Affiliate marketing vs MLM (or “multi level marketing”, to give its full name) is a choice considered by plenty of people looking to make money online.
To make the right choice, you first need to understand the key differences between the two, which is exactly why we’re writing this article!
Affiliate Marketing vs MLM: What’s the Difference?
A lot of people mistake affiliate marketing and multi level marketing, assuming the two terms are basically synonymous.
In reality, the only similarity is that they both (claim to) offer a way for people to earn enough residual income that they can quit their “real” job and spend more time doing the stuff they love.
However, the ways they do it are very different. In this section, we’ll explain the difference between affiliate marketing and MLM.
However, before we get into the weeds, it’s worth pointing out that MLM has a lot of alternative names.
You might see it referred to as “network marketing”, while the term “pyramid schemes” is also sometimes used to describe MLM programs (although that’s not entirely accurate or fair).
What is Multi Level Marketing?
While MLM and network marketing sound like sleek, sophisticated ways to earn money, pretty much everyone knows pyramid schemes are bad.
In practice, the business model only benefits those at the very top of the tree, while everyone else does all the work. Actually, that just sounds like capitalism.
Now, as you might be aware, pyramid schemes are illegal. If you get involved in one, you’re almost certain to lose your money, and you might also end up getting prosecuted. Which doesn’t sound like much fun.
There’s an important difference: multi level marketing is legal. But that doesn’t mean you should rush to sign up for one.
Just like pyramid schemes, MLM businesses typically only benefit the bigwigs at the top — although, of course, many MLM participants believe they’re the ones who are smart enough to change all that!
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.
What is Affiliate Marketing?
On the other hand, affiliate marketing is 100% legitimate. 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.
We should know because we’ve done it ourselves!
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 a desired action — such as buying a product or service, or registering as a lead — the affiliate who referred them earns a commission.
Unlike with MLM businesses, affiliate marketing is a mutually beneficial relationship between brands and individual affiliates. The brand reaches new audiences and generates more revenue; the affiliate marketer picks up a healthy commission along the way. Everyone wins!
5 Advantages of Affiliate Marketing vs MLM
We’ve looked at the key differences between affiliate marketing and multi level marketing.
But just in case you’ve (somehow) read the last section and still think “MLM programs sound great”, now we’re going to spell out five clear advantages of affiliate marketing vs MLM:
1 Affiliate Marketing Offers Complete Control Over the Products You Promote
If you enrol in an MLM program, you’ve got no freedom — you simply have to promote a specified product (or products), while doing a bunch of network recruitment to attract other members to the scheme.
You might have no particular interest in, or knowledge of, those products. And selling something you don’t believe in is extremely difficult.
On the other hand, with an affiliate program, you have complete control.
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” Yourself
When affiliate marketing is done “properly”, it’s not a sales job at all. Instead, it’s about offering genuine expertise on a given niche, carrying out high-quality product reviews, and leaving all the sales stuff to the brand.
For instance, say you love the great outdoors. Who doesn’t? So you start a website where you write about your favorite walks and review your favorite gear:
Affiliate marketing lets you turn your hobby into your own business because you’re making money every time someone buys the products you recommend.
3 Affiliate Marketing Puts You in Charge of Product Promotion
MLM programs are very prescriptive. All that network recruitment requires a whole lot more personal interaction and direct communications, not to mention the occasional awkward conversation. It’s definitely not for everyone.
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.
Sure, a lot of affiliates choose to start a website and write blogs incorporating referral links. But if that’s not for you, no bother, no fuss. Lots of affiliates are making money with product reviews on YouTube, for instance:
4 Most Affiliate Programs Are Totally Free to Join
As I’ve already alluded to, it costs a lot of money to get into the MLM business. The parent company typically charges a substantial fee for a “startup kit” that includes all the products you’re meant to sell, and it’s extremely difficult to ever offset that cost.
They often have ongoing membership fees, too, and you might have to generate a certain volume of sales before you start seeing any sort of return.
Most affiliate programs, on the other hand, are completely free to join. After all, brands want you to be a part of their affiliate marketing program, so why would they charge you for the privilege?
5 You Can Start Earning Immediately With Affiliate Marketing
With all those “setup fees”, MLM programs are a slow burn at best. Don’t expect to start turning a profit any time soon, if ever.
Affiliate marketing couldn’t be more different. Once you’ve been accepted to an affiliate program, you can start promoting that brand’s products and earning commission straightaway.
Sure, the majority of affiliate programs have some sort of minimum payment threshold to hit before you can withdraw your hard-earned money, but these are rarely more than $50 – $100. And even if you don’t reach that threshold within a month, it’ll roll over to the following month.
Conclusion: Affiliate Marketing vs MLM: Which is Best?
Affiliate marketing is a viable means of making money online. Multi-level marketing isn’t, because it rarely benefits anyone other than those at the very top of the pyramid.
That’s basically the whole conclusion.
Admittedly, as long-time affiliate marketers who help people hoping to earn money through affiliate marketing, you could call us biased. But the results we’ve seen demonstrate just how effective affiliate marketing can be:
Like the sound of it, but not sure how to start your own affiliate website or business? No worries — we’ll tell you about all that stuff in our free training.
Is affiliate marketing better than MLM?
Affiliate marketing is better than multi-level marketing schemes because MLM participants rarely make any money; the schemes only benefit those at the very top.
With affiliate marketing, everyone benefits. Merchants get to expand their audience and drive more sales, while affiliate marketers get to earn a commission without having to worry about things like logistics and customer support.
Is affiliate marketing a pyramid scheme?
Affiliate marketing is not a pyramid scheme.
Unlike in a pyramid scheme, the vast majority of affiliate programs are totally free to join. The merchant isn’t trying to pocket your money.
Instead, they want to profit from the referrals you send them. And they’ll reward you with commissions when you drive sales of their products or services.
Which is easier, dropshipping or affiliate marketing?
Affiliate marketing is easier to start and manage than dropshipping.
With dropshipping, you need to constantly monitor your site and deal with suppliers, which means it’s an active way of making money on the internet.
In contrast, with affiliate marketing, you don’t actually sell anything yourself — you just recommend a product or service to your audience. It’s totally passive income.