Multi-Level Marketing Vs Affiliate Marketing [Which Is Best]
Multi-Level Marketing Vs Affiliate Marketing!
Call it the great debate if you must! But one you must choose, and one only if you are to succeed in business.
The aim of this article is to educate you in both business models and to help you to decide which on is best for you and which you are most likely to succeed with.
I am a content marketer and if I wish I could select any of the two business models, create a businesses online using either Multi-Level Marketing Or Affiliate Marketing with this training program and succeed.
While I have a strong preference for affiliate marketing, as an online businessman and digital marketer I know the real key to your success with either is in your marketing skills regardless of which model you prefer.
You may have seen many of my network marketing reviews and how balanced and factual I remain in them - that is for one main reason.
Multi-level marketing works!.
It is the individual that fails, not the business model itself, unless in rare case there is something a miss and an evident scam is going on.
...and you know the saying about a bad workman and his tools!.
Let's get on and find out all we can about Multi-Level Marketing Vs Affiliate Marketing and do some myth busting along the way!.
Keep reading if you are ready for some rock solid facts!.
More...
What Is Multi-Level Marketing?
Multilevel marketing, often referred to as network marketing is a business model and strategy used by some (not all) direct sales businesses to motivate distributors to recruit new distributors into a business opportunity and start their own distributorship with the company and/or brand.
These new distributors are then added to the recruiting distributors downline in a particular compensation model with the recruiting distributor, and most often the upline also earning a passive residual income based on the recruited distributors sales.
The most commonly used compensation models are the unilevel model and the binary model.
MLM Vs Affiliate Marketing - Which Is Best #NetworkMarketing #AffiliateMarketing
A multi-level marketing company can operate in any industry, market and sub-market that they wish or cross multiple industries like some of the bigger more famous network marketing company's like Amway, Melaleuca and Shop.com do.
The most common industries that MLM businesses operate in are:
The video below gives you clear solid presentation what Multi-Level Marketing is.
Click play and enjoy!.
Are All MLM's Pyramid Schemes?
No,
There are distinct differences between a fully legal and legitimate Multi-Level Marketing company and a Pyramid Scheme.
One of the key aspects is having a retail element attached to the business.
Note, that I say retail element and not product.
Many other websites and bloggers I see making the very succinct but very distinct error in assuming that a network marketing business must have physical product in order to be a fully legitimate and legal network marketing business.
It is a retail element that is key.
The wording of which formed part of the landmark and famous 1979 Amway ruling in the FTC Vs Amway case permitted service based industries such as Insurance, Legal Services and financial services to operate their businesses using this business model.
Of course, in the modern day this also permits digital products to legally be sold in a multi-level marketing fashion.
Warning: All financial entities be it insurance, investment or cryptocurrency related must be registered with the SEC in order to sell those products to you. If they are not registered with the SEC - walk away!.
When there is no retail element or products of value being sold then you have a pyramid scheme.
Note, there is emphasis on the "product of value" as it is possible for a network marketing company to have a retail element and a product (physical or digital or a service) as part of their business and be considered legally as a pyramid scheme.
This is to prohibit someone setting up a network marketing opportunity selling bags of fresh air (a product of no value) as a product for US$200!.
Unintended Pyramid Scheme Case 1:
When a product is overpriced or difficult to sell a multi-level marketing company even though not legally identifiable as a pyramid scheme can end up operating as one due to distributors "abusing" the compensation plan and seeking to recruit others to recoup their losses.
This happens when the products are difficult to sell and distributors are being compensated for recruiting others.
Unintended Pyramid Scheme Case 2:
Where there is an autoship obligation added to Multi-Level Marketing opportunity, even though this may not be the intention of the company nor can be in the eyes of the law be seen as a pyramid scheme, can be abused by members who just recruit and bang their recruits on autoship of the products and encourage others to do the same.
When any of those two cases happen you have unintended pyramid schemes in operation even though legally speaking they are not pyramid schemes but are functioning in this way, (effectively speaking!).
Confusing?
Stick to the hard and fast rule of looking for an MLM that has a retail element and no autoship and affordable easy to sell products.
Watch the video below if you have difficulties in identifying pyramid schemes.
Common MLM Compensation Plans And Models
The vast majority of compensation plans used by Multi-Level Marketing company's will use either the binary compensation model or the unilevel compensation model.
Both of which are very easy to understand, let's start with the Binary Compensation Model.
The Binary Compensation Model
This model begins with you at the top and with the obligation to recruit a minimum of 2 people into the business opportunity to.
