Today, I want to cover the differences between Affiliate Marketing and Multilevel marketing. Both happen to be forms of marketing to other people but sometimes the two can get mixed up. To make things worse, there are some MLM companies that say they when you join their company, you become an affiliate and are able to promote their products. This is where it can get confusing, so lets get to explaining the differences.
A good majority of Affiliate Programs are free to join
This is one major factor that you need to look into. When it comes to MLM, most need to pay $100 of dollars to upward of $1000 in order to start promoting products. Its funny that you need to pay a company in order to promote their products. Affiliate Marketing programs such as Amazon are free to join because you are helping them generate business. If you are currently paying a membership fee for being an affiliate program, this will lead into the next difference below.
Difference between Affiliate Programs that you pay for and and MLM
While most affiliate programs are free to join, there are some that are not free. Some include services you may be using such as email marketing services (GetResponse, AWeber), Squeezepages (click funnels, Online Sales Pro), and keyword tools if you are an affiliate marketer (SEMRush). If you are using these services and are paying a membership, you are already part of their affiliate program and you have the option of promoting them to other people.
If you happen to be part of an affiliate program that you are paying a membership for, the way to differentiate between this and an MLM is the pyramid structure. If you get refferal commissions from the “referrals of your referrals”, you are in a MLM and not an affiliate program. If you are getting paid only on the people you refer and not receiving kickbacks from the referrals of your referrals (sorry if this sounds confusing), then you are part of an affiliate program where you are hopefully using the service.
This is a major difference that I need to stress out because there are some MLM companies that are trying to pass themselves of as a company that has an affiliate program. I have experienced both affiliate marketing and MLM to be able to tell the difference and have found that I love affiliate marketing more.
With that being said, it is still crucial that you do your research on affiliate programs before signing up because some affiliate programs are not great quality and others may be scams posing as an affiliate program.
Some MLM’s require that you hold Inventory
With MLM’s including those that are well known such as Herbalife, Avon, MaryKay, Beachbody, you are required to hold inventory and buy it so that you can sell it to your friends and family. While some of the inventory that a distributor holds can provide value to the ending customer, the problem only comes up when the inventory does not sell.
While I am sure that there are some decent MLM companies that buy back unsold inventory, there are others that do not buy it back and the distributor can be left with a room full of useless stuff.
Affiliate Marketing on the other hand does not require that I hold inventory because everything that I do is online using this website. All you are doing when it comes to affiliate marketing is redirecting traffic to another company to give them more customers. Think of this like having that spinning arrow that tells you where the store is.
I don’t have to prospect or seek people out
This is a major thing that you will be relieved to know. A lot of MLM companies will tell you that when starting out, you need to make a list of 25, 50, or 100 people. They want that list because thats who you are going to build your business. While it does help to have family that will support your business ventures, it is very unnerving having to ask them to buy products that they may not need or join your “business opportunity”. In fact, doing so is a proven way to getting people to avoid you.
To make things worse, there is only a finite amount of people that you know that you can personally talk to before you have to start talking to strangers. After you have exhausted all your friends and family, most MLM’s expect you to start seeking people out including at job fairs, colleges, weddings, and anywhere where a large social gatherings may occur.
With Affiliate Marketing, I do not have to go to these social settings and annoy people because I learn how to build traffic to my site using SEO. I am able to find what people are looking for in google and serve that audience as needed. The best part about it is that I can serve over 4 billion people as that is how many people are online.
I am not committed to just one product
With an MLM, you are limited to promoting one companies product or service. In fact, I have heard that some companies don’t want you promoting products of other companies. BeachBody for example wont let you join any other MLM.
This is not the case with Affiliate Marketing. Walmart is not going to forbid me from joining targets affiliate program just because I am affiliate with their affiliate program. In fact, if Walmart were to go out of business for whatever reason, I can still monetize my website by getting visitors to purchase items from target. All I do is sign up to targets affiliate program and tell them about my site and the amount of traffic I get.
The problem I have with the restrictive MLM model is that if that company goes out of business, you go out of business to. In affiliate marketing, if a company goes out of business, then all I have to do is fill out another application at another affiliate program and my monetization continues without being interrupted.
No conventions where you are pumped up with the RA RA RA cheerleading
While these settings may be nice as far as meeting people and having a positive energetic vibe to them are concerned, there are some who feel like these places are nothing more that cult like practices of the MLM industry with the cheerleading.
In MLM, the speakers are usually trying to get you pumped up by telling you how the company has changed their life. While I am sure it is possible that it has, the feelings of these touching moments usually wear off and most distributors need to find new sources of motivation after going through more failures. The speaker may also use some cheerleading tactics or reverse psychology technique. I have heard my fair share of people who said:
95% of people have failed! Are you going to be like them?! Are you going to be average?!
Affiliate Marketing does not give you these motivational speeches that tug on your emotions. It doesn’t try to outsmart you using your emotions against you. In fact, if you are asking the correct people, they can tell you if affiliate marketing is for you depending on where your mindset is at.
Affiliate Marketing is just a lot less stressful for me as I do not feel any feelings of burdening someone else. In fact, I feel great knowing that I truly am helping someone else with their purchasing decisions. It is also easier on the wallet considering I do not have to purchase $1000+ in inventory or $100+ in convention tickets. With Affiliate Marketing, my costs are low and reward is high as long as I do the work.
Thank you for reading, if you have any questions about the MLM industry or affiliate marketing industry as well as any differences, please feel free to ask in the comments below.
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