A lot of people can’t really distinguish between what affiliate marketing is vs MLM but in this post I’m going to do that and explain 5 reasons why building your business on one model is better than the other.
This is going to be a post where I’m going to appear pretty biased towards affiliate marketing and against MLM because with all the stuff I’ve learned over the years on both businesses, I keep seeing more and more points that keep pushing me more and more towards affiliate marketing and recommending you start your business there.
Here are the 5 reasons why affiliate marketing is a better choice vs MLM:
1) There’s more legitimate ways to do affiliate marketing than MLM.
2) With MLM programs, there is far more brainwashing involved.
3) It’s tougher to sell MLM opportunities in general (costs, bans, and more).
4) Promoting affiliate marketing products is usually easier than MLM products.
5) It’s overall easier to succeed with affiliate marketing than it is with MLM program.
Now for any MLM fan out there reading this right now and getting mad at me, hold off on that criticism because I want to first explain my points of view and why I said these 5 things.
They do require a lot more context and so I’ll break them down for you in a moment. But first:
Let’s quickly look at how affiliate marketing and MLM is similar:
The only major 2 similarities here is that:
1) Both business models involve promoting something and getting a cut or commission for the sale.
Whether it’s a product, service or program that is being promoted, it doesn’t matter whether it belongs to an MLM program or is just a regular affiliate promotion, it’s still basically the same in that sense.
2) The other often used similarity is that whether you’re making an affiliate or MLM business, your odds of success are low.
People often like to cite the old “90% failure” rule and it’s sort of true, but there’s more reasons why people than just “it’s just the odds” and for instance, here is a list of mistakes affiliate marketers make.
In my experience, this is what most people know about both business models, but they often can’t differentiate the differences and often make the mistake of conflating the 2. And so:
Let’s quickly look at how affiliate marketing and MLM is different:
1) The biggest difference is that with affiliate marketing promotions there is no downline:
This means if I promote something to someone and they buy it, I only get a commission from that person and that’s where the money ends (unless it’s recurring commission model, which happens to be a great way to make a passive income in affiliate marketing).
2) With MLM promotions, there are downlines:
Meaning that if I promote the MLM to someone and their sign up, I can make something from that and if that person gets others in, I can also get a cut from that next downline.
Some MLMs have numerous downlines and I’d argue that the more downlines there are, the more of a pyramid scheme it could end up being (but we’ll get to that later).
Now with this simple explanation, an MLM might seem more profitable and appealing, but I argue that this is a trap many people get caught in and when I get into the details of the reasons why, you’ll see what I mean.
An example that explains the differences between affiliate marketing and MLM:
This example only applies to promoting programs to people (not products). So with that said:
For affiliate marketing:
If I’m promoting a program like Wealthy Affiliate (which is not an MLM), I only get paid for each referral that joins and that’s where it stops. If my referrals get their own referrals into the Wealthy Affiliate program, I don’t make a penny from that. In other words:
If I’m promoting an MLM program, I’m recruiting people into it and:
- For every person that joins through me directly (level 1 downline), I get paid.
- But if they bring in referrals (level 2 downline).
- And those referrals bring in their own referrals (level 3 downline),
I can see residual income every single level (or as long as the downline continues and compensates me). In other words:
Now that I’ve explained the similarities and differences and given more context, let’s get into the 5 reasons I’m sticking to affiliate marketing and not MLM (and recommending you do too):
1) Why there’s more legitimate ways to do affiliate marketing than MLM:
Here’s a short list of legitimate and questionable ways of doing affiliate marketing (2 legit and 2 not legit):
1) Promoting market value products to people (legitimate).
2) Promoting programs and services for fair market value to people (legitimate).
3) Promoting high ticket info products (very questionable and often this is a scam).
4) Promoting programs that are only self promotional (this can be a pyramid scheme).
So for anyone thinking that I’m only fanboying for affiliate marketing, think again. I call out the scams when I see them.
