MLM vs Affiliate Marketing

First of all, I would love to congratulate you for taking the valuable time out of your hectic day to conduct a thorough research on the topic "MLM vs Affiliate Marketing".

These two online business models have been punching each other hard in the face like two heavy weight boxers when it comes to making money online.

Multi-level marketing is infamous for its recruitment system to make money, the whole business structure is shaped as a pyramid.

It is quite frankly also the main reason why most people get it confused with an actual pyramid scheme.

Affiliate marketing on the other hand, is not like that. You don't need to "beg" your family members, close friends or even colleagues from work to try and join you just so you can make money off of them.

Aside from the fact that I found success with affiliate marketing, and not with multi-level marketing, I also think it is much more beginner's friendly. 


The Truth About Making Money Online

So, I am going to give it to you just the way you are supposed to have it, I am not going to sugarcoat any of this. It is time someone steps up and tell the truth.

And that someone is me.

I know what these fancy, Lamborghini driving, "know-it-all gurus" are telling you, try this, do that, and you will be making as much as I am.

Green Lamborghini

For the gurus who want to make it more believable, they will add an extra phrase or two that sounds something like this:

  • It's not easy but it's doable, make sure to follow my easy step-by-step program.
  • I started as a broke teenager, and if I can do it, so can you.

Those are not their exact words or what they're saying but most of them will tell you something similar just to grab your attention and buy you in.

And don't get me wrong, there are a lot of quality and legitimate programs out there that can teach you how to make money online but the amount of scams and fake gurus roaming around the same realm is substantially higher.

But here's the truth, whether you like it or not, making money online does not happen overnight nor will it happen any time soon.

Not even if you followed the "best" make money online program in the world.

Whether it's affiliate marketing or MLM, it doesn't really matter.

So if you are not ready to accept that, let me be the one to tell you to leave this online business idea out of your head, you're too immature for it anyway if those were your thoughts.


What Is Multi-Level Marketing (MLM)?

So, what exactly is multi-level marketing? If you never heard the name "MLM" before, maybe you've heard about network marketing, pyramid selling or even referral marketing.

They all mean the same thing.

Multi-level marketing is basically a marketing strategy used by MLM companies to make money. You make money through recruitment, so the more people you can drag along, the more money you can make.

The way the system runs is almost identical to a pyramid scheme but in legal form.

The only thing that keeps an MLM on legal ground is when it sells real legitimate products or services besides recruiting.

If it didn't have that, it would be a pyramid scheme in disguise.

With affiliate marketing, there is no element of illegal practice. Affiliate marketing is always legal and never a ponzi scheme or pyramid scheme.

Recruiting MLM

Here are some MLMs I have reviewed:


Here's How It Works

If you join an MLM company, there are two main ways for you to make money.

  • Purchase the company's products and sell them to your own customers.
  • Recruit as many people to join the company the same way you did.

I have tried MLMs before by the way, so I am speaking out of experience and out of the experiences of many people who followed the same path.

So, yes, it may be a bit unbiased because I am currently recommending affiliate marketing but there's a reason behind it.

First, let's talk about making money by "buying and selling" the products offered by the MLM company you're in.

You purchased the products on a wholesale price and you sell them your own clients on a retail price, and the difference in wholesale and retail price is your profit.

You are not allowed to sell any other products except of the ones offered by your MLM company, with affiliate marketing though, you can promote whatever product you can get your hands on.

You're not obligated to promote and sell products or services from one company only.

As long as there's an affiliate program available, it should be possible for you to promote and make commissions off of it.

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The second way to make money with any MLM company is by recruitment, this is also the main way or should I say, the "actual" way people who join MLM companies make money.

Because, let's be honest, it is going to be really really hard for you to sell generic products like face lotion, weight loss products, and anti-aging creams from a company that almost nobody knows about.

Why would they buy from you, and not from Amazon where most of the big brands are?

Once you start recruiting, you will be forming a team of your own.

Every time you successfully enrolled someone to your team, you will receive commissions when they make purchases or sell something.

The truth is, you will eventually run out of people you can ask to join. So your next destination will be the people that are online.

Can You Make Money With MLM?

Top of The MLM

As much as I hate to say it, the answer is yes. I hate to say it because some of you are so quick to determine whether or not it is a good idea just based on that question there.

Sure, you can make money with MLM, there are people who are making money with MLMs.

But what do they have to go through to achieve that kind of living? How much are they making? You need to factor in all of that, and not just whether it is possible to make money with MLM or not.

