Affiliate Marketing vs Multi-Level Marketing

Well, I’m going to tell you the truth about both in a minute and help you decide which one is right for you to put your time and effort into. I’ve been involved in both types of marketing so I know how they work and the pros and cons between the two of them.

Since being involved in both Affiliate Marketing and Multi-Level Marketing, I am now only using Affiliate Marketing in my business as you will soon know why I only choose affiliate marketing in my business.

What is Affiliate Marketing?

Well, I’m going to tell you the truth about both in a minute and help you decide which one is right for you to put your time and effort into. I’ve been involved in both types of marketing so I know how they work and the pros and cons between the two of them.

Since being involved in both Affiliate Marketing and Multi-Level Marketing, I am now only using Affiliate Marketing in my business as you will soon know why I only choose affiliate marketing in my business.

What is Multi-Level Marketing?

With multi-level marketing, you essentially join a team of other MLMers to promote a product or service and earn commissions from. Everyone in the MLM network is attempting to promote the same product or service to earn commissions. In most cases, you will be recruited by someone who is already a part of the network and be on their team. A typical MLM network or program will look something like this:

mlm-scam

MLM’s look very close to pyramid schemes, and that’s because it’s almost the same thing. The only difference is that an MLM is keeping a fine line between being legal and being a scam. Over the years, there have been numerous MLM networks that have crossed the line from being legal to scamming people out of their hard-earned money.

One of the enormous differences of Affiliate Marketing and Multi-Level Marketing is that most MLM networks if not all MLM networks will make you pay to be a part of the company. If you don’t pay, then you can’t be a part of the business and you can’t earn commissions. Most MLM’s claim they have products, but this is because they have to stay legal.

From my experience, 99% of all MLM programs out there are borderline illegal. If you only promote the product or service in the network, you will hardly make any money at all if anything. That’s because you’re sitting at the bottom of the pyramid (not making anything). Not only are you at the bottom you will have to keep paying monthly or sometimes yearly fees to keep yourself in the team in order to earn commissions. The real money comes from recruiting others to promote the product or service for you. The more people you recruit, and the more people your recruited people recruit, the higher commissions you will earn on ALL sales. The money you make comes from the people below you in the pyramid.

Every month you pay your membership fee to be on the network will go to your sponsor (the person that got you into the MLM). This person will earn a portion and sometimes 90% or more of your payment you pay each month. I am sure you’re starting to get the big picture here. The earnings are coming from everyone below you and the more people you have under you, the more you earn. In order to make anything though you have to keep paying your membership to your sponsor and for those who don’t have anyone under them are just spending money each month.

multi-level-marketing-levels

Here’s a lie most MLMers will tell you: MLM is not a pyramid scheme because products are sold, and people get those products. Here’s the truth: The sale of products is in no way a protection from anti-pyramid scheme statutes or unfair trade practices that are set forth in federal and state laws. MLMs that sell useful and quality products have been successfully prosecuted many times under anti-pyramid scheme laws by state and federal officials.

Some MLM’s are a legal form of business, but only under certain rigid conditions set forth by the FTC and state Attorneys General. Many if not 99% of MLMs are currently in gross violation of these guidelines and operate because they haven’t been prosecuted yet. Recent court rulings are using a 70% rule to determine an MLM’s legality. At least 70% of all goods sold by the MLM company must be purchased by non-distributors. This standard would place most MLM companies outside the law. The largest of all MLMs acknowledges that only 18% of its sales are made to non-distributors, and that’s just wrong in my opinion.

Most Make Money Online and Work from Home MLM’s state that their membership fee each month is for products and services to learn how to make money online and work from home. The fact of the matter is that 100% of the time these so called products and services are or the lowest quality out there. I won’t call out names here, but I am sure some of you have heard of some of them. All the make money online MLM’s teach you is to get people to buy in under you. What they don’t do is give you real ways to get people into your team. No real paid traffic methods, no real training, no real anything?

Don’t get me wrong you can make loads of money in an MLM, but it all depends on what you already know and do online. If you join thinking you will be a millionaire overnight then you are mistaken. Someone is making millions, and it’s not you making money it’s most likely the person at the top of the pyramid telling you to keep paying your membership fee. They will say that money will soon come to you as long as you keep paying your membership fee. Crazy as that sounds it’s the truth.

Multi-level marketing is NOT quick or easy as most people in the network will state. Unless you have a lot of friends and family that are willing to basically work for you to make you money. It will take you a long time to recruit enough people under you so that you’re high enough on the pyramid to earn decent commissions.

What Does It All Mean? Key Takeaways

I am sure you can see just in this one article that Affiliate Marketing and Multi-Level Marketing are two business models that are on nothing alike. Some people that are in an MLM might try to trick you and tell you that Affiliate Marketing is a waste of time and to not go that route. They will tell you to just sign up to the network and join their team because you will make so much money you won’t know what to do with it. Don’t be fooled by people like this because you will most likely have to do as they do, scam and trick people to get in so that you can earn commissions.

In my honest opinion I think MLM’s are not a sustainable business model. In the past there have been many MLM networks where a lot of people where making great money, but then came the FTC and shut them down putting everyone in the network at risk having to pay back their earnings. Affiliate Marketing on the other hand is a true and sustainable business model. Not to mention it’s 100% legitimate business model.

Affiliate Marketing allows you to promote products you already use and love to like minded people who actually want to buy and use the products and services. When you understand the market in which you’re promoting your Affiliate Marketing to then you can almost print money on demand. Affiliate Marketing has changed my life in so many ways and I will never stop being an Affiliate.

To learn more about affiliate marketing please feel free to checkout these articles:

Thinking Outside The Box with Affiliate Marketing
http://scotthurtado.com/thinking-outside-box-affiliate-marketing/

7 Steps to Earning Money with Affiliate Marketing
http://scotthurtado.com/7-steps-earning-money-affiliate-marketing/

Build a Profitable Affiliate Marketing Business
http://scotthurtado.com/build-a-profitable-affiliate-marketing-business/

21 Tips On Starting An Affiliate Marketing Business
http://scotthurtado.com/21-tips-starting-affiliate-marketing-business/

Top 10 Reasons to Become an Affiliate Marketer Today
http://scotthurtado.com/top-10-reasons-become-affiliate-marketer-today/

New to Affiliate Marketing? 10 THINGS YOU NEED TO DO NOW!
http://scotthurtado.com/new-affiliate-marketing-10-things-need-now/

Make $5,000+ a Week with Affiliate Marketing
http://scotthurtado.com/make-5000-week-affiliate-marketing/

How does Affiliate Marketing Work?
http://scotthurtado.com/affiliate-marketing-explained/

In Summary…

You must come to understand that both Affiliate Marketing and Multi-Level Marketing can make you six figures or more a year. The major difference is that Multi-Level Marketing is borderline scamming people out of their hard earned money to try and make yourself money. If you get good at scamming people then you can make six figures a month. However, just because you make a lot of money doesn’t mean you will be happy doing it.

I say that if you want to try and earn money online do it so honestly and without an attempt to scam or trick others. What comes around goes around, and if you’re building a business by scamming people it will most likely come back to you. Even worse you might get yourself thrown into jail by ripping people off if you don’t go about things in an honest way.

Please share your thoughts below on what you think about Affiliate Marketing and Multi-Level Marketing. Thanks for reading and I will see you in the next article. 😉