that involves recruitment, then you know straightaway it’s a scheme you should avoid. An MLM that only talks about recruitment is typically a Pyramid Scheme.
Prosperity of Life is an MLM that claims to offer “Personal Development” training that you can attend, and then be able to make some money from them.
On the face of it. It looks fine, as personal development is a big factor in MLM, so why wouldn’t you consider some additional training with it?
But that wasn’t really what you were getting. It had clever marketing to make you think that you would be learning all sorts of things relating to personal development.
But the reality is that it was teaching you how to resell Prosperity of Life to others. This meant there wasn’t really a product relating to personal development (clue 1 – no real product to speak of).
All it was is a clever sales funnel to get you to recruit others into the same scheme (clue 2 – recruitment).
All they would need to change is to offer some valuable training on personal development. But they haven’t they’ve chosen the easy road.
But when recruitment is your only option, it means that it’s impossible for everyone to make money… Which makes it a pyramid scheme.
Case Study #2: A Pyramid Scheme in Disguise
These are the most common examples you will see when researching an MLM to sign up with. There are a few signs that make them easy to spot:
- Overpriced products – I mean over 100-150% above others you would find online
- Monthly Sales Quota – You have to sell so many a month or have to buy them yourself
- Recruitment – The only realistic way of making money is to recruit a team that buys the products instead
Pyramid Schemes in disguise typically sell ridiculously expensive products. They are usually 100% or more than competing products elsewhere. They then place a monthly sales quota for their members to achieve, to remain active.
Your only options are to keep on buying these overpriced products each month (and find somewhere to store them) or recruit others and then earn an income based on their misery.
Here’s an example to show you what we mean…
Le-Vel Thrive is an MLM where it costs you $100+ a month to remain an active distributor.
But you can only earn 20% commissions for any product sales you make. This shows that most members will be hundreds, or even thousands of dollars out of pocket before they can sell anything. then when they do, they will only be making $10-$50 from their sale.
When you think about the way the company operates, it soon becomes clear that there is a huge emphasis on recruiting. Recruitment is the only way of making decent money from this type of MLM.
Once you’re able to recruit two or more people, you’ve passed that inconvenience onto them. But you have to keep them active if you don’t want to have to keep on buying the products yourself.
We’ve seen this happen with all sorts of MLM, including those in health, wellness, weight-loss, and skin care…
Case Study #3: Legitimate MLM Company
Not all MLM companies are bad, and there are a few that do want their distributors to focus on the products and not the recruitment side.
Farmasi is such an example. They will tell you that they are a “direct selling” company. But as you are able to earn bonuses from your downline sales, it does make them an MLM company. But one of the good ones.
Their makeup product line is good quality and is reasonably priced too. Their distributors can also earn 50% commissions from any sales too.
This shows that Farmasi are focusing more on product sales, than on recruiting more distributors.
It also shows that they are offering products that consumers actually want and like, making their products easier to promote.
But how much are you likely going to be able to sell in person to your friends and family? If only there was a way to use the internet to sell for you 24/7…
These 3 examples just show you how confusing it can be when trying to understand whether an MLM is worth a try or not. But sometimes you just need to trust your gut. If something doesn’t feel right, then it’s not the right business to work with… There are too many MLM’s operating like a pyramid scheme in disguise…
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What is Affiliate Marketing?
Now, let’s move on to Affiliate Marketing. First off, Affiliate Marketing is 100% legitimate. But it too struggles with scam artists fobbing off scams as legitimate business opportunities…
Successful affiliate marketers can genuinely earn a decent income — even a job-replacement income — by promoting products through their social channels, online groups, and their own affiliate website.
Affiliate Marketing is a method of earning commissions by promoting other people’s products. This is in a completely different way to how you this with an MLM opportunity.
When an affiliate marketer joins a brand’s own affiliate program, they’re given a unique affiliate link that they use to refer potential customers to the brand’s website.
Every time their referrals take the desired action — such as buying a product or service or registering as a lead — the affiliate who referred them earns a commission.
It’s a business model that is truly beneficial to both parties:
- Companies or Individuals create a product or service and save money on their marketing costs
- Affiliate Marketers promote these products or services and earn a commission for any sales
Unlike MLM businesses, affiliate marketing is a mutually beneficial relationship. There is also no focus on recruitment. It’s all about providing a solution to a problem or a product that would benefit the reader, and both the company and the affiliate benefit.
It’s also free to become an affiliate marketer. You can join an individual affiliate program with a company (like Amazon or eBay), or you can even join affiliate networks like:
These examples don’t even scratch the surface and it will ultimately depend on which niche you are targeting (here’s a list if you want to get some ideas). If you want help finding a niche, click here.