Because if you only go by that then you can make money with basically anything and everything, makes sense?

Personally, I have known hundreds of people who have tried MLM, myself included.

And out of all these people, I only know 2, literally 2 guys who are able to make some money with it. One of them is an old friend the other one is a distant relative.

They aren't making anything crazy if that's what you thought, they are making a couple hundreds a year.

So they might go months without making anything.

Is that really a reliable way to make a full-time income? Let alone an online one, I guess not.

Those who are actually making real money with this type of business are those on top of the "pyramid" AKA the founders or those who joined the MLM company in its earliest state.

So unless you are either one of those, you can work your butt off for years, and I can guarantee you the percentage you will successfully make enough to eventually call it a full-time income is 1%.

You might think that I am over-exaggerating the numbers but around 50% will quit within the first year, and up to 90% will leave within the next 5 years.


How Much Does It Cost To Get Started With An MLM?

Here comes the next question, how much does it cost to get started?

I have tried MLMs before and I have reviewed countless MLMs over the past 2 years, so I can tell you without wavering that it is not cheap.

However, there are some MLM companies that will let you join for free, so you don't need to pay any kind of entrance fee or something.

But even then, the entrance fee is just a very minor part of the total investment. You still need to purchase products from the company to make money.

And you have to keep buying it, every single month, that's how you keep your status active. 

What Is Affiliate Marketing?

The easiest way for me to explain to you what affiliate marketing is in a nutshell is by showing you an example. So here's an example for you:

Example: You are looking for the best budget phone in 2020, and you type that in on Google. And Google shows you an entire list of websites related to your search query.

The top searches of Google are usually the most clicked and most "accurate" ones based on Google's algorithm.

So, let's go with the first one, "Androidcentral.com".

The best budget phone in 2020

While on the website you will see all the different low budget phones you can get on a fairly cheap price. (see screenshot)

There will be some details about the phone, the pros and cons, etc. All of this is to help you get a better grasp of what you can get for the best performing phone while on a budget.

And once you see what you were looking for, there will be a link that goes directly to the website where you can purchase it from, in this case, it's Amazon.

Once you successfully purchased the product from Amazon, the owner of Androidcentral.com will receive a commission off of the phone you just bought.

That's how affiliate marketing works.

And keep in mind, this article is written once and updated maybe once every few months or never at all.

This is something millions of people type on Google every day, and even if it's only a small percentage that actually clicks on the link, and an even smaller percentage that actually buys the recommended product, it is still a lot of people, and you are still going to make money.

Google Pixel Affiliate Link

I hope you can see what kind of potential affiliate marketing has when it comes to making money online.

The owner of this website doesn't have one article on his website, he has hundreds and hundreds of articles that can make him/her money without him/her ever touching it again.

Unlike MLM, you don't have to keep asking people to join you (which can be extremely annoying) or use the internet with the help of SEO (search engine optimization) to find people that are interested in joining you.

Or try to buy and resell generic products to whoever you can find.


Recommended: FREE Affiliate Marketing Guide (Step-By-Step Instructions)


How a Full-Time Income With Affiliate Marketing Looks Like

Now that I got your undivided attention about affiliate marketing, what it is, and how it actually works, let's delve a little deeper into the potential it carries.

Going with the example of the screenshots from Androidcentral.com, let's do the math, and see how much the owner approximately makes from this one article alone.

I typed in the keyword "the best budget phone in 2020" on Jaaxy, a keyword research tool I use to determine how many monthly searches a specific keyword gets.

On Jaaxy it shows that this keyword gets around 450 monthly searches on average, and since the top 3 positions on page 1 of Google gets around 33%, that means this article gets around 148.5 searches a month for this keyword alone.

Jaaxy Screenshot

And with Amazon, the commission rate is actually quite low, for cellphones it is 1% commission if I am not mistaken. (it's absurd)

Worst case scenario, only 5% of the monthly searches are making a purchase, so only 7.4 people a month is going to buy the Google Pixel 3a which cost around $287.

So a 1% commission is like $2.87 per phone, 7.4 x $2.87 is $21. Just $21 for a whole month?!

You must think that's not a lot for 1 month, which is true, however, that's just from 1 keyword. And an article doesn't rank for 1 keyword only.

Check these screenshots out.

You can see that it is ranked for a different keyword here with 64 monthly searches.

Cheapest Android Phones in 2020

And another one here with 79 monthly searches.

