Multi-level marketing vs Affiliate Marketing.

Affiliate Marketing vs MLM

Since you found this site, I’m going to take a good guess and say that you’ve either just heard about affiliate marketing and want to know how it compares to multi-level marketing.Well I’m going to tell you about both in a minute and help you decide which one is right for you. I’ve been involved in both types of marketing so I know how they work. 

What is Multi-Level Marketing?

Multi-Level Marketing (MLM) is also called network marketing because it involves getting other people to build a team in order to promote a product. The more levels you build (downlines) helps you sell more products and you’re awarded higher bonuses as your team grows.

In this set up, there is usually someone at the top (where it’s much more rewarding) and if you haven’t personally signed anyone up, then you’re at the bottom where the rewards would be very little. People often refer to MLM as pyramid schemes although that really refers to companies that don’t have a legitimate product but rather use their revenue (from registrations) to reward top tier members.

What Is Affiliate Marketing?

Affiliate marketing involves three parties – the merchant or store, the affiliate and a customer. Affiliate marketing is where the affiliate sends the customer to the merchant and is awarded an agreed percentage of the sale (commission) when the customer makes a purchase.

This can happen infinite amount of times and there are a number of different ways you can set up the process. One common way is to create a website and offer value in the form of reviews or content the visitor may be interested in.There is no team building and you can do this from anywhere in the world.

Affiliate Marketing vs. Multi-Level Marketing

With affiliate marketing you can decide what you want to sell while with MLM you can only sell whatever the product(s) from the company you’re involved with. Of course, you can always join more than one MLM companies but it would just dilute your efforts of recruiting prospects.

In affiliate marketing, you’re in control of every aspect of your business and your income does not depend on how many people you recruit but rather the volume of your sales.

I started my first MLM experience with herbalife and then Amway when I was studying in Australia. I was kinda desperate back then, as I needed the money to pay my cost of living and school fees. I first got involve with Herbalife though a Gumtree ads and the gumtree ads wrote:

"Looking for people who can speak multiple languages to sell health products"

I kinda got interested in it and I was directed to one of the herbalife's office at Sydney Olympic Park. They kinda tell me all about how many successful people they have and how great their weight loss product was. After that, I was told to go and sign up for a fee to become a member and sell their products. 

I do admit that their protein supplement do indeed taste great but I was still find their whole business model kinda sketchy and barely make much sense. 

Here are the following examples:

1) Pitching your products to your friends and family

Conclusion: This is one thing I know I will fail to do in Australia as I do not have anyone close nor do I have any real friends. Another thing, I am very skeptical was what happen when you ran out of friends, neighbour and family to pitch your product to ? You are going to run out of business.

2) Signing people up to earn commission:

Conclusion: I find it very weird and fishy about this. The purpose of starting a business is to sell your product as a niche and to a wide population. However, I am starting to sense something similar to a pyramid scheme. Over time, I find out that MLM is just nothing but a glorified pyramid scheme with you starting at the bottom earning barely anything while the uplines earn their commission off you by signing you up. I discovered Amway after an unknown person from Malaysia tried to friend me and ask me if I want a job working in a office in Sydney. I was kinda delighted at first but I realised that once again, it is another MLM when I met his friend, a single woman in her 40s who was 'kind' enough to buy me a latte while trying to present me how great Amway toothpaste is and honestly, I can barely figure out the differences. She brought her nephew along and show me another product which is a vegetable washing liquids. He could not convince me. So if you cannot convince someone, you confuse them ;).

They kinda just ask me to come to some of the seminar and most of the time, I don't find them making much sense. It makes me wonder how can you do business by signing up new members who can become your competitor ? 

I kinda fall into the "fool me once, shame on you, fool me twice, shame on me"I believe there are some out there who find success in MLM but I am definitely not one of them.

Then I read up about Affiliate MArketing in the library. When I found affiliate marketing, I was very excited at how easy it was to get going (no registration fees) and start profiting. However, if you are not a IT savvy person, you might find many of the things you learn to be kinda technical. I can assure you that the first 6 months can be a big learning curve as you need to build traffic, blogs, websites, find a niche and various website that you can be an affiliate with. So I realise that I do need a mentor to guide me. I tried to attend Imran Md Ali's seminar and review classes, Winston Yap and Adam Khoo webinar to accelerate my learning.

I do admit that many aspect of affiliate marketing kinda make sense. In Affiliate marketing the whole entire world is your audience and you are not just restricted to just selling stuff to family, friends, relatives and neighbours. Honestly, I hate using my family and friends as cash cows and I believe the real proper business model should be selling your stuff outside your circle and a good niche product attract customers, not the other way round. 

Many people are more comfortable buying things off the INTERNET with  a click of a button. If people are interested in whatever products, they will be more than happy to be directed to the online store to purchase the products from. In Affiliate marketing, the customers come to you. 

Of course, it depends on what kind of product you are promoting. Physical product tend to bring in less commission due to the labour cost, resources and shipment cost poured into the product. Electronic products such as E-books and online courses tend to give out very generous amount of commssion with some as high as 80% on Clickbank.com !!

Anyway, I will show you some real simple newbie guide on how to profit from Affiliate Marketing.