But there are thousands of affiliate programs for millions of items and they are free to join (here’s how to find affiliate products to promote). Typically the only thing you will need for some of them is a website. You’ll also need to learn how to attract an audience.
But the methods are easy to learn (with the right help) and you can get started at your own pace. Whereas with an MLM, you will need to hit the ground running as you will have a sales quota to chase.
Affiliate Marketing Pros & Cons
Here are the most common pros and cons of an Affiliate Marketing business opportunity…
Affiliate Marketing Pros
- Free to get started
- You can promote (pretty much) anything you want and genuinely help people
- It’s possible to build a brand
- You can use the internet to sell for you 24/7
- No need to recruit anyone
- No limit on earning potential
- You can learn plenty of transferable skills, useful for any business
Affiliate Marketing Cons
- It does take time and effort to learn how to do it well
- Due to the number of options, it can make it difficult to choose a “niche“
- To be successful, you’ll need self-motivation
- No control over the products or prices
Affiliate Marketing Conclusion
Affiliate Marketing is the ultimate way of earning a living from something you love. Take a hobby or passion and build a business based on it and earn money. So, what’s the problem?
Well it is true that affiliate marketing is an awesome option. It’s easy to do and there is little investment needed to get started. So, why isn’t everyone doing it.
The problem isn’t with the business model. It’s with the people who are doing it.
The biggest hurdle many people have is the timescales. This isn’t a get-rich-quick scheme. There are no get-rich-quick schemes unless you win the lottery.
But people do seem to believe that you will earn money really quickly, when it’s much harder than that.
You need to build up trust with the search engines, so people will find your website.
You need to build up a relationship with your readers, before they consider following your suggestions (i.e. your affiliate links).
It all takes time and effort. You will not be giving up your day job anytime soon. But the advantage of affiliate marketing is that you can do it alongside your job and make it work for you.
That’s how I got started, working in the evenings around my day job. You need to have the right mindset and build it for your future.
If you’re going to keep the employee mindset and expect to get paid every time you work on your affiliate business, then you are going to struggle to succeed.
It’s amazing when you do start earning money from something you love, but don’t expect it to happen in a week or so.
Invest in a year and you will see some fantastic results. You may be able to speed up the process, depending on how much time you invest into it.
But you need to be investing time in the right methods. That is why we recommend Wealthy Affiliate as our top recommended training platform.
If you’re going to spend hours, days, or weeks on your business – Spend it doing the right things…
5 Advantages of Affiliate Marketing Vs MLM
Ok, now we’ve looked at the main differences between Affiliate Marketing and MLM.
But just in case you’ve somehow read the last section and still believe “MLM programs sound great”. We’re going to give you five clear advantages of Affiliate Marketing Vs MLM…
#1 Affiliate Marketing Offers You Complete Control Over What You Promote
When you enrol into an MLM program, you get no freedom over what you promote. You only get to sell what that MLM has to offer. You’ll also notice there are usually clauses in your contract that state you cannot sell products from other MLM companies (not that you could afford to join them all).
All you get to do is sell their products and then recruit others into the fold. This gives you no freedom and neither does it do the same for your customers.
But with affiliate marketing, you can promote exactly what you think would benefit your customers.
If you have a health blog and want to promote several different brands, then you can. Write a blog post about the pros and cons of each, and let your reader decide which one to buy.
You get to choose the affiliate programs you sign up for and the products or services you promote through your own website or other channels, so you can sell based on your skills and interests. And you won’t have to spend any time recruiting new affiliate marketers.
#2 With Affiliate Marketing, You Don't Have to "Close The Deal"
If you follow the right strategy with affiliate marketing, you will not be sold to anyone. It’s not about sales, it’s all about providing help and solutions. You become an authority in your niche, provide insightful help and advice, and then your readers will (more than likely) follow your advice and end up on the merchant’s sales page.
Think of Amazon. Their merchant pages are designed and set up to sell. If you’re pointing your readers to Amazon, it’s their job to push the sale over the line.
With MLM, you are going to need to convince them to buy your products and why they are so expensive.
#3 Affiliate Marketing Puts You In Charge of Product Promotions
MLMs are really specific about how they want you to sell their products and recruit new team members. All that network recruitment requires personal interaction and direct communications. There will also be the occassional awkward conversation too.
Several of them are stuck in the 80’s and 90’s and expecting you to still host house parties to sell makeup and skin care products.
