The best way to help people is to share what you know and what you have experienced.
So that is exactly what I am doing here.
A lot of people don’t really know the difference between Affiliate marketing and MLM (Multi-Level Marketing) and what suits them the best. It is a very personal decision to make, depending on what your skills are and what you are comfortable with. I decided that I should shed a little bit of light on the matter, based on what I experienced and on the challenges I have met along the way.
If you’re looking to earn some additional income, affiliate marketing is an effective way to do so. Unfortunately, many people mistake affiliate marketing for multi-level marketing (MLM) or even pyramid schemes. This misconception prevents some from starting what could otherwise be an enjoyable and lucrative side business.
Unlike MLM businesses, most affiliate marketing programs are free to join and don’t require you to recruit anyone into a “network.” Understanding the differences between affiliate marketing and MLM can help you determine in which way they can actually result in a decent income, largely depending on the program you choose to join.
There is really not a better or worse, seeing that everyone has different comfort levels and strengths. The difficult part is to determine what you feel comfortable with and then the rest is just to get started and keep going… That, by far, is the most difficult part of it all.
I will try to explain how both strategies work, highlighting the key differences between them.
Affiliate Marketing and Multi-Level Marketing : What are the differences?
Multi-level marketing, also referred to as network marketing ( and sometimes wrongly as pyramid selling), is a strategy in which non-salaried participants promote and sell a product or service. The earnings are commission-based and derive from sales to end-users or to other distributors, whom the seller has recruited into their network.
This is where things become a bit tricky and where you need to be careful… Some of the MLM’s are structured in a way that mainly benefits those at the top of the hierarchy only. In that sense, they can be very similar to pyramid schemes. The big difference between the 2 though is that in an MLM you make a commission on product sales to customers, whereas pyramid schemes base their pay solely on network recruitment. Though MLM is not illegal, there is often a very thin line between them and pyramid schemes. That is the reason why one needs to be very careful and evaluate the program properly before joining. The similarities between the two also cause a very negative feeling surrounding them, whereby you will find some owners of programs calling other programs pyramid schemes, when they are actually not, just to encourage people to join the legal and obviously their program. It is not easy to distinguish and make the right decision, especially since a lot of MLM and pyramid schemes require you to put down an amount of money before you can actually become an active member and earn an income. One thing is for sure though, contrary to popular perception, it is possible to make money with MLM, especially with the programs which are still rather young and have been cleverly constructed in a way which allows members further down the network to make more money than the people who joined earlier. In a pyramid scheme, that would definitely not be possible. A pyramid scheme will also not really sell anything, you basically just pay to join, and when you recruit you get a portion of the money the newly recruited individual pays. The higher up the ladder, the more money you will earn as by default, you get paid for anyone joining at the bottom of your network.
In Affiliate marketing the way one earns is different. Here, participants choose which products they promote and earn a commission on every sale they make. The percentage that one can earn goes from a measly 1%, all the way up to close to 100%. This money is paid by the retailer or business to the affiliate for driving traffic, sales, or referrals. In most cases, there is no network recruiting involved.
Usually, there are no startup fees for joining an affiliate marketing program. As long as you have a method you will promoting the brands, you can begin doing so for free. Many people find this strategy very profitable, and the relationship is mutually beneficial for the company and individual affiliates.
What are some advantages of Affiliate Marketing ?
Hopefully, you now have an idea of the basic differences between these two strategies. Next, let’s take a look at three advantages of affiliate marketing .
1. The choice of products is completely in your hands
One of the benefits of affiliate marketing programs is that you are in charge of what products you are selling. The common mistake which a lot of affiliate marketers are making though is that they try to market any product which would give them a decent to big profit or products which have proven to be popular with other affiliate marketers. This often leads to a lack of direction. Take it this way, when you are a customer, you probably would buy from a store that specializes in what you are looking for. Somehow it is more comfortable to buy from an “expert” or leader in the field, rather than just any Tom, Dick or Harry… When you decide to start off your Affiliate marketing business ( yes, it is a business), you need to make your mark and build up credibility. That just makes it easier to build up a customer base ( people who trust you as a brand and specialist in his/her field) and in return will lead to more sales. My advise is to carefully select the products or brands that you will want yourself to be associated with. A good place to start is to promote those products which you are already passionate about or which you use yourself already. A lot of the stores or brands which have online presence have an affiliate program for which you can easily sign up for or request approval from to promote.
