Let’s take a look at Multilevel Marketing and Affiliate Marketing; Let’s see their differences and similarities, and if you can be successful with both, or any of them.
Multilevel marketing (MLM) will want you to believe that joining MLM companies will give you an incredibly huge revenues that will help you achieve your dreams – a good work schedule for you to spend more time with your family, your own business, your dream house, a luxury car, sending your kids to high end schools, travel anywhere, and a lot more. It is likely for someone to believe, especially if they are seeing others’ dreams come true with MLM.
If you want to join the MLM force, you have to remember two things. First, you should be knowledgeable of direct marketing and second, you should have several lead generation strategies. MLM works if you have a product that is being pushed through multiple levels of distributors. MLM products are not sold in stores and use word of mouth as promotion. This business allows distributors to have their own team to create their own selling networks. If the members of their selling network earn, the distributors who recruited them earn as well.
Sounds easy? MLM is not quick or easy as most distributors in the industry will tell you. It can be easy at some point, especially when you have a lot of family members, relatives and friends who are willing to make money for you. The MLM reality is that it will take you a long time, mainly because of the recruitment component of the model. Recruitment is essential as it will put you on top of the structure. Unless you have a lot of friends and family that are willing to basically work for you to make you money; being on top means that you are earning decent commissions. To simplify, earnings come from the people under you.
In order for you to get in, you have to purchase a starting kit which serves as your registration fee. You might also be required to have stocks of the products that you promote and/or sell.
You can see how it works in this example of the MLM Company
So what is in it for you with affiliate marketing? Let us look at the differences between MLM and affiliate marketing structures.
Affiliate marketing is common to everyone. We may just do not notice it. When you eat in a restaurant and start recommending it, that is already step one to affiliate marketing. Step two is converting the recommendation to a passive income. How?
Imagine companies placing product advertisements on websites, then people checking on them. The visitor will be directed to another site where they can actually buy the product. When there is a sale, the company that placed an advertisement will pay the site owner the commission. Anyone can be an affiliate and create their own websites.
According to Cassandra Gowing, a social media manager at All Saints, companies which are engaged in affiliate marketing normally deal with bloggers that have a genuine interest in the brand. This means that affiliate marketing relies heavily on the quality and content of the brand. A brand’s content strategy can make or break an affiliate marketing program (Paul Stewart, Account Director at Affiliate Window). Generally, affiliate marketing is the process of earning commissions by promoting someone else’s products or services. No need for product stocks.
The Differences Between Affiliate Marketing and MLM
Let us check on some notable differences between MLM and affiliate marketing:
- Monthly costs – There is no cost in becoming an affiliate but you may invest some money into education, to host a website (if you want to but you can also have one for free here) unlike MLMs which have start up and monthly costs which will depend on your personal volume.
- Products – In MLM model, you are only allowed to promote and sell products under the umbrella of the company you signed up for. Affiliate marketing enables you to sell products across all categories.
- Sponsorship/Recruitment – If you want more income, you will have to recruit under MLM structure. In contrast, in affiliate marketing, there is no need to recruit to increase income. Affiliate marketers use the internet mostly, to reach to people. On the other hand, MLM puts effort in exhausting networks. The real money comes from recruiting others to promote and sell the product or service for you.
- Pricing strategy – MLM pricing is a bit higher compared to the market standards. In affiliate marketing, whatever the merchant’s pricing is the same as the affiliate’s making the product easy to sell.
Both MLM and affiliate marketing sell exclusive products. Like MLM, affiliate marketing lets you become an independent sales representative and earn from the sales (products or sign ups) that you generated. You will also be paid based on your results (recruitment excluded). Additional advantages of working through an affiliate network include access to more companies to carry their products, account managers who are willing to help you grow.
The companies under affiliate marketing leverage on the commission-based and outsourced sales force only.
How to Be a Successful Affiliate Marketer?
Here are the three tips to be successful in affiliate marketing:
- Promote products or services that you personally used or experienced. Be honest.
- Refrain from convincing people to buy your product or engage in your services. Create a blog or video about a review of a certain product or service and let people try out of curiosity or need.
- Be willing to fail and try again.
The Summary – MLM or Affiliate Marketing?
If you are wondering which is the best way to build a home-based business, the popular options are MLM and affiliate marketing. But which is really better?
The choice will depend on your background, skills and motivation. I am pretty sure that the above comparisons will somehow help you decide.
I personally prefer affiliate marketing because I was successful with it. I wasn’t successful with MLM. It could be opposite for you. But if you want to work online from home, then the affiliate marketing is better.
You can learn and start for free with Wealthy Affiliate or Affilorama. There’s no financial risks involved, although you’ll need to invest some time in learning affiliate marketing and work hard to build your online business. But if you aren’t ready to learn and work hard, then you should forget about your own business.