Each of those 2 that you recruited must bring in two people each, totalling in 4 recruits, and those 4 must recruit two each and thus each level of the downline has double the number of recruits than the previous level.
See the image below for an example of what the binary compensation model looks like.
As you can see from the image above you have a left leg and a right leg, often called your power leg and you pay leg; more often than not your weaker leg will be the one used to calculate your residual earnings.
The Unilevel Compensation Model
Again this model is very easy to understand and explain.
You are placed at the top of this compensation model. When you bring people into the business opportunity, these are your personal recruits and are often referred to as your direct recruits or your front line.
These are placed below you on level 1.
When your level 1 recruits bring in others to the opportunity they are placed below your level 1 recruits and on your level 2.
The unilevel model continues in this fashion.
See the image below for a visual representation.
Multi-level marketing is a viable business model and there are other compensation models used which are far less common that the two that I have given you an overview of.
These represent about 98% to 99% of all network marketing compensation plans. Other models include various matrix pans and a company can use and develop their own.
Sometime compensation plans can get complex and convoluted and involve the use of both a binary and unilevel model for different aspects of the business namely direct retail sales and recruitment.
Get A Free Replicated Website!
Usually when you join a network marketing opportunity, you get a free duplicated carbon copy cookie cutter website.
Which may seem great and fantastic but the problem is it is a dead duck!.
It's dead in the water as far as ranking it in search engines and getting highly targeted free organic traffic goes.
You are left highly dependent on either paid traffic which requires skill, a lot of know how and a whole bunch of money to spend of PPC campaigns.
Learning Paid Traffic is something that will help you a lot in your quest to get more MLM Sales.
The best thing you can do for yourself and your business is to reduce your dependency and reliance on the MLM opportunity's replicated site and build your own site.
When you build your own site you have much more control and can promote similar and related products that your audience would be interested in.
Later you can add in display adverts and earn a truly passive income from advertising revenue resulting in 3 source of income just because you took the smart decision to run your network marketing business properly by building your own site!
The 3 income sources are:
- MLM based income
- Income from related products
- Display advertising revenue
Plus by having greater control you can start to automate some processes and build a passive income and learn how to drive targeted free traffic to your site.
What Is Affiliate Marketing?
Affiliate marketing is performance based marketing where you earn a direct sales commission based on your ability to sell products or services.
You sell other people's products and earn a commission for your efforts. These can be considered as direct retail sales.
The more you sell naturally the more you can earn. Similarly, if you don't make any sales, you will not make any earnings.
Sales are usually tracked by a special link called an affiliate link which is unique and identifiable to each individual affiliate.
Your affiliate links drop tracking cookies into a visitors browser and can last anything from 24hours in the case of Amazon to, well lifetime!.
The duration of the cookies is down to each individual merchant or network.
The means that the person that clicks your affiliate link doesn't need to buy straight away for you to get credited with a sale and earn a commission.
If they buy before the cookie expires you will be credited with the sale and earn a commission.
Typically, commissions earned can vary from a fixed rate in a dollar amount per sale or a percentage of each sale generated.
Some affiliate programs have recurring commissions which are paid out every month.
An Affiliate program can be self managed by an individual merchant or managed by a network.
Popular Affiliate Networks include:
- ShareASale.
- Amazon Associates.
- CJ Affiliate (formerly Commission Junction).
- ClickBank
- ClickBetter
- eBay Partner Network (EPN).
- FlexOffers.
- JvZoo
- Pepperjam.
- Rakuten Marketing (formerly LinkShare)
- ShareASale.
See the image below for a pictorial representation on how affiliate marketing works.
Another Way Of Thinking About Affiliate Marketing
Affiliate marketing is referral based marketing. Let's assume you are dressed to kill and just looking awesome have on a fantastic shirt or blouse and it just looks amazing on you.
Your friend compliments you on your fabulous shirt or blouse and asks where you got it from.
You tell them that you got it from XYZ store on the high street or a specific online retailer.
Your friend just absolutely loves your shirt or blouse and just has to have one of their own, goes out or goes online and buys their own.
Based on your excellent recommendation and advice they made a commercial transaction.
Did you get a referral commission for recommending that awesome shirt/blouse to your friend....most probably not!.
But in the case of running and managing your own website you can.
You are just helping people to buy products they are already interested in and seeking information about and when they click on your affiliate links and make that transaction and buy a product you get paid.
Do that enough time and from organic traffic sources you have a passive income on your hands!.
