Affiliate Marketing vs. Multi-Level Marketing (MLM)

So you want to start a business, but you’re not sure which of these two models to go for. Here’s how to pick—and what you need to know.

Published Categorized as Marketing

So you’re here because you want to start your own business—and you’re considering affiliate marketing and multi-level marketing as your two (or one of your two) options.

There’s surprisingly little useful information about the difference between the two out there. So, as someone who started as out as a multi-level marketer and became affiliate marketer over time, I decided to share my thoughts on the topic in this post.

Between 2005 and 2010, I had a thriving downline in a multi-national MLM company. Then, I found out about blogging and niche websites, and, for one reason or another, content creation pulled me in. Slowly but surely, I transitioned my time (and revenue streams) to the web.

So you could say I’ve seen the best of both worlds.

If you and I were riding an elevator and you asked me about the difference between the two, I would tell you something like this:

In multi-level marketing, you sell a company’s products and recruit a downline of people to do the same, typically offline. Affiliate marketing is when you build an online audience and promote products to them, earning a commission whenever they buy.

Whereas MLM requires you to work mostly offline (calls, in-person meetings, or group seminars), affiliate marketing requires you to build an audience on an online platform (like a blog, YouTube channel, or email newsletter).

Now comes the first thing you need to ask yourself. Are you an extrovert who prefers the world offline—or a more introverted person who likes working on their phone and computer the whole day?

This should already give you a sense of which could be better for your situation. 

But that’s not all.

What Is Multi-Level Marketing?

Essentially, multi-level marketing is a business of direct sales and people leadership.

As a multi-level marketer, you will sell your network company’s products—and recruit others to do the same. As a result, you’ll earn a commission on not only the sales you make but also on those of the people you’ve brought in.

Think of multi-level marketing as a traditional business that’s as much about product sales (typically beauty, cosmetics, and supplements), as it is about recruiting, training, and coaching others to build your networked team, also called a “downline.”

Successful MLM is primarily about growth.

To make it in this type of business, you need to build a growing downline of recruits who keep selling products and recruiting others to the network (and so on, and so on, and so on).

If you’re the only person who does the sales and recruitment, your earnings are limited to the time and energy that you have available. But when you start building a team, your sales figures—and your team’s size—can grow exponentially.

Eventually, the market becomes saturated, and growth slows. From that moment on, you are confronted with two choices: you can try to grow a new downline in another city, country, or region, or you can join another MLM company and refocus the best people in your downline on building a new network on it.

I know a few people who got extremely rich by doing multi-level marketing.

But don’t be fooled: it took them years of work and many seminars across countries to get there, and their involvement came without a no-questions-asked, money-back guarantee.

The reality is that many who try MLM end up earning less than the average wages in their countries. In some cases, they’re even at a loss, as some network companies require you to purchase a minimum amount of products every month to keep your privileges.

An issue with multi-level marketing is that it has a bad reputation as a whole, which means it can be hard to find customers for your products and salespeople for your downline.

Most people will turn their heads the moment they hear the word “MLM” or “I want to tell you about a business opportunity.”

How can you get started?

You need to join the team of a sponsor (someone who’s already in the network). You probably know more people who are into MLM than you think already.

If you’re looking for my 2¢, post on Facebook or Instagram saying that you’re considering this type of business—and asking friends who are in it to reach out to you.

What Is Affiliate Marketing?

Affiliate marketers, on the other hand, don’t sell anything (at least not directly). They create content.

Think about that “Best Notepads for Travel” post that you came across this morning, or that review of Amazon Kindle Paperwhite you watched on YouTube, as you’ve been eyeing buying one for a while.

All of them contain long links to brands’ stores or online retailers like Amazon—and for a good reason.

Affiliates promote other people’s products or services on their websites and YouTube channels, and receive a commission when someone that they referred makes a purchase.

To succeed in affiliate marketing, you’re going to need an audience, whether that’s readers on a blog, viewers on a YouTube channel, or subscribers to an email newsletter.

And, to build one, you need to become a content creator.

There’s more than one way to become a content creator. Suppose you’re good at writing; you could start a blog or an email newsletter. If you’re anything but camera-shy, why not learn how to shoot, edit, and post videos on YouTube?

I’ll point you to the best courses for getting started in a minute or so. But, before I get there, I want to bust a few myths you’ll probably come across as you research the field.

Some influencers will tell you that affiliate marketing is “easy money” and “passive income.” Don’t listen. Sure, it helps them sell their courses, but it’s simply not true.

While your earnings will compound over time (publish a review post once, and organic visitors will keep organically coming to it), niche research, product testing, and review creation is as “active” of a business as they get.

Also, the days of writing reviews of products you’ve never tried are coming to an end. Until recently, it was possible to publish an entire review by rephrasing other people’s posts or citing what Amazon customers said about the product.

Since April 2021, Google introduced new guidelines for review posts and is actively de-ranking low-quality reviews from their search results.

So choose your topics wisely—you will need to be knowledgeable on them, and it will be best if you buy, test, and shoot photos or videos of the products you’re reviewing.

I wrote a whole post about the blogging courses actually worth your money. If you’re thinking of becoming an affiliate marketer, starting one of these courses is a great way to get started.

The Bottom Line

Whether you’re looking to get out of the rat race or make a little money on the side, there are plenty of options out there.

The first, multi-level marketing, has been around for almost a century. The second, affiliate marketing, has been around for a few decades—and was made possible primarily thanks to the Internet.

One thing’s for sure: both of them have their pros and cons. But which one is right for you?

So here’s how to choose.

When to choose multi-level marketing:

If you’re a people person who enjoys selling to family and friends as well as teaching others how to sell—or you’re simply good at influencing and leading others—multi-level marketing might be the right option for you.

It’s mostly an old-school business with physical products in the beauty, cosmetics, and supplement niches. And the path to success is pretty much laid out for you; you need to stay on the course and put in the work.

You will be spending your days talking to others face-to-face, coaching people in your downline, and hosting or speaking at live events aimed at driving sales and convincing recruits to hop onboard.

When to choose affiliate marketing:

Suppose you value working on your laptop or shooting videos at home over selling products to others and building a downline. In that case, affiliate marketing is most probably the better choice for you.

This is especially true if you’re digitally savvy and not afraid to use a tool like WordPress for powering your website, design Pinterest cover images on Canva now and then, or edit footage in Final Cut Pro for your next review video.

Image courtesy of DocuSign (via Unsplash)

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