New people search for ways to make money online every day. It won't take long before they hear about affiliate marketing, multi-level marketing (MLM for short), and many other terms.
Is this person you?
Are you trying to figure out if you should go for MLM or affiliate marketing?
I've made good money with both methods, but they are very different in the way they work.
It is essential to understand the key differences to make the best choice. This is why we wrote this article!
Affiliate Marketing Vs. Multi-Level Marketing (MLM)- What’s the difference?
Among the plethora of customer acquisition methods available to entrepreneurs, affiliate marketing and MLM are worthy of a look. While the two are similar, they also share some key differences.
Affiliate marketing is a form of marketing in which a company or individual pays another company or individual to promote their products or services. This arrangement allows both parties to work together toward common business goals. Affiliate marketing is a relatively low-risk endeavor that has no limit on earnings.
Unlike MLM, which focuses on selling a single product or service, affiliate marketing allows an online entrepreneur to promote a wider variety of products. Affiliates are compensated through cash payments, typically per sale or per lead.
To be a successful affiliate, you need to find the right program to partner with. You can choose from hundreds of affiliate networks. These networks offer improved goods and services to sell and incentives to attract affiliates.
The actual value of affiliate marketing is in the flexibility and the opportunity to generate a passive income stream. Affiliates can operate from various locations and even take advantage of social media platforms to drive traffic to their sites.
Conversely, MLM focuses on recruiting others to join a business opportunity. To do so, a company will often charge a one-time startup fee and an ongoing membership fee: This is often the genesis of a pyramid scheme.
What Is Multi-Level Marketing (MLM)?
Thousands of people have claimed to have achieved financial freedom through multi-level marketing. Success stories have been published in Universities, educational institutions, and Direct Selling Training Institutes. However, how much of this is true or just nonsense in hopes of recruiting new salespeople to the respective downlines is still being determined.
Multi-level marketing is a business model that enables individuals to sell the company's products and services to others. It can be used as a part-time job to supplement the income of an existing job, or it can be used to start your own business.
Knowing the basics of multi-level marketing is vital before you sign up with a company.
Three fundamental strategies are used in MLM:
The first strategy involves demonstrating a product and inviting customers to a party.
The second strategy involves finding new recruits.
The third strategy involves teaching others about the product and service.
Unlike traditional direct sales jobs, multi-level marketing allows workers to work whenever they want. They can work a part-time or full-time schedule. There are no fixed salaries or working hours.
When considering multi-level marketing, it's essential to check out the company's up-front costs and refund policy. Also, learn about how much money is paid to new recruits. Many MLMs charge a fee for signing up and then hide the actual costs of participation.
Many multi-level marketing companies use the "party plan" strategy, which involves inviting customers to a party and demonstrating a product. This tactic has been successful for decades. However, it is essential to remember that this strategy can take a psychological toll on distributors.
While MLM started as a way for stay-at-home moms in the suburbs to make a few bucks on the side by selling products to their friends and recruiting new sellers, this report now suggests that a new type of crowd is taking over the scene: Highly educated people in their early 20’s.
It is important to notice that there is a fine line between legal MLM and illegal pyramid schemes. FTC gives you the low-down on what’s legal and what’s not here.
What is Affiliate Marketing?
Affiliate marketing, on the contrary, is 100% legal. Successful affiliate marketers can earn a decent income, potentially replacing their job income, by marketing products via their social channels or affiliate websites.
That's exactly how I do it.
Affiliate marketers who join a company's affiliate program receive a unique tracking link that they can use to refer potential customers.
Affiliates earn a commission every time they refer a customer to their company, such as purchasing a product or service or signing up as a lead.
Unlike MLM business models, affiliate marketing is mutually beneficial between affiliates and brands. The brand can reach new audiences and generate more revenue.
Affiliate marketers also earn a generous commission.
It's a win-win!
The Advantages Of Affiliate Marketing Over MLM
Compared to MLM, Affiliate Marketing offers a lot of benefits. You can earn a steady income with affiliate programs without investing any money. You also have the freedom to choose how you promote the affiliate program.
#1 Affiliate Programs Are Free To Join
Using an affiliate program is a great way to generate more online revenue. It is an effective marketing method that has helped many online entrepreneurs generate a solid income online. The affiliate market is growing rapidly, so there are many different options for affiliate marketers to choose from.
#2 You Can Start Earning Immediately
Whether you are looking to make a little extra money on the side or you are looking to make a few bucks full-time, you can start earning immediately with affiliate marketing. You can sign up for free, and you are paid by the business you promote. Usually, you are paid through PayPal.
The best part of affiliate marketing is that you get to choose the products you promote. This way, you can tailor your advertising to your target niche. A great example is blogging, where you can promote products related to your blog's subject matter. Unlike traditional networking, you have complete control over your content.
One of the best ways to start earning immediately with affiliate marketing is to create a YouTube channel. This is the easiest way to make money without a website. However, consider a blog if you want to make some serious money.
#3 You Don't Have To Close The Sale Yourself
If you consider joining a network marketing company, you must close the deal yourself. You have to hunt down possible recruits or buys and present whatever offer you are trying to sell to them. With affiliate marketing, you just need to forward them to the offer, and the company owning the product will do the closing for you.
It’s up to you to find a product with a good sales funnel and preferably do some preselling on your website before you point the visitor to the company’s website to complete the transaction.
If the product you promote stops converting, you can easily swap it out with a competitor's product. With MLM, you have no such possibility.
#4 No Need To Recruit Members
With affiliate programs, there is no need to recruit new members or sell “new member packages.” Unless you prefer being a salesperson, this is the worst part of MLM.
#5 You Choose How To Promote Affiliate Programs
Whether new to affiliate marketing or looking to improve your current marketing efforts, you will need to understand how to promote affiliate programs.
Blogging requires little investment upfront, and you can learn about affiliate marketing as you grow your blog. You will need to write a blog post about a product, explain why you believe the product will be valuable and include an outbound affiliate link.
Other possibly faster methods include Instagram, TikTok, Facebook, and YouTube. By choosing these methods, you sacrifice control for more immediate gains.
Conclusion - Affiliate Marketing vs. MLM
You can make money from both methods, but few people make money when it comes to MLM.
With MLM, you typically make money by building a downline of sellers and earning a certain percentage of whatever they make.
In addition, you make money by selling products yourself. You also need to pay a membership fee upfront, often to buy a member package and to be allowed to sell products. Also, it is common to pay monthly fees.
With affiliate marketing, you don’t have to pay anything upfront, you don’t need to sell anything, and you don’t have to recruit other members.
With affiliate marketing, you can build your own assets (websites) and market whatever products fit your niche.
All in all, affiliate marketing is the best way to go for most people.