Not everyone is up for hosting parties or even having that conversation with a team member who isn’t meeting their quota. If you’re a little introverted, this is definitely not a great option for you.
With affiliate marketing, not only do you get to choose the types of products and services you promote, but you also get to control how you promote them. And, thanks to the wonders of the internet, you get to do it all from the comfort of your own home.
You have the option of starting a website and writing blog posts and product reviews to share your affiliate links. But there are other opportunities too. More and more people are using YouTube for affiliate marketing.
Then there is Facebook, Instagram, Pinterest, and email marketing too.
#4 The Majority of Affiliate Programs Are Free
Regardless of what is said, MLMs are not free to join. They usually have a signup fee and the product kits you need to buy. Then there is the monthly sales quota you need to consider. All things that can really hike up your monthly bills.
Most affiliate programs are free to join. Brands want you to be a part of their marketing team, as it means they save millions on advertising. They only pay out when you make a sale, and they want to make it as easy as possible to sell their products too.
Now, the affiliate programs are free. But if you want to be serious about it, you will need to consider spending some money. For example on a website and some training. But it still works out a lot cheaper than MLM (by a mile).
#5 you Can Start earning Immediately with Affiliate Marketing
As soon as you’re accepted into an affiliate program, you can start promoting it straightaway.
There is usually a minimum payment threshold to reach to be able to withdraw your money. But still, there aren’t the restrictions of having to wait for your starter kit to arrive from an MLM and then putting it in front of a customer.
Affiliate Marketing Vs MLM: Head to Head
Let’s know put them head to head… Affiliate Marketing Vs MLM! Time to do some comparisons between them to see which one comes out on top…
#1 Start-Up Costs
Both business models will claim to have a very low start-up cost associated with them. Technically you can get started with affiliate marketing for free and most MLMs claim to keep their initial startup as low as $100.
But it doesn’t end up being that way for both…
MLM may let you start for a low fee. But you will require products and marketing materials if you want to make the most of it. These starter kits will include these things so that you can start showing your friends and family the products in the hope they buy some from you.
But these product packs range anywhere from $50 to $1,000. You would think that if you went big for your initial order, you would be able to have some time to build up your customer base.
But the monthly sales quota makes this hard. These monthly sales quotas can range anywhere from $50 to $200 per month. Means you end up buying more and more stuff.
Affiliate Marketing can be an option you do for free. I mean you can get a free website today here. It’s also possible to learn effective strategies and methods through reading blog posts and YouTube.
Although, you cannot guarantee you’re reading the latest and best advice by doing that. Google releases updates regularly, which if you aren’t kept up to date, could hamper your efforts.
My advice is to get the best training you can, for as reasonable a price as you can get.
Wealthy Affiliate is our top recommended training platform for affiliate marketing. They offer a free membership option for you to take it for a test drive. Then their premium membership is only $49/month.
You’ll get everything you need to get started and more. Try it now for FREE!
Startup Costs Winner – Affiliate Marketing
#2 Product Options
Most MLMs operate in the health and wellness sector. This reduces the product options immensely. You are also only able to promote the products sold by that MLM. So, if you were to sign up to AVON, for example, you would only be able to sell those.
Many MLMs state you are not allowed to work for another MLM too. So, this means you only have a small selection to offer.
Add to this the price of these products too. When you compare the price of any MLM product against those you can buy from Amazon or Walmart, you are going to really struggle to convince people as to why they should spend that much more on them…
Affiliate Marketing gives you the freedom to choice anything to promote. All niches are catered for, unless it is super-niche.
But if you’re passionate about the outdoors, travelling, technology, skin care, etc. there is an opportunity for you with an affiliate program.
If you’re recommending certain products or offering information that helps people solve a problem, then you can get paid over and over again.
But you are also in complete control of what you choose to promote. You aren’t governed by one MLM company.
Product Options Winner – Another win for Affiliate Marketing
Have you ever tried selling something or recruiting someone? There is a reason why most of us would not do well in sales/recruitment. I know I would struggle, but it depends on you.
Most MLMs tend to hide the real way that their members make money with this business opportunity. The way to make money is by “building a team”.
This sounds like a good thing to many people as most people don’t want to do this business all by themselves.
But the reality is that you’ll need to recruit people into the MLM company.
The MLM companies tend to offer you help in doing this, but that often means that they get you to write down a list of 100 people that you know. Including friends, family, work colleagues, and old school friends on Facebook.
They’ll also teach you how to put your life onto social media to try and attract casual friends into the opportunity.
There are also a large majority of MLMs that still encourage “home parties” where you invite your friends and family over to show them how good your products are, and try to make a sale or recruit them.