Here’s a short list of legitimate and questionable ways of doing MLM (1 legit and 3 not legit):
1) Promoting market value products that the MLM actually makes to people (legitimate).
This method of making money is actually called network marketing, but there’s an MLM attached to many network marketing companies which is why if the MLM actually makes products and they aren’t a rip off in price, then they’re legitimate.
2) Promoting network marketing products that are way beyond market value, and then pitching an MLM to it (illegitimate in my opinion).
3) Promoting an MLM where there are no products, only the recruitment (this is illegitimate and a pyramid scheme).
4) There are MLM programs that are affiliated with network marketing companies, but are separate entities and people who join the MLM think that the program “has products”, but it doesn’t (I also consider this an illigimate MLM opportunity).
Now whether you choose to promote a legitimate or illegitimate affiliate or MLM opportunity, they can be both done the same ways:
- Through blogging.
- Through YouTube affiliate marketing.
- Through pay per click ads.
- Through social media networks.
- And so on.
In my experience though, it’s a question of what’s being promoted on the back end and I personally choose to stick to promoting legitimate affiliate marketing products and programs and you can certainly say that’s subjective, but I’ve been an affiliate marketing for a long time, so I like to think I can distinguish the ethical ways of doing affiliate marketing vs the not so ethical options.
2) With MLM programs, there is far more brainwashing involved:
MLM programs are in my opinion often pitched as the Trojan Horse to “your” success.
You’re shown the opportunity, the amazing successes, people being happy and “part of some movement”. All that cheesy stuff is originally synomomous with MLM opportunities.
In my opinion, brainwashing happens in both businesses, but the cult type stuff and the masses are much more entrenched in the MLM world than they are in the affiliate marketing world.
And if you want to see that cult act now, just start asking questions about it and boy will you get some serious backlash.
- You’re going to be told you don’t want to be successful.
- You’ll be told you’re clueless and don’t know what you’re talking about.
- You’ll be told by people that “they know someone who makes so and so” or they themselves “make so and so” and this somehow legitimizes the MLM.
Nothing but ad hominem attacks really is what you get when you start questioning MLM programs.
But make no mistake, brainwashing does happen in affiliate marketing too:
Most notably with high ticket programs.
In my opinion wherever people are emotionally brainwashed to believe that they’ll make a lot of money, you’ll see the biggest tribalism to protect that way of thinking. I just happen to think it happens more often with MLM programs than affiliate marketing opportunities.
3) It’s generally tougher to sell people MLM opportunities than affiliate marketing opportunities:
Whether you’re a fan of MLM or not, one thing that is hard to deny (especially if you already have that experience) is that it’s tougher to pitch an MLM program in many places than an affiliate marketing program.
In my experience, here are the places where you’ll run into a lot of trouble pitching an MLM:
1) Google Ads. Odds are your ad won’t get approved because it’s associated with a scheme or some sort that is flagged with this network.
2) YouTube Ads. Same reason as Google Ads.
3) Facebook Ads. Same reasons.
4) Forums. You’ll likely get kicked out of it.
5) Friends and family. Worst. Idea. Ever (unless you want to break up with a friend or family member).
Add on top of all of this the stigma that MLMs have and you’re already making it tougher to sell it.
Now if you’re trying to pitch an affiliate marketing opportunity, it can sometimes sound similar in the whole “I’ve got an opportunity for you” department”. But it really is different because I already explained the differences.
If I’m pitching a legitimate affiliate opportunity like Wealthy Affiliate, here’s how I’d do it:
“Hey Wealthy Affiliate is a program that’ll teach you to make an online business in something you are truly passionate about. You don’t have to recruit anyone if you don’t want to, but you can promote any product on the internet to help people and make good money that way.”