You see, when an article like this starts to rank it gets ranked for a multitude of keywords.

Best Cheap Android Phones in 2020

That's the potential a single article has, people can literally make a full-time income with just 1 well written article.

Of course it doesn't happen very often but it definitely happens from time to time.

The more articles or posts a website has, the more chances it has for getting ranked for thousand and thousands of keywords.

Say this article ranks for 1000 keywords nad 1 keyword makes around $5-20. You can quite possibly make $5k-$20k which is pretty amazing full-time income.

With MLM, this type of income is only near possible to the founder or those early bird of the MLM company. Let that sink in.

Recommended: FREE Affiliate Marketing Guide (Step-By-Step Instructions)


1

The Difference Between MLM & Affiliate Marketing [#1]

The Potential!


The first "main difference" between MLM and affiliate marketing is the earning potential. I want to talk about this one first because I think it is the most important one.


MLM (Multi-level Marketing)

Like I said before, you can make money with multi-level marketing, there are people who are actually making a full-time income online with this.


Let's take a look at the bright side of this business, if you are able to pitch a lot of people, if you are an excellent salesman, you can probably make enough money with MLM.


Or if you joined the company when it was still fairly new, not even 1 year old, then there is also a higher probability for you to start building the first downline in the company.


The more people you have enrolled, the bigger your team is, the more you can make. So yea, making $10k or more a month is a possibility.


Now, let's look at it from a more realistic standpoint, how many people would you have to recruit and sell the "dream" to, to make that kind of money?


How many hours and sweat would you have to put on the table to achieve that kind of stability?


Honestly, I tried doing this for a few months, and the amount of money I invested into the MLM business is 90% higher than the actual profit.


The investment kept growing, and so was my profit but the rate at how much I had to invest into the business in order to grow, grew horrendously faster, that's when I decided to call it quits.


It just wasn't worth spending $100 for every $1 made, y'know what I mean?


Theoretically, it is possible to make $10k or even $20k a month with an MLM but realistically, how are you going to persuade or convince that many people to join you?


Unless you're a witch or a warlock, then it's not going to work.


Affiliate Marketing

Making money online with affiliate marketing is not just a doable business, it is actually quite miraculous if you know what you're doing. 


The only investment you need is a website, which cost around $12-14, and a web hosting which is around $25-$30.


So the total investment to get started with affiliate marketing is less than $100.


Compare that to any MLM company, it is a way cheaper and thus the better option or choice by a big margin.


A lot people are having doubts when it comes to how much you can make with affiliate marketing, I hope you at least have an idea after reading about my example from above.


Please NOTE! I didn't say affiliate marketing is easy or it is ten times easier than an MLM business.


No, both are hard, and achievable. What I am saying though is that the majority of people, myself included, did not find success with MLM, and it is also a much more expensive business to get into.


Anyway, you can make just as much with affiliate marketing as any other "amazing" MLM stories you've heard.


As a matter of fact, I think you can actually make a lot more with affiliate marketing than MLM, why?


Here's why, there's only two legitimate ways  you can make money with MLMs besides the bonuses and incentives. Those two ways are:

  • Sell as many products as possible and make money through retail profit.
  • Recruit as many people as you can, and grow a never ending downline.

With Affiliate marketing you can:

  • Build a website, and make money with affiliate links.
  • Place ads on your website.
  • Build multiple websites.
  • Sell websites for 20-40 times of what the website makes on a monthly basis.
  • Sponsored articles

I am pretty sure there are more legitimate ways people are making money with an affiliate website.


Recommended: Affiliate Marketing Tips From 17 Experts


2

The Difference Between MLM & Affiliate Marketing [#2]

The Effort 


The second "main difference" between MLM and affiliate marketing is the effort. I want to talk about the effort that is needed in order to succeed with both online businesses.


MLM (Multi-level Marketing)

Imagine this, asking colleagues, friends, and family members to join a company you never ever even made money with.


Even if they joined you, you will be making some money but what about them? They would need to ask other people, and those who joined through them would need to ask even more people, how would you feel by doing that?


Honestly, I felt disgusted and despicable.


You need to be able to build a very large team of your own if you want to make decent money with MLM. And if you were never great at being the leader, that's going to be ten times harder.


Because let's be honest, its about selling the "dream" if you are not good enough, charming enough, clear enough, your voice will not penetrate their mind, and you will not receive a follower.


