Are you thinking about joining a multi-level marketing (MLM) business opportunity, but aren’t sure if it is right for you? Or are you looking for an explanation of the difference between MLM and affiliate marketing?
There are many people who join MLMs because they think it is a fantastic idea. They see all the luxurious lifestyles of those who have joined and made money on social media. To them, it seems like a simple decision to make.
Hold up a minute! Let me lay it down straight for you. At one point, I was thinking the same thing you are right now. You are at the point of deciding if an MLM (multi-level marketing) is right for you. I was so bent on joining an MLM, and I did because I thought it would be my business, my own time, and I could drink coffee out of my “lady boss” mug.
I still have my mug, but I sure lost a lot of money because I did not know what was involved with multi-level marketing, nor did I know the difference between MLM and Affiliate Marketing.
I fell into the trap that 99% fall into! Look at these stats.
Around 5,000,000 distributors work for Avon with an average revenue of $2,080 per distributor.
Amway has employed 3,000,000 distributors with an average revenue of $2,800 per distributor.
50% of Herbalife agents make less than $370 a year.
50% of people drop out of MLM within their first year.
About 99% of people who join multilevel-marketing companies lose money.
That’s right. If you join an MLM scheme, then you only have a 1% chance of not losing money. Not a 1% chance of getting rich. A 1% chance of not losing money.
I’m embarrassed to say, but that was me, an MLM member, not just once but a few times.
I lost money. A lot.
I hyped the programs to all my friends and family, hoping they would sign up too. I became a real pest.
I felt like a knucklehead to fall for these scams more than once.
After a while, I threw in my towel, accepted my defeat, and my empty wallet.
I don’t want you to go through that.
Being a lady boss is great. But now, I do it through my blog, that’s probably how you found me, and affiliate marketing.
I want to explain how MLMs really work first, then I’ll tell you about affiliate marketing. You will then be able to understand the difference between MLM and Affiliate Marketing.
How MLMs Work
You’re easily attracted to MLM because you see people flaunt their massive homes, multiple fancy cars, and heaps of cash. You believe them when they say earning 1,000’s of dollars per day with only 5 hours of investment a week is easy.
If truth be told, MLMs want you to join because you are a source of income for the company. The more money you spend, the more money they take home.
MLMs operate somewhat like a closed market, meaning the buying and the selling are happening between the independent distributors and the company. As a result, the distinction between the buyer and the seller becomes confusing. The seller becomes the buyer, and the buyer becomes the seller – to themselves and their families.
Basically, all the sales are happening among the company’s distributors.
Let’s cut to the chase; the only way to earn an income with an MLM is to recruit. There are not enough hours in the day to sell enough essential oils or protein shakes to earn a full-time income. YOU. MUST. RECRUIT.
And you must recruit a large team of players.
But it doesn’t stop at recruiting. Oh, no, you’ll have to keep them motivated, so they recruit other people, and then those people need to recruit people.
In theory, the more downline distributors you accumulate, the more money you will make.
Because recruiting is usually the only way you can make money working with an MLM. Don’t let anyone tell you any differently.
MLMs frequently run promotions and flash sales. All. Day. Every. Day.
Flash sales are enticing because the buyer feels a sense of urgency to buy because of the deep discount and limited-time offer. But unfortunately, this strategy is a perfect recipe for an impulse buy.
As you can see in this image, any reason, like the CEO’s birthday, is cause for a celebratory flash sale.
Your upline may pressure you not to miss out on such amazing deals. But in reality, they are only trying to get you to spend more money.
There is also demand by the company to meet a specified sales goal each month. You must meet this quota to qualify for income payout and bonuses. Many people would have trouble selling the number of products needed to meet their monthly goal.
So, what do they do to meet their goal if they fall short? They buy the products themselves with their own money.
Some MLMs have rules against their distributors buying products to meet their quota, but they make rules to be broken. Right?
Do I need to mention again that you are a source of income for the company? That’s right, straight from your pockets. YOU are their customer.
Now you can see why so many people get into debt and lose so much money with an MLM.
In my late twenties, I sold Avon. I usually only profited about $65 every two weeks. I gave every dollar earned back to Avon for products for products for myself or to give as gifts. I gave every dollar back to Avon for products for myself. This was my choice, and I am not blaming anyone.
The MLM Process
Let me Boil this Down for You and Clarify How the Process Works
Your Facebook friend, who you haven’t spoken to in 10 years, slides into your DMs or messages, “Hey girlfriend, I was thinking about you the other day, and I thought you would be perfect doing what I do.” “Want to join my team?” I only have a few spaces, so let me know as soon as possible.”
Do you think she sends the same message out to everyone? Probably so.
Below are a few sample text message scripts I found on Facebook to communicate with MLM prospects.