If it’s a bad affiliate opportunity, then this is how it might sound:
“Hey, you have to try this amazing program that pays you $500, $1,000 per sale! All you have to do is invest $5,000, then use their training to get 2 or more people in and boom, you are in profit! It’s the easiest opportunity ever!”
If I’m pitching an MLM opportunity, this is how it may sound:
“So hey I’m making a lot of money with this awesome new MLM program. If you join, and bring 2 people in, then they bring 2 more, you can make a lot of money. Oh and I see that look on your face, it’s not a pyramid scheme, I swear!”
In all cases, I’m telling the truth about the program but the most familiar one to people would be the MLM one. MLMs just have such a bad widespread reputation, that from the get go, it’s just too difficult to sell. If you want to see an example of an MLM, see my review of the 1090 Method for reference.
4) Affiliate marketing products are easier to sell than MLMs products are:
I have 2 reasons that I’m saying this:
1) With affiliate marketing, I don’t have to recruit people. I can set up a simple business promoting niche products to people and making commissions off that.
I can set up a blog site selling chinchilla products (this evergreen niche idea comes from this article on 10 affiliate marketing niches I wrote about).
And these products I promote are products from Amazon (fair market price). People who own chinchillas or plan to buy products from that site who click on my links to visit the Amazon page don’t even raise a single eyebrow that they’re clicking on my affiliate links.
2) Most MLM programs that do have products to sell (network marketing) are generally so much more expensive that it’s just a tougher thing for most people to buy.
As a general affiliate marketer, I can sell some anti aging cream for $10 as an Amazon affiliate, 1,000 times a month and earn $1,000 a month in commissions.
With an MLM who sells these kinds of products, I’m looking at $300 for a similar anti aging cream (but decorated with fancy words to make it sound like it’s worth $300) that pays me $50 for each sale. Good luck making even 10 sales a month for that!
5) It’s just easier to see success with affiliate marketing than it is MLM:
The 4 reasons above put together should be enough to make this case already, but if you still don’t believe me and want to get involved with an MLM program, all I can say is, choose carefully and pick one that is actually legitimate.
Remember, I listed 4 different types of MLMs you can run into and in my opinion, only 1 is legitimate.
But one last pitch I’m going to make is to consider a lesson I learned about business and this is not just related to affiliate marketing, but succeeding in business overall:
Find a niche you love which is in demand and build a business out of it. Let’s take a simple example:
1) Bob loves scuba diving or mountain biking (some specific niche basically).
Through affiliate marketing, Bob has limitless promotions he can pitch through a blog, YouTube channel and more, pitching products in either niche and in doing so can live that dream and build that online business.
2) With an MLM program, Bob is much more likely to get sucked into the black hole of promises in making money and trying to endlessly recruit people through the sleaziest of tactics which ruin friendships, relationships and more and instead of channeling that passion he has for those 2 niches, he instead goes the route of chasing money, in a niche he doesn’t even like, but convincing himself that this is the way because he’s been brainwashed to believe it is.
Too often, people who want to build legitimate affiliates or online businesses end up going the second route that Bob is going in and yes, this can happen with bad affiliate marketing opportunities too, but with MLM, it’s more common.
In short, Bob has a better chance at living a better life that is full of profit with affiliate marketing than he is with MLM and I’d argue, so too are you. And if I’ve done enough convincing of that and this is the direction you feel is right for you, then Wealthy Affiliate (which is not an MLM) is where you’ll learn to do that.
Last questions addressing affiliate marketing vs MLM:
Is MLM better than affiliate marketing?
No in my opinion it is better to get involved in affiliate marketing instead of MLM.
Why is affiliate marketing better than MLM?
Because with affiliate marketing you can promote legitimate opportunities, products and create businesses in your niche. With MLM you are often engaged in highly self promotional and suspect programs that can be pyramid schemes.
What is multi-level affiliate marketing?
It is just affiliate marketing via promoting an MLM opportunity.
Have anymore questions about affiliate marketing or MLM? Ask below!