If you are looking to make money online or from home, you have likely come across both affiliate marketing and multi level marketing (MLM).
But what’s the difference? And how do you find out what the best option for you is?
That is what this article will help you with.
I have myself previously been involved in MLM and I am now making a full-time income as an affiliate marketer. So I know quite a bit about the advantages and disadvantages of each of these business models.
This article will show you affiliate marketing vs MLM and show you all about what you need to consider before getting involved in either method so you can find the right option for YOU!
So let’s get started.
Can you actually make money with MLM and affiliate marketing?
Let’s start with an important question you might have before even looking into choosing MLM or affiliate marketing as a way to make money – and that is if it is even possible to make money like this.
And the short answer is – yes!
It definitely is possible to make money with both business models and it is even possible to make really good money as well. And both ways of making money are legal which, of course, is also very important.
Which method is the best for you depends on several things and this article will help you clarify this so you can find the option that fits you the best.
Just be aware that neither affiliate marketing nor multi level marketing are ways to get rich overnight. Getting rich quickly and without effort is one of the big myths of making money online.
No matter your chosen method, it will require you to make an effort and put in some time and patience. This is important to know before starting so you go into it with the right expectations.
What is affiliate marketing?
Affiliate marketing has become a very popular way to make money online.
It can be compared to word-of-mouth marketing where you tell someone about a product or service you like and recommend. If that person then ends up buying it, you get a commission for it.
With affiliate marketing you can, however, do this on a very big scale as it takes place online and you, therefore, can have the whole world as your potential market.
There are three parts in affiliate marketing – you (the affiliate marketer), the vendor (the product owner), the buyer (the person you recommend a product to).
You are in a way a middle man/woman that connects the potential buyer with the right product/service for him/her, and then the owner/seller of that product or service will pay you a commission for this.
You can choose more or less any topic and create online content about it. By providing valuable content and advice, you will then earn commissions when people end up following your recommendations.
This is explained very shortly but if you want to know even more details, you can check out my beginners’ guide to affiliate marketing or watch the short video below.
Pros of affiliate marketing:
- Anyone can start:
One great aspect of affiliate marketing is that you can learn it even if you are a complete beginner.
- You can work with a topic your are passionate about:
You can find products to promote in more or less all niches which means you can choose a topic you are passionate about and that way make money working with your passion.
- You do not have to own or invent a product:
You do not need to invent your own product or have a storage for products. You will just be the middle man/woman that will connect buyer and seller for the benefit of all.
- Has huge earning potential
Once you get rolling, affiliate marketing has a very big earning potential.
- Most affiliate programs are free to join.
- Selling is not necessary:
When affiliate marketing is done right, you do not have to do a lot of selling. It will instead be about focusing on helping people with good advice.
Cons of affiliate marketing:
- Can be a challenge to build up an audience:
It can take time and patience to build up an audience and driving traffic to the offers you promote.
- You need to come up with a niche idea:
There are thousands of possible niches to choose from, but you need to come up with the idea and focus on a specific topic. This can be a challenge if you are a complete beginner, but luckily there are many great training programs about this.
What is Multi Level Marketing?
Multi Level Marketing (MLM) is often also known as network marketing.
It is a marketing strategy where a company gets ordinary people like you and me to sell their products for them and pay them a commission for it.
In addition to these commissions for the sales, you can also recruit other people to become sellers and build a downline of sellers below you, where you will earn a commission for all the sales they make as well.
The really good money in MLM systems come when you have a lot of people in your downline which can eventually turn into a lot of passive income. Often you are encouraged to sell to friends and family members and also recruit these.
But you can also sell and recruit people online.
Is MLM the same as a pyramid scheme?
There is an important distinction between MLM and a pyramid scheme. MLM is a legal business method whereas pyramid schemes are not.
Sometimes it can be hard to tell the difference. But the main difference is that with MLM you have an actual product to sell.
In a pyramid scheme, the focus will be on recruiting new people – sometimes there will not even be a product and the only way you earn is by recruiting others.
You can also watch the video below for more info about the difference between MLM and a pyramid scheme.
Pros of MLM:
- If you are good at recruiting you can eventually earn good passive income.
- You can usually work from anywhere.
- If you have a big network, you can quickly get started.
Cons of MLM:
- If you do not like selling it will be difficult to succeed.
- You might annoy your friends:
This is actually one of the things I realized is a big issue after having been a part of an MLM myself. Often you are encouraged to recruit friends and family and sell to them. This means that you risk seeing even your friends and family as someone you need to sell to. This can become very annoying for both you and them. This is something I have seen often with people invoiced in MLM.
- It can be difficult to find a reputable MLM company with a good product.
- The cost of starting can be high as you might need to invest in some products yourself (depending on the program).
What’s the difference?
The above gives you an overview of what MLM vs affiliate marketing is.
But I just want to sum up some of the main differences that are important for you to find the right option for you.
Difference #1 – Start up cost
One of the big difference can be the cost of getting started. You can get started with affiliate marketing for a very small cost. To get the best chance of success, it would be a good idea to invest in a bit of training and some basic tools/ a website.
But all this can be kept below $400 (or cheaper) for you entire first year. And most affiliate programs you can earn commissions from will be free to join.
So it is very cheap to get started compared to almost all other kinds of business.
MLM does not always have a high cost. But in some cases you have to invest in some quite expensive products yourself before you can recruit others as well.
This is not always the case with MLM, but something to look into before you choose a program.
Difference #2 – The topic you can choose
I think one of the HUGE benefits of affiliate marketing is that you can choose to work with more or less any topic. This means you can work with what you are passionate about.
Almost no matter what topic you want to work with, there will be opportunities as an affiliate.
When it comes to MLM, it can be difficult to find a good reputable company that also has products you can genuinely recommend and want to sell.
So it limits it compared to affiliate marketing.
Difference #3 – Recruiting vs no recruiting
To earn really good money with MLM, you need to recruit other people to sell the products. Personally, this is not really something I like but that is a matter of personal preferences.
If you do not like to recruit people, you earning potential with MLM will be limited. With affiliate marketing, this will not limit you.
Just be aware that there are some programs that say they are affiliate programs, but in reality they are build more like pyramid schemes and the only real way to earn is by recruiting other people.
But if you join the legit affiliate programs, you do not have to recruit other people to promote the same product/service to be able to make good money.
Difference #4 – Selling vs not selling
If you are not good at selling, it will be hard to succeed with MLM.
That is not necessarily the case with affiliate marketing. If done right, you can focus on helping people with valuable content, building relationships with people and building an audience like this.
This way it is actually possible to make really good money without having to sell.
How to choose the best option?
Whether affiliate marketing or MLM is the best solution for you comes down to personal preferences.
Personally, I think affiliate marketing is by far the better option because everyone can start, you can freely choose a topic, you do not have to recruit, the starting cost is very low, and you do not have to focus on selling but can make money by helping people with valuable information.
As mentioned earlier, I was involved in MLM for a little while when I was younger. I liked the product, but I realized that I really did not like the method of recruiting and selling.
Affiliate marketing gives so many more benefits, in my opinion. But as mentioned, you might have different preferences.
No matter what, I hope this article has helped you get a good overview of multi level marketing and affiliate marketing, the differences, so you can now decide what the best option for you is.
If you have any comments, questions, or have any experiences with MLM or affiliate marketing yourself, I would love to hear from you in a comment below.