So, you decide to join an MLM
- You text all your friends and family, shouting from the rooftops about your new business opportunity. What happens next? They ghost you (don’t return your messages). Not one person is interested. Finally, your upline may step in when they see you getting discouraged. The conversation may start a little something like this. “What friends do you have that won’t support your business?
- Your next step is to join the MLM’s so-called training group on Facebook. Excited about all the upcoming products and promotions, you are over the moon. You can’t wait to get your hot little hands all over that merchandise. You think to yourself, “Am I the only one excited here?”
- Next, you try messaging all your social media connections. These are people you haven’t talked to in years. Some will message you back to tell you off or let you know they aren’t interested in your “pyramid Ponzi scheme.”
- But wait, someone just took the bait and wants to join your team! First, you jump for joy because your hard work has paid off. Then you realize you now have to compete against them. You’ve just made it a little harder for yourself.
- The monthly quotas are difficult to reach. Your stockpile of products aren’t selling because of its high pricing, and your friends can buy a product that is almost identical at half the price on Amazon. Remember all those products you bought during the flash sale? Yes, the ones taking up space in your closet. If you don’t unload those items before your credit card bill is due, you will be in hot water. But for a second, you felt better because you love those products. So you decide to give them as gifts and use them yourself. Now, if only you could figure out a way to pay for them.
- You’ve been spending a lot of money so far, and you aren’t making anything in return. You throw your hands up, wanting to quit. But your upline gives you the old canned speech about having to work much harder. You think this was supposed to be a piece of cake and simple enough to do in my spare time?
You Didn’t Work Hard Enough
Sometimes the people in your upline are bullies. Let’s talk about this.
MLM distributors will always rope you in by claiming you can work this “easy” business in your spare time.
It’s difficult and it will become a time-suck really fast.
An MLM distributor is a full-time sales, recruiting, and training job. So, even when you feel exhausted and have given the business everything you have, your upline has the same comeback. YOU. NEED. TO. WORK. HARDER.
I’ve seen it for myself when I was selling Avon. One of the “Inner Circle (prestigious level)” ladies went on and on about staying up all night working. Better yet, about if you only took one week off after the birth of your baby? Well, this gal is taking off one entire week. Let freedom ring!
Working so hard like those two people should make getting to the premiere level quickly. Really, the only way to get to the premiere level is to work 24/7 for many years.
As a distributor for an MLM, you are continually racking up expenditures for products, samples, brochures, business cards, training, travel expenses, parties, food, business software, and a Canva account, to name a few.
You can make it to the top, but you may lose your precious time and your money on the way up.
But, let’s say you are making money and turning a profit. You don’t own this business, so you are still at the mercy of the MLM.
Guess what could happen next?
The MLM could go bankrupt.
What Happens If the MLM Goes Bankrupt?
This can happen, and it will to a countless number of MLMs. Very often, they go bankrupt, close, or merge with another company. Worse yet, the FTC could shut the company down on suspicions of operating as a pyramid scheme.
Imagine working so hard to create a huge downline, earning a fantastic income, and then BOOM, the FTC, comes knocking. The time is up for your MLM, and they can no longer operate, and that goes the same for you.
AdvoCare was one such MLMs that was shut down by the FTC.
One of AdvoCare’s distributors had a 7 figure custom home built right before they shut the company down. She had to sell her beautiful one-of-a-kind home because her business vanished overnight.
This goes to show you that an MLM IS NOT your own business.
In 2020, Mary Kay ceased operations in Australia and New Zealand. Imagine how devastated their distributors were and possibly having nothing to fall back on.
Now, this brings me to the point of why I love affiliate marketing. I’ll show you the reasons how earning an income as an affiliate marker differs drastically from an MLM. So onward to discuss the difference between MLM and Affiliate Marketing.
How Affiliate Marketing Works
A simple definition of affiliate marketing is selling other people’s products or services for a commission.
Now, maybe you’re thinking, “But Madison, isn’t that what network marketing is?”
This is important to note that this is about the ONLY way MLMs (network marketing) and affiliate marketing are similar. But I am sure you have heard there is really no difference between MLM and Affiliate Marketing. After reading this blog, you will see why that is not true.
Basic 4-step process to affiliate marketing:
- You decide on a niche (a specialized audience, for example pet owners, runners, financial enthusiasts)
- You partner with affiliate programs that have products or services that fit that niche
- You get a domain name and start a website/blog or video channel
- You promote the product or service on your site or channel
When the person clicks on your affiliate link on your site, you earn income.
But you will not have to search for these people.
But, how do you get visitors to your website or channel?
Through keywords, your keywords will attract them like an expensive bottle of pheromones.
I’ll show you some examples.
Affiliate Marketing Example #1
First, I’ll show you a couple of examples from this site of mine, plus another one that I have.
Then I’ll show you an example from someone else.
