MLM vs affiliate marketing, which is the best or better business to make money with? Both are easy to start, but only one gives you full control over your business if you take advantage of the benefits and plan ahead. So if your new to making money online and trying to decide which way to go I will give you my opinion on which is the better option.
Please take note that I will be using MLM interchangeably with multi-level marketing throughout my post. They are both the same thing.
I will also go over the different business models explaining what affiliate marketing is as well as what is multi-level marketing (MLM) and the do a comparison at the end.
- What Is A MLM Business
- How To Make Money With Multi-Level Marketing
- What Is A Affiliate Marketing Business
- Differences Between MLM and Affiliate Marketing
- Is Affiliate Marketing Better Than MLM
- Dark Secrets of MLM
- Is MLM A Pyramid Scheme
- Final Thoughts
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What Is A MLM Business
The words multi-level marketing do a good job of describing exactly what this business model is about. There will be different levels of salesman typically called consultants.
This is the big difference from how the affiliate marketing business model works. Which I will discuss later in the post.
Below is a good illustration of what I’m talking about.
When a person joins an MLM company they have a product or service to sell.
It can be physical products such as nutritional supplements, home decor or any number of things. It can also be digital products as well such as software, e-books and courses.
How To Make Money With Multi-Level Marketing
With a MLM program once you become a consultant with the company your able to sell products retail and it is usually called personal sales.
The thing is that usually it will be hard to make enough money this way because you won’t be able to sell enough products.
This is where the “team building” and down line come into play.
To some this is a dirty word, but a necessary way to have a chance of actually earning any real money.
First your taught to go out and introduce your friends and family to your business. These are what are considered “warm prospects”, that you may have a chance of signing up.
From there a consultant will need to start reaching out to others that they come in contact with. The goal is to keep signing people up so that you as a consultant can earn a commission from their sales.
Sounds easy doesn’t it!
This is where the problem lies. The MLM companies make it sound and look easy to get people join, but that’s not the case.
There are some big differences when it comes to MLM vs affiliate marketing.
What Is A Affiliate Marketing Business
Now lets talk about how an affiliate marketer runs his business to see how it differs from multi-level marketing.
First off the affiliate marketer will sell and market their products retail. They can choose products or services from any industry. There are literally thousands of affiliate programs in every category, so your not limited to selling supplements or candles.
As an affiliate, you can partner up with some of the biggest companies around such as Amazon, Ebay, Walmart just to name a few.
Affiliates earn commissions when a visitor follows a link from their website and makes a purchase on the merchants site.
This can be a percentage of the purchase price or a flat fee.
Earn Residual Income
Some affiliate programs such as membership sites offer a way to get paid over and over again. Earning a residual income is what the most successful affiliates do to make a living.
One of my favorite affiliate training programs offers a residual income of $25 per month for each new member I refer.
Hopefully your starting to see some of the differences of MLM vs affiliate marketing.
Differences Between MLM and Affiliate Marketing
So now lets go back over the details of these 2 business models and compare them in more of a head to head analysis. This should show you the advantages in my opinion why being an affiliate marketer is the better alternative than being an MLM consultant.
There are some big differences when your looking at costs and freedom to choose here.
Start up costs
Multi-Level Marketing – usually when you want to join a MLM you will need to buy some type of starter kit to show retail customer the products. These typically range in price from $39 to $999 depending on the company and which starter kit.
Afiliate Marketing – usually there are no start up costs unless you join some type of membership site.
Multi-Level Marketing – in order for consultants to stay active they usually need to have a certain amount of sales or personal volume. With the majority of consultants not making any money, they end up buying the products themselves just for the chance of one day becoming successful.
Affiliate Marketing – usually there are no monthly fees unless it is a membership site. You will have costs associated with hosting though if you plan to have a website.
MLM Programs– once you join a company and start building a team your locked into that business. Although you could sell other non competing products from a different company. This would be just too hard and in the end your business would fail.
Affiliate Marketing – many affiliate marketers market different products in different categories. There is no need to worry about switching from one to another product because there are no down lines.
Multi-Level Marketing – as a consultant you will have the opportunity to sell in different ways. The first is through retail or face to face sales. Unfortunately most MLM’s retail pricing is high and the sales don’t come easy. So to really earn an income that will let you quit your job you will need to recruit others. This way you can earn a commission off of their sales.
Affiliate Marketing – no need to recruit others to build income. All that needs to be done is to higher free lancers to scale the business up once you have a successful product.
Price of products
Multi-Level Marketing – in this business model the products are typically quite a bit more expensive than comparable products you can buy in stores. The reason for this is that they need to build in the commission structure on top of the actual cost. Having to pay commissions on a bunch of different levels just raises the costs for the end consumer.
Affiliate Marketing – here there is no increase in the cost to the end consumer. Whatever the merchant is selling the products for is the same price retail customers will get if purchasing through an affiliate.
Is Affiliate Marketing Better Than MLM
So as you can see there are some good reason why I chose affiliate marketing over MLM when it came to starting an online business.
I’m not saying that it is easy to make money online with affiliate marketing. I couldn’t have done it without the best affiliate marketer training either.
At least you have choices and in my opinion a better chance at success.
Dark Secrets of MLM
There are some other little tid bits of information as well about multi-level marketing that really opened my eyes about the industry.
Unfair Advantage For Some
When some of these companies plan their MLM launch, they bring in the top dogs in the industry and put them in the top positions.
If your new to multi-level marketing you may not have known that.
The problem with this is that the only ones that make money with MLM are the ones that get in first. You don’t need to worry about that with affiliate marketing.
Low Success Rate Of Consultants
If your not sure of how hard it is to make it multi-level marketing then it would be a good idea to look at some of the company disclosure for these companies.
Typically the percentage of consultants with any of these Multi-Level Marketing companies making any money averages between 1% to 3%.
Is MLM A Pyramid Scheme
This question gets asked a lot and the answer is no. Although some multi-Level Marketing companies come pretty close to being a pyramid scheme.
In order for them to be legit they need to have the emphasis on selling a product versus making money on the recruitment of people.
Am I Biased
When it comes to the MLM vs Affiliate Marketing comparison, you might say that my post is a little biased.
Maybe but its hard to refute the facts that I listed above.
Are there people making money with multi-level marketing? Sure there is.
For me though, I couldn’t approach people knowing that I was selling a product that was overpriced. Then make money off the backs of the consultants.
I know this post is going to stir up some of the people that were looking to get started with MLM. My ultimate goal was to do a fair comparison with the affiliate marketing business model that some people may overlook.
These are 2 of the popular ways to make money.
Unfortunately from my own experience I didn’t find that the products that these multi-level marketing companies promote to be very competitive in price with those found in stores. So why would I want to recruit others to sell products I didn’t believe in?
So if you give me a choice between affiliate marketing or MLM, I will always choose to be an affiliate marketer.
I owe it all to to the best training program and my #1 pick.
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