It ends up being awkward if I’m honest about it.
Does any of that sound right to you? I know what would happen if I reached out to some of my old school friends…
Affiliate Marketing is all done online. This takes a lot of pressure off. You focus on creating an online authority in your niche and focusing on helping. This leaves your websites and sales funnels to do the work for you instead.
But this is done at your own pace, and without a hefty monthly sales, quota to achieve. You can build your website over time, as a part-time venture.
When I first got started, I didn’t think I was a good writer and it isn’t something I felt I could do consistently. But it’s a skill you learn, and I dictate when I work.
Selling Style Winner – Affiliate Marketing storms it again…
This is one that MLM does get right! They really focus on personal development and offer plenty of training and even live events for their members to ensure this is on the radar.
Affiliate Marketing – as you are usually just you on your website, it depends on the training platform you are with. You need to own your personal development and ensure it stays on the radar.
But MLM’s will ensure it stays on your radar if you sign up for one.
There are communities and live events within affiliate marketing. But most affiliate marketers could avoid personal development or connect with others quite easily if they wanted to.
Personal Development Winner – MLM nicks one back
You’ll learn skills with both business models. But I do believe the skills you learn with affiliate marketing are transferable to any other business model. MLM will teach you all about sales and recruitment. But they do tend to lack a lot of information about online marketing.
The network marketers who have gone and learned internet marketing themselves, have made a huge success from MLM. But if it was left up to the MLM, you would still be doing home parties and selling to your friends.
Affiliate marketing and the training, I’ve received, have helped with my wife’s offline business too.
Learning how to market products or services online is useful for anyone.
Getting your website to rank in Google, using SEO, copywriting, email marketing, and social media marketing are all skills that you can learn and improve on, whilst building an affiliate marketing business.
Every business needs this level of skill, even the local business on the high street. You can either use these skills to build your own affiliate marketing business, or you can actually market those skills as a freelancer.
Skills Learned – For me Affiliate Marketing leads to a much broader skillset
There is an opportunity to earn money with MLM. But you will need to climb the pyramid and build a huge team if you want to reach the levels an affiliate marketer can. But when 92% of MLM members are losing money, you can see why people question the income potential of an MLM business.
The income potential for an affiliate marketer is endless. But there is still the fact that many affiliate marketers fail. Not because of the business model, but because they don’t put the time and effort to achieve it.
But to put it into context, there are real examples of people who are earning 4-figure incomes from affiliate marketing…
It’s not going to happen overnight. But this example shows what can be achieved if you put your mind to it. LittleMama (a fellow member at WA) has earned over $100K in 4 years.
Another example is where Steve has earned $8K in a single month.
These are both examples of people who are financially free due to the work they have put into building a website and using affiliate marketing.
But there are other examples of where people are earning millions of dollars a year.
It’s possible to create a growing passive income as once you put the work in once your website can get found every single month by more and more people.
The only ceiling with affiliate marketing is the amount of time and effort you put in.
But with MLM, you will always be “like an employee” in a sense, as you are stuck in their cycle.
If they decide to stop selling your best seller, there is little you can do about it. If they close the business down you are stuck.
But if that happens with affiliate marketing, you find an alternative product for your readers quite easily.
For me, Affiliate Marketing wins here too…
Final Scores - Affiliate Marketing 5 Vs MLM 1
Downsides to Either Business Model...
Whether you now agree that affiliate marketing is the better option, or that you are destined to ace the MLM route. There is one thing that can hamper your efforts with either of them.
So many people are wanting to find a way of becoming financially free and leave their day job. I know, I was one of them. But the key difference between those that do achieve it and those that don’t all comes down to how much they want it.
You will not start this business up and then have people buying your products straightway. You will need to build up trust with people. You will need to do things that make people trust you.
You will need Google to find your website or you will need to find local groups to promote your MLM products in.
This all takes time. But people don’t give themselves long enough before they quit and say it didn’t work.
I didn’t see my first affiliate sale for 6 months. But I see so many affiliate marketers work hard for 3 months, so they have nothing to show for it and then quit.
But you check out their site and their content is great, but it’s still early days.
My biggest piece of advice with affiliate marketing is to give yourself a year and follow the right strategy. And never give up!
If you pick the wrong niche, you are not going to want to work on it for a year. If you are trying to sell, it will often lead to nothing.
Focus on helping people and the sales will come later.
I don’t have experience with MLM, but I would believe it is very similar. You need to work hard and learn the best strategies and follow them to the letter.
Affiliate Marketing Vs MLM: And The Winner Is...