As a beginner, you can decide to do 2 things. You can pick a niche ( or category of products) which are very popular online, and will have a higher demand, or you can choose to pick less obvious products. The latter will have less competition with fellow affiliate marketers but on the flip side, there are less customers out there who will be looking for that product.
This means you have the opportunity to focus on products you are genuinely interested in and passionate about. When you choose items you’re familiar with and actually use, you’re able to help consumers make informed buying decisions.
Though it is completely up to you, my advice would be to start off with a product you are passionate about. Just like in any business, customers can sense very easily whether or not you have passion for the product and if you are knowledgeable. In case any of your customer will have question about the product, it will be very easy for you to give advice and in return you will build up a good reputation as a sales person. In fact, the more you will make the customer feel that you are doing them a favor by selling to them, rather than vice versa, the easier the sales will come to you.
Just to quickly compare, in any MLM, you will be restricted to sell the products which have already been shortlisted for you. In that case, you will have to choose which one of the products you don’t feel too uncomfortable selling.
2. Affiliate Marketing Start up costs are lower than MLM.
Almost all MLMs have membership fees and other startup costs, ranging from buying a starter kit of products to just a membership fee. These membership or product costs can go as high as $5000 or even more. This makes the more “High Ticket” programs, where there is potentially a lot of money to be made, out of reach of the starting online entrepreneur. Additional to that, most MLM’s only become really lucrative once you have recruited enough people in your network. That could take a period of time and is really not something that feels comfortable to all individuals. Granted, these days there are other, less personal, methods to recruit people than there were, say, 20 years ago, when a networker would typically become the least liked person in the family because they would be forever trying to recruit family and friends. These days there are Solo Ads, Social Media Ads or you can even outsource the task by paying people to put your landing page in front of their followers, but that comes at an additional cost. Needless to say that it usually takes a lot longer for a MLM-er to break even versus a Affiliate marketer.
Affiliate Marketers can make money from the first product they choose to promote, potentially earning the affiliate percentage from day one.
Our plugin is an all-in-one affiliate management platform that you can easily integrate with your WordPress site. Being able to use tools such as this one to start your own program speaks to the freedom and flexibility this marketing technique permits.
3. Complete control over the method of promotion of the products
Affiliate marketing programs work with tracking links which allocated the sales that are made to the affiliate who directed the customer to the product website. Most programs will warn against spamming as it affects their ratings. Other than that you are not really prevented from using any form of traffic generation, like websites or blogs, product reviews, social media, and videos, especially YouTube.
Contrary to a lot of MLM programs, where as a referrer you are expected to “work” with your downline and have regular interaction with them, affiliate marketing can be done in a more anonymous way.
Though there are similarities between the two, Affiliate marketing and MLM programs are very different. If you are a people’s person and you find it easy to “talk” to people, then you are definitely a match made in heaven for MLM. If you are a more behind-the-scenes type of person, you will find it easier and more comfortable to get started in Affiliate Marketing. Both have their advantages and their is definitely opportunity to explore both as you get more comfortable with your chosen route. The big earners in the Online Marketing industry actually have mastered a solid balance between the two.
Whichever route is more suitable for you and you feel you want to explore, it is important to stay focused, make a plan of action and reach out to other online marketers.
What you need to understand is that it will require dedication, discipline and hard work to get to a level where you will earn a decent income with these programs.
If you have any questions on the subject or you need a bit of guidance or help, please feel free to reach out to Victor@sir-vic.com .
Together we will all reach the top!