I gotta admit, I am not that kind of leader, to manipulate or persuade others to do things. And I am sure the majority of people aren't either.


That's why you would need to put in so much work just to get someone to join you if you are a total newbie.


And once they decided to join you, that's just the beginning.


Affiliate Marketing

With affiliate marketing, you need to grind as well...maybe even harder. However, your effort will not go to waste.


With affiliate marketing, what you get is what you put in.


What I mean by that is, the more you grind, the more you hustle and try to follow the system you are learning from, the more you take action, the faster and more rewarding your results will be.


When I first started, I gained nothing in the first 3 months because I did absolutely bare minimum.


It's most likely because I was just getting off the MLM train, and didn't really have the motivation to give it my all.


Since I gave it my all during my MLM journey, and lost everything, it's hard to put your hopes up and try a new thing right away and give it your 100% y'know.


But once I started seeing results even with the little bit of work I was putting into my affiliate marketing business, that's when I started to shake off the MLM dust.


I said this in the beginning, I am not going to sugarcoat it and say that affiliate marketing is better in all aspects compared to MLM.


I am going to be as transparent as I can with you. 


If you follow the right affiliate marketing system and take action, I think it will take you at least 6 months to a year to be able to create a full-time income.


But treat your online business as a real business, and those 6 months will go by before you know it 🙂


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Advanced Strategy For MLM & Affiliate Marketing

Now that I have shown you more or less what the difference is between multi-level marketing and affiliate marketing.

Here's an advanced strategy you can use to super charge your affiliate marketing business or your MLM team building journey.

The strategy is by making proper use of SEO (Search Engine Optimization).

With SEO you can get articles ranked faster, and higher. In affiliate marketing SEO is one of the most important aspects.

But with MLM, you can make use of it the same way an affiliate marketer is using it for. Why limit yourself to face to face or mouth to mouth recruiting?

Use the internet to find people who are interested in your MLM company. Write an article targeting whatever it is you want to target and have it ranked on Google and give 4.57 billion people the chance to see it.

Here are 7 advanced SEO tips you can implement to get better rankings, regardless if you are doing affiliate marketing or MLM.

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My Final Advice To You

The last thing I would like to remind you is that regardless of which path you decided on, if it's a business, it is going to require time.

Affiliate marketing, however, is without a doubt the clear winner to me but if you can find a reason that's really important for you to try MLM, then by all means, do it.

But here are the obvious reasons why affiliate marketing comes on top:

  • Cheaper to start with.
  • Less complicated.
  • A much higher success rate.
  • You don't have to deal with customers or people for that matter.
  • You don't need to stack inventory.
  • Your results are directly proportional to your hustle (the harder you grind, the more you'll make).
  • Join as many affiliate programs you want (not just from one company)
  • Promote as many products as you want (not just from one company)

If you are ready to start your own online biz, and you want to learn everything from scratch, the best platform for that is Wealthy Affiliate.

I have been doing this for 3 years now, and with everything I have achieved up until now is all thanks to Wealthy Affiliate.

You can literally get started for free, just make an account, and start taking the first few lessons to get yourself acquainted.

Anyway, my plan was a short and very in-depth post about the differences between affiliate marketing and MLM, apparently it is a bit longer than expected.

If you enjoyed reading this or if you think there are some important stuff I didn't talk about enough when comparing these two online business models, feel free to let me know.

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About the author 

Kayin

Kayin is an online marketer that started his affiliate marketing journey with nothing but an old HP laptop and $100 in his credit card. He learned all the necessary skills to succeed in affiliate marketing by following the STEP-BY-STEP system from Wealthy Affiliate. You can find him inside the community exchanging internet marketing ideas and strategies.

  • I find your article very interesting. There is a way to make money in both MLM and Affiliate Marketing, but I too believe that affiliate marketing is a better option. Both ways takes time and effort; however, it seems it is more care intensive to make money with MLM as it involves building teams and trying to maintain motivation. Now, if you are willing to dabble in both, definitely try it…but I would recommend working more closely with affiliate marketing.

    • Hi Kelly,

      I couldn’t agree more. If you know you’re pretty good at selling (the art of persuading) then you might have a chance to make something with MLMs.

      But the question is why go through all that trouble of trying so hard to sell or build a team just to make a little bit of money? (unguaranteed)

      Why not try something that doesn’t require any of that, no heavy investment, no customer service, minimum people interactions, and much more likely to succeed. (guaranteed as long as you follow the right system).

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