If you want to start working online, establishing a passive income is one of the best ways to get started. However, there are so many options and so many offers… It’s important to know what you’re getting into! This time, let’s talk about affiliate marketing vs MLM & what’s the difference.
If you hop on any Facebook group and type in a question “I want to start working from home… what are your suggestions??” just sit down and wait while TONS of MLM offers will float all over you.
MLM is a tricky business. It feeds on uneducated people who don’t know better.
And don’t get me wrong. It’s not ALWAYS the case. But it is mostly. Like… 99% of the cases.
Some who’ve spent their money and effort on getting into MLM and seen nothing close to a real outcome, the dream of working online seems dead… All the other offers look shady… It’s like bursting someone’s bubble really.
So let’s learn more about affiliate marketing vs MLM and what’s the difference!
Affiliate marketing vs MLM
What is an MLM business?
MLM is a scheme, quite literally.
Multi-Level Marketing. There’s one head chef who wants to sell his product. So he hires 2 more associates to share the product by giving them some percentage of the purchase.
Then, those 2 associates can hire more people each. For each person attracted, they get an additional commission.
People on the third level, once again, get paid for whatever they sell. But since they’re not direct associates, the level of payment is lower.
Basically, if the first person gets $100, the second will get $20 and the third $5. Sounds almost good but it isn’t.
On some level, new people just lose money by purchasing the products themselves and never selling anything. Here’s a scheme that shows this nicely:
In fact, in many countries MLM is illegal.
I’m not going to make a pros & cons list in this article because there are no pros I could state for getting into MLM.
However, there are quite many cons:
- Usually, you need to invest. Most MLM businesses work on the principle that you purchase the first package of what you want to sell. Then you do whatever you have to do to make sales. If sales don’t come, you’re just left with the product you bought.
- Basically anything you sell as an associate can be purchased elsewhere for a lot lower price so you can only imagine how hard it really is to sell.
Another popular thing you’ll notice – those who work for MLM will use popular phrases like
“I know other MLM are not legit but we’re not like that!”
“You don’t need to invest, this is different”
“I saw real income within a week! Now, I’ve tripled that within a month!”
“Our product is really unique and it HELPS! You can’t get in anywhere else!”
All of which is said for obvious reasons – to lure you in.
What is affiliate marketing?
Because of the bad reputation that MLM gets, many people get scared of any kind of online marketing business idea… However, affiliate marketing, on the other hand, is a lot simpler and REALLY WORKS.
(See the irony? I sound like one of those MLM people…)
Affiliate marketing means that you become an affiliate for a product or service you want to share with others and then receive a commission for each sale made.
What makes it different from MLM is that you’re directly related to the seller and usually it’s a big or well-known product that people already know and trust (although you can become an affiliate for almost anything).
Almost any online-based product or platform has an affiliate program. Email marketing services, online course platforms, website platforms, design templates and themes, digital books and courses, subscription services…
However, it can also be a physical product you’re selling. Clothing, books, tech, cookware. Whatever rocks your boat, really.
One of the most popular affiliate programs is Amazon. People trust and buy from Amazon, therefore, it’s easy to promote products on your website and get sales. However, their affiliate commission is quite lower than others so I suggest picking carefully!
I’ve gathered some more tips for being a successful affiliate in Make Money Blogging.
In the next section, I’ve gathered the benefits of affiliate marketing.
The benefits of affiliate marketing vs MLM:
- You are the DIRECT seller. There’s no scheme over scheme over scheme. You’re dealing with the company directly.
- You can be an affiliate for plenty of products, you’re not tied to one company.
- Usually, affiliate commissions are quite high. It can be anything really but most affiliate programs have 5% to 30% affiliate commission.
- Affiliate income can be recurring. If the product you’re selling is a monthly subscription, you might get repeated income as long as the product is used.
- There’s no need to invest or purchase the product first. All you have to do is to sign up for the affiliate program you want to join.
Want to learn more? Check out this Full Guide to Affiliate Marketing for Bloggers.