Common Benefits of MLM's & Affiliate Marketing
There are mutual benefits that both MLM's and Affiliate Marketing have in common and that is you can be your own boss.
Let's face it this is one of the main reasons for going into business is you get to be your own boss.
Getting to fire your boss sounds awesome to most people!.
Work well and that can happen with both business models. Financial freedom is something you can look forward to.
Another huge common benefit shared by both is the ability to build multiple streams of passive income.
With Network Marketing this can be working the compensation plan and recruiting a lot of people on each leg of the unilevel compensation plan and having a great income source from each individual leg and the entire unilevel downline.
From affiliate marketing this can simple be as I have multiple website focused on different topics all generating an income.
For both Affiliate Marketing and MLM's this can be running multiple income sources on your site.
This is why it is best to build your own site as a network marketer.
Personally I just LOVE the idea of multiple income sources on a single website.
The Differences Between MLM's & Affiliate Marketing
If you have been anywhere in Asia you will know that phrase "Same Same But Different".
In the case of Multi-level Marketing Vs Affiliate Marketing just as there are similarities and shared benefits there are differences.
Let's talk about the differences between Multi-Level Marketing and Affiliate Marketing.
Recruitment
With Multilevel marketing you are required to recruit and promote the business opportunity to others and build up your downline team if ever you are to achieve a passive income.
You will likely need to train, encourage, manage and inspire your recruits and the whole team to make those sales that result in achieving a steady and solid passive income.
Recruiting family and friends rarely works and they are hardly every rushing to join your business opportunity.
This untargeted unfocused recruitment often leads in both failure and broken relationships.
Just spamming away on social media doesn't work either and will only lead to getting your account banned.
Recommended: Learn How To Increase Your MLM Sales
With affiliate marketing you don't need to do any recruiting. This is one of the key aspects that gives me a strong preference to Affiliate Marketing as a business model of choice.
There is no need to pitch and try and sell a business opportunity to family or friends.
In fact, most of my friends don't know how I make a living online, just that I have a few websites and make a living online.
Face To Face Selling
As great as you can and may be at recruitment there is no getting away from having to make face to face sales when it comes to network marketing.
All businesses need to make sales and the real life blood of any MLM opportunity that you get involved in you will need to make sales, most of which are likely to be done on a face to face basis.
With affiliate marketing you still need to make sales - there is absolutely no getting away from that fact as no sales mean no commissions.
The difference is you do not need to make those sales on a face to face basis as your website can do that for you.
Home Parties
It is very common for multi-level marketing companies to encourage and oblige that you hold regular home parties to give product demonstrations and take orders.
This can end up costing you a lot of time in organising the event but in getting people to turn up and informing of the time and place, it can end up costing a lot in terms of product samples used.
You certainly would be seeking to earn a sizeable commission from each sale for the party to be worth your while.
Don't forget the whole cleaning up afterwards when your guests have gone. Time is money, and your earnings are limited by how much you can sell and how often you can hold parties.
With affiliate marketing there are no home parties! Nice!.
Cost Of Getting Started
One variable and difference is the cost of getting started.
Network marketing companies often require you to spend hundreds, and in a few cases a thousands dollars to get started with their business opportunity and have ongoing costs like an obliged monthly autoship and/or minimum sales quota to remain commission qualified.
With affiliate marketing you you can get started for free and in only a few minutes you can have your own site up and running with zero coding or programming needed.
This is a stark contrast to MLM's than can end up costing you a lot of money!. You can join affiliate networks at absolutely no cost to yourself.
To succeed you will definitely need to spend some money to get your own unique and brandable domain name and some tools if you are serious about building a proper affiliate marketing business.
A domain name will set you back less than US$20 per year!.
How You Get Paid
MLM compensation plans and how you get paid can be rather complex and difficult to understand at the best of times!.
There are various complex ways to calculate your commissions and earning for straight forward to, well, just mind boggling and difficult to comprehend!.
When I first started studying network marketing and their compensation plans it sounded like I was leaning a whole new language.
- Upline, downline
- matrix, binary, Unilevel, Stair step breakaway model
- Generational, fast start, leadership, lifestyle, rank achievement bonuses.
- And so on.
Affiliate marketing has none of those complexities at all. When you sell a product you earn an agreed commission.
How much will vary on each product and each of the network/company you are selling the products for.
It really is that simple and straight forward.
Who Is Best Suited For MLM?
As I said at the very start of this article, Multi-Level Marketing is a viable business model and despite my preference to affiliate marketing the purpose of this article is not to rip into MLM's and just slag them off.
