The difference between MLM and affiliate marketing

There are many ways to start your own business. Some are better than others. Here, I want to share the differences between Multi-Level marketing and affiliate marketing. Let me tell you the one thing both methods have in common: you promote someone else’s products.

The difference is that with MLM, you are a seller and a recruiter, a manager, a team builder. There are many responsibilities that goes with MLM that are not present in affiliate marketing. With affiliate marketing, you are a promoter. You don’t have to get your family and friends involved in your affiliate marketing business to become sucessful.

Let’s dive in!

*May contain affiliate links. Clicking on the affiliate links will most likely result in the same price you would pay elsewhere or you may get a special offer using those links.

What is MLM?

Multi-level marketing is a business model that has been around for a century. Basically, there is a company that create products. Then there are distributors who sell the products to costumers and the distributors recruit new distributors to sell products. The terms used by each company can be different, but it’s all the same system.

Can you think of any examples or MLMs? They offer a wide variety of products, from essentials oils to plastic containers. Want some names? Tupperware, HerbaLife, DoTerra, Melaleuca, Usana, Avon, etc. There are many out there and some of them are a pyramid schemes that won’t make you earn money.

There are two ways to make money with an MLM: sell their products and recruit new distributors that will grow your network. Be aware that there are pyramid schemes that seems to be real MLMs.

One way to find out is if you HAVE to recruit new distributors to make money. If recruiting is more important than selling the products, red flag alert. Legitimate MLMs, you make money selling the products.

In an MLM, you are a seller. If you are not crazy about the idea of having to sell, this is not for you. You will have to find people to buy the products you have to sell on order to earn your commission. That is often a downside to the MLMs, you have to buy a certain amount of products each month even if you are not selling anything.

Be careful with all the costs that can come when getting in MLM. The more costs, the less legitimate. Is there a cost to become a distributor, like an annual fee? Do you have to pay for the training and is it so far that you have extra expenses like plane ticket and hotel? Are there website fees? Do you have to pay for promotional material? Do some research and find active distributors. Ask them about the training, the inventory, how much they make all expenses paid.

In all MLMs, there is a training offered. The first steps can be free and then you might have to pay to learn new managing skills, very useful when you have to recruit new distributors and coach them.

In short, Multi-Level marketing is a model where distributors have to buy the products they then have to sell to customers they find doing marketing campaigns and promotions.

The distributors have to deal with inventory, customers and recruiting new distributors to increase their earnings. If you like to sell and you want to learn how to manage your business, MLM can be a good way to get started. Keep in mind that it will NEVER be your OWN business. You are dependent of the company you are selling the products from.

What is Affiliate Marketing?

Unlike MLM, you don’t have to buy products and sell them directly to the customers. Affiliate marketing is not about selling, it’s about promoting.

There are millions of products online from millions of companies. You pick a product you like, you become an affiliate, you get an affiliate link and when people buy from you link, you get a commission.

Affiliation implies that you create a client magnet to drive traffic to the actual website’s product through your affiliate link. You want to get people interested in what you would like them to buy.

No inventory, no customer service, no recruiting, no selling. You need to learn the basics skills of internet marketing to become a successful affiliate marketing. If you want to learn more about affiliation, read this article I wrote.

Watch Out For Scammers

Whether you want to get started in MLM or in affiliate marketing, there are people who just want to make money from you. I’m going to share with you the red flags you have to look for, for both methods.

If you see some red flags, it doesn’t mean it’s a scam. It means you have to do some research to make sure you know what you will put your money and time in.

Red Flag #1 Anyone who claims you can make X amount of money in X amount of time, large returns and a proven system that really works. There could be many upsells, like coaching calls, or more training that can add up to your bills. There can never be a guaranty on how much money you can earn no matter what system, product, method you are using.

Red Flag #2 You are pressured to buy. You all have heard this before: Buy now before it’s too late, before the price increase, this special offer is only available for the next 24hours, act now or you will loose this opportunity, etc. It’s a sales tactic. It’s the worst. Some scammers want you to buy now before you can do your research and find any important information about their product online.

Red Flag #3 When you do your research, you find multiple bad reviews or complaints about the company. There is the Better Business Bureau where you can find some information if there where complaints about a company. The good thing now is that you can find tons of information online.

Red Flag #4 They tell you it’s easy. That is a big, fat lie. If it was so easy 99% of the people wouldn’t quit. Again, there is a percentage that comes from human nature. The ability to give up easily. Just look at how many people stick with their New Year resolutions. It could be easy at some point, for some people. It could be hard for others. Everybody has different skills and different forms of intelligence.

You can read more on affiliate marketing scams here.

We are talking about building a business. I don’t know any businessman who ever said that it was a piece of cake building his business. If you do, let me know in the comments.

You have to put in the efforts. It can get time-consuming. You will have to pay for training and for learning new skills. You want to keep that in mind: you will have to invest in yourself in order to build a successful marketing business.

You may be interested in learning more on the costs of starting an affiliate marketing business.

Things MLM and Affiliate Marketing Have in Common

Affiliate marketing and Multi-Level marketing are both business models where you are not 100% the owner of your business. Why? Because both models depend on the availability of products to either sell or promote to prospects and existing clients.

As long as you are not promoting and selling your own product, you are not totally in control of your company. It’s OK. You don’t have to.

Both methods are very good ways to learn about marketing and building a business. You get to learn about products, how to promote, how to increase your network, etc. Once you have mastered those new skills and knowledge, you can scale up your business creating your own product or service.

You can also make money or loose money using both affiliate marketing and MLMs. Do your homework. Take time to decide if you are ready to invest time and money into something new, without knowing the outcome. It can be scary, but if you are committed and you found the right products for you, you have more chances for success than someone who doesn’t care for any of the products and just think about making money fast.

Making Money Fast

MLM and affiliate marketing are not ways to make money fast. First thing first, you have to learn skills on how to build an online business, how to sell to people, etc. If you already master those skills, it will be easier and you might be able to make money faster. For anyone who is getting started, you will have to invest your time.

Often, any product or system that promise you to make money fast, you will have to put it the money to make money. By the way, what is considered fast? If you buy a system, do you expect to make money the same day? Is making money in the first week in OK? Do you bring value to people? Do you like the products you are selling or promoting?

Weirdly, most promoters talk about making big bucks in a short period. They show you all the numbers from people they “helped”. How easy it is to make money, how little time they have to invest, only 30 minutes to 1 hour per day, max. Yet, they also say that their product is NOT a get-rich-quick scheme.

There is a lot of contradictions in the business world. Of course, everything would be easier if everyone was legitimate and honest about their products and their company. Since it’s not the case, you have to be careful and do your research before choosing a company.

In Conclusion

Multi-level marketing is based on direct sales and recruitment. Affiliate marketing is based on promotion to generate traffic and sales.

You have more responsibilities when you are in MLM than in affiliate marketing. In MLM, you have to manage your inventory, you have to find prospects and sell. You also have to recruit and train new distributors and make sure they stay in your team. In affiliate marketing, you have to find products to promote and ways to promote them.

No matter what you do, when you are getting your business up and running, if you already have a job, build your business part-time. If things were to go well, you will have the chance to choose between if you want to keep your regular job or if you want to quit it to invest your time in growing your business.

If you choose affiliate marketing and you don’t know how to get started, you can try for free here.

Let’s get Started,

Cynthia