Having several years experience with multi level and affiliate marketing, I have fairly extensive knowledge of both business models. When you compare multi level marketing vs affiliate marketing, you quickly see that one is far superior to the other. Some people would say “That is your opinion”. Fair enough, but I believe I can make a pretty stong case to justify my opinion.
To make a fair comparisson, we need to start from a position of all things being equal. That is to say, people who have no prior experience and no advantages that are not accessale to everyone else.
Why Do People Get Involved With MLM Or Affiliate Marketing?
Some of the largest selling points of these business models are:
- Passive Income
- Low Start Up Cost
- Low Overhead
- No Experience Necessary
For myself and millions of other people, there is one simple answer.
The idea that you can earn money while you play, sleep or sit on a beach somewhere has universal appeal. Trading dollars for hours sucks unless you love what you do and earn a LOT of money doing it. Unfortunately, such jobs simply do not exist for the vast majority.
Many people silently hoped (or prayed) that something would come along to help them relieve them from the shackles of financial slavery. In 1991. I was introduced to my first MLM and it seemed to be exactly what I was looking for. After attending a few weekend long network marketing conventions, I saw tens of thousands of other people who where chasing that same dream.
When you see something like that, it’s easy to be convinced that what are involved in is legitimate and really works. What I could NOT know, was that we had booked our rooms on the top floor of a house of cards that was ready to come tumbling down!
MLM’s are still with us and probably will be for a long time to come but they will not create the number of millionaires they once did. The world has changed too much. MLM’s were a “ground floor opportunity” in the 70’s. Most people had never heard of them and there were not many options for people to start a business on a shoe string budget.
The internet has changed all of that. Today, there are more opportunities than there is time to take advantage of them all! The internet has done to MLM’s what cell phones have done to long distance companies. Do you remember the long distance rate wars?
Affiliate marketing has almost all of features that made MLM’s so appealing at one time while eliminating some of the biggest challenges. One thing to note is the fact that your chances of being successful with affiliate marketing is much higher than it is with MLM’s.
The Wave Of The Future
I heard people refer to multi level marketing as “The wave of the future” 25 years ago. I don’t believe they were intentionally lying. Who knew that in less than 10 years, the internet would come along and completely turn commerce on its head? Only the geeks who were developing it at that point I suppose.
The internet is still considered to be in its infancy and affiliate marketing is truly a ground floor opportunity.
Let me give you a quick example to compare affiliate marketing with MLM:
If your neighbor was in the same MLM as you without being in your downline, they were your direct competitor.
Now, every person in your neighborhood could own an affiliate marketing business yet nobody has to compete with anyone else! There are thousands and possibly millions of different niches and over 500 million products and services that can be sold through affiliate marketing. Yes, over 500 million! Plenty of business to go around.
Easy To Get Started
Launching a multi level marketing or an affiliate marketing business is easy. You don’t need licenses or permits, you don’t need specialized training and best of all, you don’t need a whole lot of money. This is what made these types of businesses accessible to the masses.
While both business models make it easy to “get in” the methods of building your business are quite different.
How To Build A Multi Level Marketing Business
- Buy Your Own Products
- Sell Those products To Others
- Recruit Sales People Into Your Network
- Teach Them To Use And Sell The Products
- Teach Them To Recruit More Sales People
- Repeat The Cycle
One of the things that made multi level marketing so appealing to me (at first) was the fact that I didn’t need to rely solely on personal sales. In fact, it was possible to make money simply by using your own products as long as you had a good sized network of people doing the same.
If you’re a person who can build mathematical structures in your head (I have always been able to do that) you can see how quickly an large organization can come together.
Let’s say you sponsor 6 people into your network.
Each one of them also sponsors 6 people adding 36 people to your network. Now your network has 42 people.
If those 36 sponsor 6, 216 more people are added to your network for a total of 258 people!
With a network that size, you can make some nice money (thousands per month) with everyone doing only personal volume. That should be a piece of cake I thought. 2 or 3 months tops. I was in for a rude awkening!
It turns out that the majority of people don’t see numbers intuitively. If you are actively showing the business plan to prospects (potential recruits) you may get 1 in 20 to sign up. Out of the one’s who do sign up, 1 in 20 MIGHT do something.
People sing up for the income potential. When they realize that there is work involved, they suddenly become comfortable where they are again.
Internet Killed The MLM Star
I really believed that the internet would revolutionize the way multi level marketing works. Unfortunately, many companies don’t seem to get it when it comes to internet marketing. I say that because many MLM’s have restrictions on how you market your business online.
They will offer you your own website when in fact, it is only one page on their own corporate website. It’s a cookie cutter page that doesn’t stand out in any way and it’s almost impossible to do any kind of SEO on these pages. They will not allow you to build your own third-party website to build your business. This is a mistake in my opinion.
Case in point:
I wrote a review on SFI and I also signed up since it was free. I wanted to run a test so I linked to SFI from my article using an affiliate link. Without even trying, I recruited around a dozen people into my network.
Of course, none of them have done anything. (Surprise, surprise!)
My point is, I was able to recruit more people by accident online than I ever could face to face pre-internet. This had nothing to do with my multi level marketing training. It had everything to do with my affiliate marketing training.
Ironically, the very skills that would make you successful in multi level marketing will make you far more successful with affiliate marketing.
With MLM’s, you have to convince people to buy overpriced products.
With affiliate marketing, you earn commissions when people buy things they actually want!
Plus, with affiliate marketing, there is no need to build a sales force of people. Every post on your website is a potential sales person. They work 24/7/365 and they don’t need constant motivation. They just work!
Whether we are talking multi level marketing or affiliate marketing, the keyword is marketing.
Multi level marketing is a concept whos’ time has come and gone. Affiliate marketing hasn’t even scratched the surface of what is possible! If you want to learn to market, you’re better off going with the latter.
What say you? I’d love to hear your thoughts on this in the comment section.