I’ll admit, that I am a little biased towards affiliate marketing. But with good reason. I know people who have found success with affiliate marketing. I am also earning money from it too.
But you cannot hide from the fact that over 92% of MLM members are losing money, which is a hard fact to swallow.
For me, there are some clear advantages affiliate marketing has over MLM…
- You are in full control of the business
- You’re not restricted in what products you can promote, or the niche you choose
- You won’t get stuck with a duplicated website
- The skills you learn can provide you with a huge business, financial freedom and ways of not having to work a normal job again
- There is no need to recruit anyone or sell to your friends and family
It’s up to you to decide which business model is best for you. There are, of course, other options available online too. But affiliate marketing is the most beginner-friendly and doesn’t require a huge budget to get started…
But whichever business model you decide on, please promise me to take action and work hard to achieve your goals!
They are achievable but you need to work hard to make them a reality.
Thanks for checking out my Affiliate Marketing Vs. MLM blog post. If you like the sound of having your own affiliate marketing website or business but aren’t sure where you can get help – we will walk you through all the steps needed in our Passion to Profits Bootcamp.
If you have any questions or comments to add, then please write them in the comments below. ;)
Affiilate Marketing VS MLM: FAQ
Affiliate Marketing is much easier to start and manage than drop shipping. Drop shipping requires you to constantly monitor orders and your site, and deal with both suppliers and customers. This makes it an active way of making money on the internet.
If an order fails, you will need to deal with the refunds and complaints from customers. Also, if a product stops being made and you’re not quick enough to update your website, you’re stuck dealing with the issue.
Compare that to affiliate marketing, where you aren’t the one selling the products, you’re just recommending them. Meaning the merchant deals with all that hassle. It becomes a passive income.
No, Affiliate Marketing isn’t a pyramid scheme.
Unlike pyramid schemes, the majority of affiliate programs are free to join and the merchants want to work with you. They want to make it easy for you to promote their products and services to your readers. In return, they will reward you with commissions.
Pyramid schemes are all about recruitment and affiliate marketing is around introducing them to a product or service. A clear distinction.
But as MLM has recruitment elements, that is where the confusion lies there.
We feel affiliate marketing is clearly better than Multi-Level marketing schemes. Mainly as most MLM members are losing money (92.3%). The only people really making decent money are those at the top of the pile, usually at the expense of those at the bottom.
With affiliate marketing, it is a mutual relationship where everyone benefits. Merchants get to expose their products to a wider audience, and the affiliate marketer gets to earn a commission without having to worry about logistics or customer services/support.
I have never engaged in an MLM business because I know I am not good at presentation, recruitment, and sales skills. And those MLM cons you mentioned in this article are why MLM distributors cannot make money with the commission structure and the compensation plans.
So, I prefer affiliate marketing. If you find an excellent platform like Wealthy Affiliate, it’s possible to make consistent online income. The key is to take action online today! 🙂
thanks for checking out this blog post! Unless you are great at sales, MLM is a tough business model. I’m not particularly a fan of it, and the statistics show just how difficult it is…
Affiliate Marketing is much more geared up for the beginner or someone looking for a part-time job online as they can do it at their own pace. There is no rush to get it going, meaning you can spend more time on getting it right. But you do still need the patience to see it through… A platform like Wealthy Affiliate has all of the tools and support you need to get going and stay motivated. That’s why it’s our #1 recommended program.
All the best,
This is a great article. I have tried both MLM and Affiliate Marketing and I agree with you that Affiliate Marketing wins. The amount of times I found out that MLM was a scam with the company I was working with, I can’t even remember.
Affiliate Marketing is on my terms and I can promote my affiliate products how, where and when I want to.
Keep up the great work my friend and keep posting such excellent articles.
All the best,
thanks for checking out my blog post! I agree! Affiliate marketing is a much better business model. It stays in touch with how people are shopping these days. MLM could do a much better job, but they need to start getting with the way people are shopping these days. They could also do something with their prices too.
They aren’t all scams, but that still doesn’t make them much better to sign up with.
Thank you for a very detailed comparison between the MLM marketing business model and the affiliate marketing business model. I agree with you that the best online marketing business model is the best business model that suits your selling style, but at the same time I agree with your bias towards affiliate marketing due to its flexibility.
The only time I think the MLM business model may come out on top is if it is a MLM business model that provides tremendous value and that offers good products/services with a very good business plan and commission structure.
totally agree, it’s always down to the products. A good product line with competitive prices that offer a solution to people and an MLM model can work. Both business models require a lot of time and effort and you need to pick the one that suits you…
All the best,