This is not what I am about nor this site.
Far from it!.
I am a content marketer (AKA Blogger), I LOVE blogging, everything about it, encourage people to get involved with and to get started creating their own sites from which they can generate a full time passive income from.
...Network marketing is not only completely compatible with content marketing it is best run and managed in this way due to the ability to get tons of free organic traffic that result in sales!.
The key is to understand who is best suited for Multi-Level Marketing?.
The social alpha with a skill for selling face to face, able to inspire, motivate and encourage others, hard working and is a great communicator both verbally and written.
This kind of person has the character and personality to succeed with network marketing opportunities.
If that sound like you that I just described - then go for it!.
Just don't forget your digital salesman that will work away 24/7/365!.
Who Is Best Suited For Affiliate Marketing?
I have been an affiliate marketer for a few years and earning a full time income online since 2015 and feel qualified to make the following statement.
There is no one particular person or personality type that is best suited for affiliate marketing.
Affiliate marketers come from all walks of life, countries, cultures, ages and backgrounds.
Personally I don't fit that description that I gave you for the ideal person that is best suited for network marketing as I am a very quiet unassuming person.
I like being this way.
I like to work on my businesses and the various affiliate marketing sites that I have.
I love it and I enjoy it.
I am far to quiet to be involved with face to face selling, recruiting or hosting any kind of home party!.
And that is fine.
My websites are up and running 24/7/365 making sales and earning commissions for me!.
If I was to run a MLM, that is how I would run it, online, with an original website and using content marketing to generate sales and get recruits.
Technology has evolved so far that anyone can make their own website rather easily and in only a few minutes without knowing any code!.
I built this site and I don't even know a single line of code!.
If you are best suited for affiliate marketing or if you are a great fit for this business model then this is the best way to get started with affiliate marketing.
The Drawback Of Both MLM & Affilaite Marketing
Ok!.
I have spoken about the benefits of both Multi-Level Marketing and Affiliate Marketing, their plus points and their differences and their similarities now it is time to talk about the major drawback and downside that they share.
This major drawback is
YOU NEED TO BE PREPARED TO WORK FOR FREE!
That sounds like a proper wake up call or kick in the backside, but seriously this is how it is for any business online or offline - no matter which business model you are using.
Unlike a regular job where you can expect to be paid at the end of every month for the work that you have done, and mostly you have perhaps not quite wanted to go to the office but had to force yourself to go, right?.
Well,
If you want the benefits and rewards of a full-time passive income you will have to recognise and face up to the fact that are are not going to be paid straight away, or even the same week or even the first few months for the work that you have done.
If you want to reap the rewards of a passive income and sending your boss that letter that starts with "Dear Boss I Quit" this is something you will have to accept.
There is that natural period when you are getting started where you are working for free. This is when you are building the foundation to your business.
Just trust the process because when you start to gain authority and traction your income has that tendency to grow exponentially.
The first 2 maybe 3 months you may earn next to nothing then suddenly you are earning your first US$100, then your first US$300 and before you even realise it you are earning US$1,000+ per month...
...Shortly after that you are starting to put pen to paper and writing that "Dear Boss" letter...
How would an extra US$2,000 per week passively earned change your situation and your life?.
If you keep working for someone else for a salary, no matter how big or small you will never have the freedom to enjoy life.
Never!
The most critical and crucial factor in your success is to be willing to "suffer now" by working for free on your own business and building that solid foundation for your business.
Suffer now and live the rest of your life in freedom!.
It really is your choice.
The ball's in your court, what is it to be?
Tied to a job for the of your life 8 hours per day 5 day a week for goodness knows how many years as the best years of your life passes you by?....or freedom?
It's your choice!.
How I Make Money Online
Affiliate Marketing is my Number 1 recommended way for making money in the digital world both for those just starting out and those that are semi experienced.
The reasons are pretty simple:
- No huge startup costs!
- No Selling face to face!
- No Stock to keep or manage!
- No huge investment involved - (Get started with a FREE TRIAL!)
- No networking or recruiting required.
- You can operate in any market you wish! - even your hobbies & passions!
- Earn a full time income & more!. No limit to your earning potential!.
In fact...
I have created and built a regular mid 4 figure passive monthly income and fully enjoy a life of travel to where I want and when I want. With no boss to answer to and zero annoying co-workers I completely enjoy life and work when I choose to.
This is all thanks to Affiliate Marketing!
To emulate what I have achieved, real freedom and a passive income stream, click that red button below..and watch the video that I have prepared for you.
