Are you confused whether to join MLM or affiliate marketing? You are not alone. This article will reveal the information you need for both.
MLM and Affiliate Marketing are the two most popular business models for making money and deciding which option to go for can be challenging. Here is the in-depth comparison of multi – level marketing vs affiliate marketing to help you decide.
What is MLM and what is the difference between MLM and Affiliate Marketing? What are the pros and cons of each business model? And why do you need to choose Affiliate Marketing over Multi-Level Marketing?
What Is Multi Level Marketing?
Commonly called MLM, this business model relies on team building as a way of earning money. It utilizes salespeople who are referred to as consultants or independent distributors whose payment is based on commission.
Basically, a company has a product and recruits salespeople or consultants to sell. Each of these recruits recommends their MLM company to other people who also becomes consultants under them and the process goes on and on.
If for instance you had a product and recruited three people, and they recruit three each, and the nine recruits on the third level recruits three and so on, you would end up with a big team.
That is just an example and is not as easily done as it is said. You might end up recruiting people who are not able to recruit others.
Sometimes you might not even be able to recruit anyone.
How To Make Money With MLM
There are three main sources of income from the MLM business model:
a) Direct Sales
Directly selling the product allows one to make money from the commissions. A consultant can buy products from the company at a reduced price and resell them where they earn a commission on each sale. That means that the more sales you make, the more money you can make.
You will need to be good at recommending your products to potential customers. Most Multi Level Marketing Companies require consultants to make a certain number of sales per month in order to qualify for commission from their downlines
Venturing into this business will, therefore, mean a considerable level of commitment.
It is quite challenging to accomplish sales, and therefore, your best bet will be recruiting other people under you. You earn a commission from the purchases of each of the people under you, and consequently, the more you recruit, the more you will make.
There is a need to train and encourage the people you recruit to sign up more people under them.
There are two kinds of potential people to recruit:
· Warm prospects include friends and family as they can be easier to recruit because of the relationship you already have
· Cold prospects are made of the other people you make contact with and are harder to recruit
c) Residual Income
Several network marketing companies allow you to earn a residual income once you rise up the ranks.
Once you have a certain number of recruits under you in the system, you are promoted and have a monthly income besides the commissions.
Is Multi-Level Marketing a Pyramid Scheme?
Most people often wonder if MLM is a scam. Most pyramid schemes have no product while the legitimate MLM companies have actual products which make them legal.
Pyramid schemes are businesses where the only way of earning an income is through recruiting people.
However, there is a high number of pyramid schemes masquerading as MLM companies
The Pros And Cons Of MLM
A. The Pros
· If you join early and grow your sales tree, you will earn more
· Highly rewarding if you are skilled at selling to people ideas and products
· A source of passive income once established and if your recruits do not quit (which can be very unpredictable)
· Allows working from home
· No need for experience to start and can be started from scratch
B. The Cons of Multi-Level Marketing
· Has a high start-up cost as you will need to purchase a starter kit that may cost up to hundreds or thousands of dollars (depending on the company you join)
· Monthly costs due to membership fees or having to buy the product yourself
Most MLM is done face to face making it difficult to make money unless you have time to go and meet people. That is why most people entering the MLM business ends up promoting their business to their family and friends.
You are told that you are creating your own business But in reality, you do not own it. If the company closes own, you lose everything which includes your downline
· Having to recruit can be challenging if you are not good at pitching ideas
· The products are more expensive in comparison to similar products online and therefore harder to promote
· Finding a reputable MLM company and avoiding pyramid schemes in disguise is challenging
· Sponsors are not always good mentors which means that you might not succeed due to lack of proper guidance.
Now let’s talk about Affiliate marketing:
This is where a commission is earned when a visitor follows a link from your website and does make a purchase on the site of the merchant.
The number one reason why Affiliate Marketing is better than MLM is that is that you are in full control of how you market and you can Promote as many products as you wish and the products can be from different companies.
You are the complete owner of your business and the products you promote are generally free to promote.
However, the merchant’s site has to have an affiliate program where the marketer signs up with and receives a unique ID which will track the traffic the marketer sends to them. Countless established companies have affiliate programs, including:
As you can see, search engines finds the customers for you. All you need to do is make recommendations of the products online, and when the customer clicks on the link, it takes them to the merchant’s website, and when they buy the product(s) you earn. There are neither sponsors nor downlines.
The best way to use this model is to use your existing website or social media presence to recommend the products and linking with the affiliate partner.
In case you are starting out, you can easily set everything up and start earning if you do it right, from setting up a website to signing up with an affiliate program.
How Do You Earn?
It is easier to earn using this business model. As you can see, it involves less effort, and earnings are more direct. The only parties involved in the business are the merchants, you as the Affiliate Marketer and the Customer. The sources of income in this model are:
In Affiliate Marketing, the primary source of money is through the commission when customers buy a product, subscribe to a service or any other action on the affiliate partner’s website. The commission is on the form of one of the following:
-A percentage of the product price with affiliate programs paying up to 75% on some items
-A flat fee in some programs where every successful sale earns a certain constant amount
b) Passive Income
Besides the commissions, you can also make a Passive income in some affiliate programs. Once you are established, you can be assured of a consistent monthly earning besides the commission.
c) Referral Program
In some cases, there are referral programs that allow you to earn by referring people to the affiliate program.
You do this online meaning that you do not need to approach people individually.
The best thing with Affiliate referral program is that ones you join a program, the company you join will teach you how to market not only their products but other companies’ products.
How to Do Affiliate Marketing The Right Way
i. The Right Niche
Choosing the right industry in which to start your business can determine the success you get. Most of the time, you may need to go for an industry that you love, something about which you are passionate.
