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Affiliate Marketing vs Multi-Level-Marketing: Introduction
Welcome to this affiliate marketing vs Multi-Level-Marketing post. I’m sure you have heard of affiliate marketing, as well as Multi-Level-Marketing (MLM.
You probably have been tempted to start either of these, but you just aren’t quite sure yet which one is the right one for you. So, today we are going to have an in-depth look at both of these business models to see which one is right for you.
Before we start, I would like to say that I’m an affiliate myself, meaning that I may be a little bit biased. However, everything said in this comparison is my honest view.
What Is Affiliate Marketing?
If you read this blog a lot or even a little, you will know what affiliate marketing is.
Affiliate marketing is where affiliates sell other businesses products and earn a commission when a sale is made. It allows businesses to scale easier while offering a business opportunity for affiliates.
Usually, the affiliate earns a commission whenever they make a sale. However, there are also other cases where the affiliate earns a commission for generating leads. This would be a CPA commission, “Cost per acquisition”.
It’s an evergreen business model because affiliates will always want to earn money, while businesses will always want to sell more. So, it’s a win for both parties. As an affiliate, you help the customer make the right decision.
You could be selling products from Amazon, clothes or digital products. Most big companies have affiliate programs. Affiliate marketing is also scalable, just take a look at Trivago. Trivago is a worldwide business that earns commissions for recommending/showcasing hotels.
If you go to Trivago and then make a purchase through their website, they will earn a commission from the hotel. This is affiliate marketing.
What Is Multi-Level-Marketing (MLM)?
Multi-Level-Marketing is also known as:
It’s incredibly similar to a Pyramid scheme. Pyramid schemes are illegal. So, that alone should be a red flag. The truth is, they are really the same thing. Usually speaking, the product is just there to make it an MLM, so that it is therefore legal and not considered an illegal pyramid scheme.
Basically, you are just recruiting people to recruit more people.
That was found by the federal trade commission, so take it seriously!
There are so many horror stories around MLM and often the “recruiters” at the bottom:
Go into debt
Lose their friends & family
Lose money and definitely don’t make any.
Feel free to watch the video below, if you don’t believe me.
Affiliate Marketing vs Multi-Level-Marketing: The Key Differences
So, what are the key differences between affiliate marketing and Multi-Level-Marketing?
As an affiliate, you sell products that people want. If you are an MLM recruiter, you recruit people so that they can recruit more people. The whole marketing strategy is towards people who are trying to make money. Usually speaking, the product that they are “selling” is very low-quality.
As I mentioned earlier, it’s often just there to make it look like an MLM. If a company has such a good product, why do they need to recruit recruiters to create a never-ending cycle?
Why can’t they just have affiliates who sell the products to real customers?
Do you see where I am going with this? Usually speaking, MLM products are trash. Often, the actual product is some sort of marketing course that just shows the recruiters how to recruit more people.
Most recruiters that are at the bottom of the pyramid will have a hard time in this business model. Everyone hates MLM’s, so have fun recruiting people. If you start affiliate marketing, you can sell whatever you want.
Fashion products that your audience will actually want? Tick ✔
Into email marketing and want to sell an autoresponder? That’s also a tick✔
Summary: MLM recruiters recruit recruiters that recruit recruiters that recruit recruiters that recruit recruiters that recruit recruiters that recruit recruiters and so on. In affiliate marketing, we just sell products that customers actually want based on their interests.
See the difference?
Why People Get Affiliate Marketing And Multi-Level-Marketing Mixed Up
So, if one (affiliate marketing) is so good and one (MLM) is so bad, how come people get them confused?
Well, remember when I told you that MLM companies just use products to make their company considered an MLM instead of a pyramid scheme?
Some affiliate marketing companies do something similar. They pretend to be affiliate marketing education companies, but really all they do is educate people on how to refer people to their companies.
These people (members, customers or whatever you want to call them) then refer more people who then refer more people and so on. This isn’t really affiliate marketing. While it’s not directly an MLM either, it definitely has some attributes of it.
For example, the fact that you refer people who refer more people. Again, usually, the product is pretty bad too.
Examples Of Fake Affiliate Marketing Companies
I’ll give you some examples of what I am talking about.
