(This post contains affiliate links, which means that if you click on a link to the Merchant’s site and purchase something I may earn a commission.The price you pay will be the same if you went to the Merchant’s site directly.)
Affiliate Marketing or MLM, otherwise known as Multi Level Marketing or Network Marketing, which is right for you?
Whenever MLM is discussed, it is often related to pyramid schemes, or Ponzi schemes. So let’s get rid of the Elephant In The Room. OK?
There are companies that are structured as Ponzi Schemes but are promoted falsely as legitimate MLM companies. The purpose of this Blog is not to discuss the merits of MLM, or how to chose a legitimate MLM company. I want to make sure you are aware that there are countless genuine MLM companies around that are doing very well. Are their associates doing well too? We will get into this later.
For the purposes of this Blog I will only be talking about MLM companies that are legitimate.
Affiliate Marketing and Muti Level Marketing (MLM) are both promoted as Home Based Businesses. Before we can answer the question, Affiliate Marketing of MLM – Which is right for you? We need to define what each of these are. Let’s proceed.
Multi Level Marketing (MLM) or
In this business model you can earn money often in three ways:
- You earn a commission on the sales of products you personally make
- You recruit a network of sales people and you earn a smaller percentage of the commissions from their sales
- You are paid a bonus that is scaled to the overall sales of the network you build.
The cost of entry varies between companies. Usually there is a sign up fee. There are costs involved to register and sometimes for the training. Today you are also provided with an online personal website. A fair start up one time cost should be no more than $200. If you are required to pay hundreds of dollars, a red light should go up as this money could be factored into the compensation plan. And this borders on being illegal.
Most companies mandate you purchase a minimum of product monthly in order to qualify for commissions. This can range from $50 to a few hundred.
There are various structural designs for the network, the most common being binary, where you recruit two and they recruit two and so on and so forth. Or you can recruit as many members under you and your recruits can do the same.
The reason for the term Multi Level is you can earn a percentage of the commissions not only from your recruits but also from their recruits for several levels deep on a declining scale.
In principle, the sales model is based on each individual making just a few personal sales, but you benefit from the sales of others, thus giving you leverage. The question arises how can the company do this and not lose money or price the product out of the market? The answer is, they do not have to pay for ads as the members promote the product through word of mouth. Plus, they build their network the same way. Ones actual income is dependent on the personal sales volume as well as that of the members network. Clearly it is necessary to do everything possible to boost sales.
As long as new members are recruited as associates, the model can operate very successfully. There is ample proof it works because companies like Amway, Herbalife, Avon and LegalShield are thriving. When you become a MLM distributor, your focus is only on the company you represent. Unless the Terms and Conditions of a company ban it, you can be a distributor of more than one company. Even if this is possible, it is a bad idea as you will end up not doing well in any of them.
Let’s define what Affiliate Marketing is.
Thousands of companies have Affiliate Programs to help increase sales. Anyone can apply to become an Affiliate and market the products of a company independently, usually through their own Affiliate website.
It should cost nothing to become an affiliate for a company. If there are charges, a red flag should go up and you need to check out that company thoroughly to find out why that charge is imposed. Amazon for example charges nothing.
Since you must create a website to promote the products there are skills you must have to succeed. Like the ability to find a domain, create your website and have it hosted. How to structure your website and posts for being ranked high in the search engines to give a chance to drive traffic to your posts. Hence you must have the skills to write effective bog posts.
You can learn all these skills by trial and error or use free stuff online. This will cost you precious time.
Or you can register with one of many Affiliate Marketing Training Programs to learn these skills. There are costs involved. They can range from about $1 a day, to thousands of dollars a year. At the end I shall show you where to go to learn these skills for about a $1 a day. But on average these should be less than MLM.
When a visitor to the website you create decides to make a purchase and clicks an Affiliate link located on the website to the company’s online store and makes a purchase, the affiliate earns a commission.
The affiliate uses their Blog post to educate individuals looking for the product in their niche to make a buying decision. An Affiliate Marketing website is NOT an online store front, but rather a Blogging site where the Affiliate regularly publishes articles that promote the product through reviews, comparisons and discussions about the product.
An affiliate chooses a niche that focuses on a narrow range of products that fall within that niche. The target market is anyone who has needs, wants or a problem that can be satisfied with products from this niche. Hence, an affiliate is not tied down to one company. They can become affiliates of many companies who offer products within their chosen niche.
An affiliate gets paid a commission when visitors to their website clicks a link affiliated with an online store and makes a purchase there. Income is dependent on the number of sales as well as the commissions paid on these sales. This can vary from 1% to 50% or more.
Unlike MLM, you are in complete control of your website and the sales it generates based on traffic and conversions. To boost sales it is critical to not only drive traffic to your website but also to make sure those who visit are ready to make a purchase. This is where ones Blog Post is important. The objective of your post should be to unearth a pressing need, wants or problem your visitor has and to show how you offer them the best solution available for the money.