It will be easier to have influence and therefore drive up traffic when you do what you love. The niche also needs to have enough competition to ensure the products you market are on demand while not being too competitive.
There is Affiliate program for almost anything you can think of; whether it is something to do with your passion, hobby, skills, literally anything
Examples of Affiliate Programs include
1. TRAVEL AFFILIATE PROGRAM
examples of travel companies offering Affiliate Programs are
- TripAdvisor and
2. FITNESS AFFILIATE PROGRAMS eg Life Fitness
3. FINANCE AND CREDIT CARD AFFILIATE PROGRAMS
4. FASHION AFFILIATE PROGRAMS
5. BEAUTY AND MAKEUP AFFILIATE PROGRAMS
6.GAMING AFFILIATE PROGRAMS
7. MUSIC AFFILIATE PROGRAMS
8. SPORTS AFFILIATE PROGRAMS
ii. The Right Affiliate Program
One of the most critical factors is finding the right affiliate program. When you do it right, you will be able to receive higher commissions.
A. The Pros of Affiliate Marketing
· Low to no start-up costs unless you want to buy your own domain name. In Most Affiliate Marketing companies, you will have access to free domain names which you can transfer later to your own custom domains if you wish to
· Ability to market products from different businesses
· Less challenging as you do not ship any product or buy the products.
· You have the freedom to choose the products you want to promote
· Complete control of your business. You own the business and your website
· Unlimited potential to earn. You can be an Affiliate Marketer to as many Affiliate programs as you wish. You can also promote as many products as you wish
B. The Cons of Affiliate Marketing
· Finding a product/service to market may be challenging but ones you find the right program for you, the sky is the limit
· Time-consuming to drive enough traffic and may take some time to pick up but ones your business picks up, very rarely will it go down.
Other reasons Why Affiliate Marketing is Better than MLM are:
It is more costly to start and run multi-level marketing than affiliate marketing as you will need money to purchase a starter kit and pay a membership fee.
Additionally, some marketing plans will also require you to spend a certain amount of money on sales so as to earn commission from your downline. The overall result is that the return on investment is too low.
On the other hand, Affiliate Marketing allows you to start earning money online without spending any money. Currently, it is possible to set up a website and get the business started with zero dollars.
Although both businesses will require considerable effort to take them off the ground, Multi Level Marketing is more demanding. Recruiting is not as easy as some people will make you think.
In MLM, you might end up having broken relationships with your friends and family when you try to sign them up. Your earning will also be dependent on recruits’ potential.
In Affiliate Marketing, you will be able to earn more at a fraction of the effort. You only need to choose an Affiliate program on a Niche of your choice and with time, customers you don’t even know will find your products through the search engine like Google, Bing and Yahoo.
With Billions of people Searching the internet every day, all what you need is a small fraction of those people to become your customers. How good is that; having customers whom you don’t even know.
Affiliate Marketing gives you the time freedom you deserve as there is no face to face, delivering products or attending company meetings
If you are thinking of starting a business, you are most likely thinking about the freedom that comes with it.
However, that will only be a dream if you opt for MLM marketing. Your business is dependent on the company, and you are limited to their products and their policies.
However, you can enjoy the freedom when you opt for affiliate marketing. You can market products from whichever company you deem fit and you will be in full control of your business.
If the affiliate partner collapses, you will still be able to continue running your business, unlike if it were MLM.
I am not discouraging you from MLM, you might be good at it. All what I am giving you is my opinion having been in MLM before, so, you might want to join MLM to find out for yourself.
Some people make money in MLM but the Majority don’t. You might be among the ones who make money
Those who join the Multi – Level Marketing company early get all the benefits while those at the bottom barely make any earnings.
Contrary to this, affiliate marketing allows you to make your money fairly. Your earnings depend on your efforts.
That’s why you can make a living easily on Affiliate Marketing while it will be difficult to make a decent living on MLM.
Potential to Grow
Everyone wants to grow in their business. That might not be as possible in MLM as it is in affiliate marketing. That is because in MLM, you will never outgrow those above you and in case anything happens with the company, everyone loses.
Affiliate marketing has massive potential for growth as your influence grows independent of the affiliate program.
You can quickly get to a point where you also develop your products and list them on your website or on the sites with which you are affiliated.
If you are good at pitching ideas and products, multi-level marketing can work for you; however, the costs involved, dependency on recruitment and the company and several other limitations make it not the best option.
Affiliate marketing is the easier option to earn you more if done right. As you can see, it is the guaranteed path to earning significant money online.
However, if you want to succeed in Affiliate Marketing in any Niche, I have an online training for you.
The training will teach you everything you need to know about Affiliate Marketing which includes
How to choose a product within a niche of your choice
How to Build a website. To start affiliate Marketing, you need a website. This training will walk you through different themes depending on the niche of your interest
How to get traffic to your website with more emphasis to free traffic.
How to Market your products
What to look for when choosing an Affiliate Program to join
The company offering the training is a global company with members spread in 194 countries.
The company called Wealthy Affiliate.
The best thing is that, you can join as a starter member for free (without paying any penny or being asked for a credit card)
CLICK HERE to get free access to the training. No payment Required from you as a starter member
If you like the training, you will be able to choose whether you want to upgrade to Premium member where you will pay about $1 per day or less. You are also free to remain as a free member for as long as you wish.
Ones you are inside Wealthy Affiliate, you will find 2 types of Training Programs; “Bootcamp Training” and “the
Online Entrepreneur Certification (OEC)’’. I would suggest you Start with ‘’the Online Entrepreneur Certification (OEC)’’.
I am part of Wealthy Affiliate and I will be more than happy to guide you along.
Within Wealthy, you will be able to interact with other internet marketers from almost every industry you can think of.
CLICK HERE to get started immediately