Then it asks you to just refer them to their $2 trial so that they can do the same. It’s really just to cover up their stupid money cyle. You refer people, they refer people and then they make money the same way you do.
Another example is “Wealthy Affiliate”, an affiliate marketing education company. It’s not any affiliate marketing education company, it’s the biggest in the world. Do you know how their members make money?
By referring people to “Wealthy Affiliate”, these people then also refer people to “Wealthy Affiliate”. Although they do have in-depth training, it’s organized poorly and a lot of the information is not true. Additionally, most of the training is from 2016 and some even before that, meaning that it’s heavily outdated.
Big incentives are what drives the affiliates a.k.a recruiters of these companies. These hungry affiliates then heavily promote these products that nobody really wants, often through dishonest negative marketing. This then causes people who don’t actually want to join, join the program.
They then get angry and leave 1-star reviews on trust pilot, as you can see in the trust pilot reviews of wealthy affiliate. (see image below) Of course, these people then spread their negative experience with affiliate marketing which gives it a bad name.
Below are five additional problems with MLM. These are some common problems that apply to a lot of MLM companies. I have heard very few people say the same about affiliate marketing.
And if they have, they are usually talking about the new unexperienced desperate affiliates that spam their affiliate links. Normally, affiliates are the happiest people in the world promoting products that they like and use. This is not the case for MLM.
1. MLM Exploits Weak People
Most people who join MLM-type schemes are in-debt or need money. They are at a vulnerable point in their life looking to improve their life. MLM recruiters will want to recruit you, even if you don’t have the financial income to sustain it. Have you ever heard of anyone joining an MLM at the best time of their life? No.
And if you have, chances are their finances gave them a straight ticket to the top of the pyramid.
All they care about is that you work under them for a little bit of time, they don’t actually care about you. When somebody comes to me and asks about doing affiliate marketing for free, I always tell them to go and start a YouTube channel.
I don’t tell them to go and get a $100-$300 product that I am affiliated with. Affiliates don’t need to do that, they aren’t desperate. MLM recruiters are more than desperate. Most affiliates have large volumes of traffic coming in anyway, so even if they were “bad” people and just wanted to exploit people, they would probably give them honest advice on their niche (assuming it’s one or two quick questions).
I am talking about real affiliates by the way.
2. MLM Changes Personalities
All these horrible recruiters are not actually horrible. They are just super-desperate which causes them to be that way. It’s like an addiction once you recruit a lot of people. The recruiters at the lower part of the pyramid are desperate, so that’s what drives them.
They don’t care who they recruit, how they recruit them or what happens to them in the long term.
3. Bad Products, High Prices
Many different people make a commission off each sale. How is that profitable? Through high prices and low-quality products. MLM companies need to have high prices and low-quality to be profitable.
4. MLM Companies Are Built Off Other People’s Backs
MLM companies are built on other people’s backs. Often, the same people that have had their lives ruined, or at least have experienced some sort of horror stories with that company.
Ethically, it’s not exactly right either.
5. Horror Stories
MLM has tons and tons of horror stories. Affiliate marketing? I have never heard of any.
The main alternative to MLM is of course affiliate marketing.
If you are a beginner, I would just recommend going into affiliate marketing with a non-money related niche, otherwise, you may always have that feeling of recruiting people for money related opportunities. For example, you could use my blueprint for amazon associates with the shoe niche. This would cost you less than $100 to start so it’s fairly cheap.
If you don’t want to spend less than $100, you could also consider YouTube which is completely free. Or, you could also go into paid ads if you have some money to invest.
With that being said, you should only invest what you are willing to lose. Otherwise, you might end up in a lot of trouble as if you were to join an MLM.
As you have seen throughout this comparison, I am a little biased.
But, if you are desperate and you want to make money, I wouldn’t really recommend going into any business, especially not MLM. A business takes time, it’s not an over-night thing. If you are desperate, try to go into something like freelancing first this usually takes a lot shorter time to succeed.
If you go into MLM while being desperate, there is a 99% chance that you will do more harm than good.
If you have time, but no money and you can afford to wait a period of time before it makes you money, then you can also consider the YouTube method.