Qualities of A Multi Level Marketer
An associate is someone who signs on to become an independent representative of a MLM company. If concentrated effort is made at the beginning, sales can occur quickly earning them commissions. The main qualities they need to become successful are:
- Got to be outgoing and willing to talk to anyone to promote the product for personal sales
- Has a desire and drive to recruit other sales persons to place in their personal network
- Must be a good team player and likes attending meetings they take their prospects to learn from experts
- Has to be resistant to hearing no’s a lot of times and never giving up
- Must be a good leader, mentor and teacher for their recruits
Do you fit these requirements? In MLM the rewards go to those who are able to build a large network of customers and sales persons over time. Usually their main method of building their business is through the personal touch. Only a few are able to do this well. These individuals earn amazing commissions. Any online presence is used to support this approach. The sad truth is the vast majority of associates barely earn anything because they can’t handle rejection. So they give up. Many end up using the products only and become sustaining customers.
Qualities of An Affiliate Marketer
An affiliate marketer is someone who becomes an expert in a particular niche often through online research. They love to work and https://my.wealthyaffiliate.com/content/edit/471769#build their online business alone and are willing to devote many hours to learn how to harness the internet. It takes time to build traffic to their website before sales can be generated. Instead of having to accept rejection, more patience is necessary. Here are the main qualities of an Affiliate Marketer
- Willing to work alone to build their business online
- Has an aptitude to learn how to build websites
- Possesses the patience and desire to learn the skills to grow traffic to their website
- Develops a love for writing articles for their blog posts regularly
- Uses online tools to monitor and tweak their website for optimum resuts
Does this describe something you would like to do? The best approach is to learn how to develop sales organically and then use paid ads to scale up your business. As an Affiliate Marketer you can represent multiple companies who have products that match your niche.
Can You Do Both?
Yes you can. However, your time is limited therefore it is best to become good at one before diving into the other. It is your choice which one you decide to do first.
There are many examples of individuals who are great in both areas. The qualities that are common to both are:
- Willingness to be persistent and never give up
- Does not get discouraged by disappointments
- Capable of accepting change when systems change
- These endeavors are real businesses and must be treated as such
- Willing to train others if necessary
My Personal Recommendations
If you are interested in the MLM business model, I strongly recommend you check out LegalShield.
For the Affiliate Marketing Business, there is no better company to learn how to do it than
You should know that I am an associate of both LegalShield and Wealthy Affiliate. When you join either I shall be glad to be your mentor and guide.
Affiliate Marketing or MLM – Which is right for you?
Only you can answer this question. I hope I have provided you with sufficient information to make a good decision. There is no right or wrong answer. Either method imposes no limit on how much you can earn. This is a direct result of how hard and smart you work utilizing the respective systems as effectively as possible.
Like everything else in life, 20% of those involved make most of the effort, and earn the most. The remaining 80% muddle along many earning nothing at all. No matter what you chose, MLM or Affiliate Marketing, you will have to decide if you want to work hard and smart. The rewards of building an asset that pays you passive income is well worth it.
Would you like to have time freedom combined with the money to pay for the things you enjoy doing? Dreaming big dreams that feel real can fuel the momentum you need in order to succeed. You are not exchanging hours for dollars. Instead you are building money making assets. This requires constant effort and momentum to be successful.
If your personality is outgoing and you love to make friends, the MLM business model may be right for you.
On the other hand if you are introverted, and prefer to work alone being an Affiliate Marketer may be best for you. This may also be the best business model for folks who are retired of have mobility problems. You can do this business completely from your computer or mobile device.
The MLM model enables you to leverage the efforts of others to boost your income. In Affiliate Marketing, you leverage the internet instead.
There is another question I should have asked. Is either Affiliate Marketing or MLM right for you? Maybe it is neither. If that is so, it is better you realize this before you get involved and find out later you made a mistake. Once you jump in, you must do so whole heartedly and go all out to succeed. Otherwise I promise that you will not. Often you are told you can go at your own pace. That is true. Slow pace means slow and even no results.
Now that you know the stakes involved, I’d love to hear what is right for you. Also, please leave me any comments or questions you have in the comments section below.
6 thoughts on “Affiliate Marketing or MLM – Which is right for you?”
Great post Edwin, You have done very clear comparison between Affiliate marketing and MLM.
To me, I believe Affiliate Marketing is always better for longer run. Thankfully, I’ve being in this field since for several years. I wasted my three years in MLM companies and wasted lots of money. But fortunately for me, I understood their concept/strategies and came out of it. Though Affiliate Marketing requires selling skills also. Despite that, you can get started with Affiliate marketing using just a blog but then, it requires you to have talent to convert your visitors into customers.