If you go into Google and type in “Monat MLM Review,” this is what you’ll see at the top of the search engine (at the time of this writing. Take note rankings change frequently.
I am ranking #3 on Google’s search page. When people look up that term, they see my site in the third position. I am striving for the first place and I will get there.
Now, if someone clicks on that article and comes to my site, I can educate them on how I achieved success with affiliate marketing.
Are you thinking, “How do I make money this way, through my blog articles?”
Simply put, my goal for the site is to educate my readers with valuable resources, opinions, and reviews. Also, if a person joins one of my recommended affiliate programs using my link, then I earn a commission.
By the way, all the hot pink buttons throughout this article lead to my free affiliate marketing guide. I have tons more information about affiliate marketing.
I hope I offer valuable information to help you decide if one of my affiliate programs is for you.
Remember how I said that MLMs are NOT win-win?
Well, Affiliate marketing is!
When you give people the information they are looking for; you earn a commission when they purchase a product or service from your site.
A person who buys through an affiliate marketing link pays no more for the product.
Let me show you another example.
Affiliate Marketing Example #2
At the time of this writing, by typing “Matilda Jane MLM Review,” into the Google search bare, you’ll come to my website in the #3 position. It seems like 3 is my lucky number. I am super stoked about being in the #3 position. When you learn more about affiliate marketing, you will know why. You can see my website, Marmalade Monopoly listed.
I wanted to show you that with affiliate marketing, you can promote all kinds of different products.
You can click here to see what my website looks like.
On this site, I promote a marketing community membership platform, which has been a game-changer for my business. If someone enrolls on the membership platform, I earn a commission.
I promote products I believe in and stand behind. You will never find products on my website that I haven’t used or had personal experience with.
I hope the difference between MLM and Affiliate Marketing is more clear than before you started reading.
That’s it! That’s affiliate marketing wrapped up in a nice neat gift box.
Let’s look at one more example.
Affiliate Marketing Example #3
If you type in “dog house reviews” into Google search, you’ll see this at the top of Google (this site does not belong to me)
If you click on the first listing, you’ll see this person review different dog houses:
Clicking any of these links will take you to Amazon, where you can then buy the dog house.
If someone purchases a dog house through any of these links, the owner of this site earns a commission through Amazon’s affiliate program. You can see this website here to see what it looks like and how it works.
10 Reasons Affiliate Marketing is Better Than MLMs
I hope those examples showed you the endless opportunities that are available in the affiliate marketing industry. Especially, I hope you are more clear on the difference between MLM and Affiliate Marketing by now.
If you have a passion or an interest in a topic, odds are, there is an abundance of products you can earn income from through an affiliate program.
Why Do I Prefer Affiliate Marketing?
Let me count 10 of the many ways.
- Starter Kits, don’t need them
- No products or inventory to buy
- No recruiting and no downline
- Coincidentally, no upline either
- No training or motivating other people
- You don’t start over every month
- A buyer does not get charged extra to purchase through an affiliate link
- A countless number of affiliate programs
- Your niche can be what you are truly interested in and passionate about
- You can promote as many products as you like
The cherry on top is that the work you put in now can pay you repeatedly for many years to come.
You can publish a blog article today, and it still ranks in Google years later. You then continue to earn money from people who read the blog and make a purchase from something you wrote years ago.
Over time, your blog articles build up and multiply as well as your sales.
Just like a snowball. It keeps picking up more snow as it rolls down the hill.
Starting an Affiliate Marketing Business Takes Work
This process does not happen overnight. It takes a good amount of time and effort, but it will be worth it in the long run. I suggest focusing on an interest of yours and your affiliate marketing journey will be so enjoyable.
You can always go to Google, Bing, Yahoo, or YouTube to search for information on your own, but I highly recommend taking the quick route. The quick route or shortcut is to follow a proven step-by-step strategy.
Follow a Proven Step-by-Step Strategy
There are specific things you must know if you want to succeed in affiliate marketing. The good news is that you can follow a proven step-by-step strategy, just like these people did:
Remember, I mentioned finding info through search engines or YouTube? Don’t waste your time because they scattered the information all over the place in no order. You can, but trying to figure out how to put it all together on your own is overwhelming. I know because I attempted to do it myself. Unsuccessfully, I may add.
If you prefer an organized, easy step-by-step strategy to follow, I recommend looking at my free affiliate marketing guide.
I linked to my free affiliate marketing guide throughout this article. And I recommend looking at that if you want more information.
But if you’re just ready to get started, I’ll just send you to my favorite training platform HERE.
You can try it out free, no credit card is required.
I hope I’ve convinced you to ditch the MLMs and be a real lady boss with your own affiliate marketing business.
Go ahead, try it and see.
This one will be your own business, and you CAN do it in your own time without needing to work on it 24/7. Finally, drink your coffee from the “lady boss” mug.