It’s not surprising you found this page. This website caters to a very specific crowd – those who have never made money online, but want to. One of the first things most new internet entrepreneurs look for is the best way to earn money online. Two of the most common methods found are affiliate marketing vs. multi-level marketing. So, between the two, which one is better?
Well, seeing as how the domain name of this website is AffiliateMarketerTraining.com, you can probably guess that my answer will be a bit biased. Affiliate marketing isn’t only superior to multi-level marketing, I don’t even waste my time with MLM. Even if you become successful at MLM, your business is doomed to fail eventually.
In this article, I am going to explain why multi-level marketing is a waste of time while affiliate marketing is a real and sustainable business as long as you have a great business plan. But first, let’s cover the basics. What is the difference between affiliate marketing and multi-level marketing?
Is MLM A Scam?
- Before you go any further, check out the same exact training course I used to become successful online.
What Is Multi-Level Marketing?
With multi-level marketing, you essentially join a team to promote a product or service. Everyone in the MLM network is attempting to promote the exact same product or service. In most cases, you will be recruited by someone who is already a part of the network and be on their team. A typical MLM network will look a bit like this:
If this looks very similar to a pyramid scheme, that’s because multi-level marketing is about as close as it gets while still keeping things legal. As long as a legitimate product or service is being promoted by the network, it is a legal pyramid. So, what most MLM companies do is find a product or service to promote, then create the network around promoting that. What makes a pyramid scheme illegal is when no product or service is offered – you would just pay to be a part of the network while recruiting others into the network to earn commissions.
From my experience, 99% of all MLM programs out there are borderline illegal. If you only promote the product or service in the network, you will hardly make any money at all. That’s because you’re sitting at the bottom of the pyramid. The real money comes from recruiting others to promote the product or service for you. The more people you recruit, and the more people your recruited people recruit (that was a mouthful, I know), the higher commissions you will earn on ALL sales.
So basically, when you’re at the bottom of the pyramid, you are basically sharing the majority of your commissions with those higher in the pyramid. Until you recruit a ton of other people, you will never be able to earn a full-time living. That results in the pyramid looking a bit something like this (with the owner of the MLM company sitting on top with a few of his buddies):
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Why MLM Is NOT A Sustainable Business Model
First of all, understand that owners of MLM networks are usually very good marketers themselves, only a large number of them are also pretty unethical. They will tell you whatever you want to hear in order to get you to join. From showing you other successful “everyday” people who have made big bucks to assuring you that they are “different” and are “nothing like a pyramid scheme.” They already know what your concerns are and will address them in a way that will help guarantee them another sales rep (what you are to them). Also understand that these unethical marketers have a way of brainwashing others to go out and recruit more people. Rest assured, you’ll be told more than once to go out and recruit your closest friends and family members.
So for starters, let me tell you that multi-level marketing is NOT quick or easy. Unless you have a ton of friends that are willing to basically work to make you money, it will take you a long time to recruit enough people so that you’re high enough on the pyramid to earn any decent commissions. It can be a full-time job just recruiting others to join the network, let alone selling the product or service you’re supposed to be pitching and earning commissions on. And what do you think the people you recruit will be doing? Selling that product to earn others higher in the pyramid a commission or spending their time trying to recruit others?
Even if you do manage to get high up on the pyramid, you are NOT running your own business. You are reliant on those below you on the pyramid to sell. If they don’t sell, you don’t earn. Plus, you can’t even pick and choose which products or services to promote. You’re at the mercy of the MLM company to decide that. In other words, you’re nothing more than an employee and they can drop you at anytime.
There may be some of you out there who insist you can make money with MLM. I agree, you can. But if you want a more stable and legitimate long-term BUSINESS (one that you actually control) that takes the same amount of time to be successful, affiliate marketing is a far superior option.
So how do the owners of MLM networks making their millions (and they do make millions)? In a couple different ways. First of all, with many of these networks, if you do sell the products or services you’re supposed to be selling, they get most of the commission. Another way these companies make a ton of money is by selling additional “marketing plans” to help you make more sales. You’ll get special access to a marketing system or get improved products to sell or get discounted newspaper ads or something else that will draw you in. When your marketing package doesn’t drive profits, they will keep trying to up-sell you until you finally quit.
What Is Affiliate Marketing?
Affiliate marketing is a bit different. There are no teams involved and you can work directly with legitimate companies like Amazon or Ebay. Instead of writing out how it works, check out the below video I made about the affiliate marketing business model:
Affiliate marketing gives you far more leverage than MLM. First of all, you don’t have to rely on a team. You get to work directly with the company you are marketing for and earn all of the affiliate commissions they offer. Plus, you can easily drop one affiliate for another, or go with multiple affiliate programs.
For example, on my website DogFoodInsider.com, I was originally partnered with PetFoodDirect.com. They offered a higher commission percentage than many other potential affiliate partners and so I gave them a shot. However, I now use Amazon.com as my main affiliate income source on that website. Even though Amazon pays a smaller commission percentage, they are able to convert my referrals into sales at a MUCH higher rate, ensuring me a higher check at the end of each month.
That’s just one of many ways affiliate marketing gives you far greater leverage than any MLM network. Heck, one day, I might open up my own store on DogFoodInsider.com and simply sell my own products. Who knows!? The point is, the infrastructure is there. If I want to make changes, it’s a simple procedure and I don’t have to start all over again.
Affiliate Marketing Should Be Treated Like The Business It Is
The same can be said for both multi-level marketing and affiliate marketing – the majority of those who get started never earn a single dollar. The number of those who become full-time marketers is less than 1%. Why? Because people don’t treat either of these businesses as the BUSINESS it is. I can’t speak for MLM, but affiliate marketing is a multi-billion dollar per year industry with a very bright future outlook… If you do it right. How do you do it right?
- Choose The Right Niche – In order to be successful in affiliate marketing, you must go after the right industry. One with enough competition so you know it’s profitable, but without so much competition that you are competing with too many people. You need to find the low-hanging fruit.
- Find The Best Affiliate Program – There must be 10’s of thousands of affiliate marketing programs in virtually any industry. So, who do you partner with? Finding a program that offers a truly great product or service while also providing great commissions to affiliates is key.
- Have A Diverse Marketing Plan – Once you know the product or service you will be promoting, you need a diverse marketing strategy. Creating a website and promoting it on search engines or social media is not an easy task. You must have a well thought out plan if you truly desire success.
- Know How To Re-invest – When your affiliate business becomes profitable, it is important to know how to re-invest back into your business. When you do, growth becomes explosive, and millionaires are made.
Without treating affiliate marketing like a legitimate business, you will not create a legitimate business and you’ll be doomed to fail. But as a rookie, you might not know where to even start. May I make a suggestion?
Check out this crazy awesome training course. It won’t make you an expert, but it was designed specifically for those of you who are just getting started. It’s a great primer into the world of affiliate marketing. By the end of your first week, you’ll have a solid business plan, you’ll know which products and services you will be promoting, you will have a great understanding of the fool proof CTPM process, and you’ll even have your very own custom designed affiliate marketing website live for the world to see. Just take it one day at a time and in just one week, you will have officially launched your biz.