By the way, your blog is impressive to be honest. It has tons of inspiring articles, Edwin.
I appreciate your thoughtful comments. I first got into Network Marketing in 1996 with a company that promoted phone cards. They made it sound too easy to build a network. I gave up on them. Affiliate Marketing online was not available then.
Then I read Robert Allen’s book Multiple Streams of Income. One of his chapters was devoted to his secretary who got into Network Marketing and soon made more than her salary in his company. She quit and he joined up under her. I discovered the company was called USANA Health Sciences. Now they are a revolutionary company because many of their process were way ahead of their time but have become mainstream now. I joined as a Distributor and loved their products. Got pumped up at their conventions. I did build a network but failed to get my downline to do the same. I even got all my family involved. Eventually I ended up just being a customer.
However, my belief in the MLM system continued. In the early part of this century I joined whaT was then called PrePaid Legal. That was one of the best decisions I ever made. I loved the peace of mind I got for having access to lawyers 24/7 to get advice for a low monthly subscription of less than $1 a day. I added Identity Theft and the total family plan cost $50 a month. That company saved me about three hundred thousand dollars when I had to file for bankruptcy after I lost all my IRA in the Great Recession.
Once again I built a network but couldn’t energize my downline to do the same. In all my MLM experiences I started out earning nice commissions but that fizzled out. However, the USANA products have helped me enormously with my nutrition and health. And LegalShield as PrePaid Legal is now called has got me out of legal trouble several times.
Guess who has become a USANA customer. Jay Neill! On one of his Webinars he mentioned that a friend was a distributor and introduced him to their supplements. The main reason I joined Wealthy Affiliate was to treat LegalShield as an Affiliate Company and promote the Legal Protection Benefits in that way. I created my first website here for that called, https://myonestoplegal.com However when Kyle invited me to take the Super Affiliate Challenge, I accepted and placed my Legal site on pause. I intend to get back to that.
I have come across a few members here who are hugely successful in MLM as well as Affiliate Marketing and promoting WA. However, like you, I feel that Affiliate Marketing is more my style than MLM. However, I will be trying to create a LegalShield customer base and down the line encouraging them to join WA and use this platform to build their MLM business.
OMG I just realized how much I wrote! Thanks for your encouraging words about my Blog.
Affiliate marketing is by far a much more preferable option between the two of them. Though people claim that multilevel marketing too is very good with appropriate mastery and excellence in it but then, the chances of failure is higher. Affiliate marketing requires little capital to set up and the possibilities of making greater passive income is higher. I am an affiliate marketer and also has experience in MLM too. So, I can testify that affiliate marketing is by far the better option. Thanks
Wise words from you Tracy. I have another website where I wrote about the ugly truth about MLM companies. But I also wrote a follow up blog on how to use the Internet to make money in an MLM business online using the principles taught here at Wealthy Affiliate. So I used MLM to promote WA. And why not? Whatever worls!
I wish you much success in your Affiliate Marketing business.
I have done both MLM and Affiliate Marketing. And I can tell you without any hesitation that affiliate marketing was the one for me. I made money with MLM but there were a lot of things that I hated and disagreed with.
For one I was expected by my up line to buy products upfront and sell them. With affiliate marketing all I need to do is recommend a product and if they buy it I get paid.
I also hated constantly trying to recruit people and grow a team. With Affiliate Marketing all I need to do is be responsible for little ole me. Yes, you are right that someone can do both. For me, I’m happy with just the affiliate marketing.
Wendy, I totally agree with your conclusion. I was involved in MLM but none of the companies forced me to buy product and sell them myself. I would have left if I was asked to do that.
One of the companies I was involved with was USANA Health Sciences. I was floored when Jay Neill mentioned in one of his webinars that he became a subscriber to USANA’s products through a friend who is a distributor. After a while I also concluded that MLM was not for me using traditional methods.
However, I have noticed that there are people who have been able to build an MLM business completely through the Internet. Now that is what I would like to do. But AFTER I create a successful Affiliate Marketing business.BTW I am an associate of LegalShield where I have access to Lawyers 24/7 who can fight for me to protect my legal rights. Now that is something that can work very well just as a customer as well as a business.
I will be devoting some effort in that direction after I build a successful Affiliate Marketing business, mainly because I believe in the great service they offer. They have literally saved my bacon so many times I’ve lost count. If I had to pay for lawyers at $200 plus an hour no way would I have contacted them. But at about $50 a month, I call them every time I need legal advice or to write letters to companies who have taken advantage of me. They have even represented me in traffic court for free without me having to be there and got my ticket reduced! Oh and I also get Identity Theft thrown in.
One has to be very careful in MLM that you do not get hooked by a company who wants to use you just to generate sales.
I wish you much success in your Affiliate Marketing Business.