The dirty secret of MLM is that the people who make money in MLM are the ones who have big teams. Doesn't matter what company. If you want to get rich, you gotta recruit people into the system.
There are many differences between MLM and affiliate marketing, but the main one is that with affiliate marketing, you don't need to do any recruiting, team building, outreach, or whatever you want to call it.
Personally, I hated that stuff back when I did MLM. Maybe some people have the personality for it, but for me, it just didn't work. I always cringed when I had to pitch someone a "business opportunity".
After a couple failed attempts at network marketing, I found something that worked for me. Basically, I publish articles and link to products using affiliate links.
For example, you can make a website about the drones, I'll publish an article about the top 10 drones of 2020, then link to Amazon so visitors can buy my #1 choice.
Note: I do not need to convince any friends or family to join my drone selling business.
Now I make over $100k/year doing what I do!
I see a lot of people spin their wheels trying sell some overpriced dehydrated mushroom coffee or convince their high school friends that selling essential oil blends is their ticket out of a 9 to 5 job.
Honestly, it's super frustrating. I hope my own story will help you get out of that cycle, but at the same time keep your dreams of building a business alive! It's totally possible to build a successful online business in just a few months.
You can work from home, increase your income, build up that retirement fund - all while doing something you LOVE... you just have to get out of the MLM cycle.
In this article, I'm going to explain the differences between MLM and affiliate marketing, and I'm confident that you're going to see why I made the switch, gave up on MLM, and started building my affiliate business back in 2010.
My Background With MLM
My first attempt at earning money online was an MLM company called People String. The sales pitch sounded pretty awesome. It was supposed to be a kind of Facebook where the users got paid.
The deal was that you needed to get other members onto the site so you could earn a percentage of what they earned. If they got someone to join, then you'd get a portion of that too. It sounded like a super easy way to make passive income.
So I sent some messages to my entire address book, including the friends I hadn't talked to for many years. Not a single person signed up and, as you might have guessed, I got a few angry responses. Embarrassing!
Just a short time later, the social network became defunct. Sound familiar? This story is not unique. In fact, it's what most people experience with MLM, network marketing, direct selling...whatever you want to call it.
Don't get me wrong. Some people do make a lot of money. Good for them! Most people don't though. In fact, some people even go into debt to fund their business, and I just think it's a horrible thing to ask people to do.
My advice is to ditch all this MLM stuff and start building a business that:
- can talk about any topic you want
- can sell any product you want
- can be 100% online (no parties!)
- doesn't involve recruiting team members
- doesn't require any membership fees or autoship
- allows you to create multiple streams of income from different companies
It's called affiliate marketing.
Who Actually Makes Money In MLM
Here's my main question to all you MLMers out there: If you are a building a downline, and your team is building a downline...who is actually buying the products? Look at the top earners. You know - the people with the Mary Kay pink Cadillac and the yearly trip to Mexico.
Are they making money selling products, or are they earning money because they have a big team?
It's pretty obvious that to reach the top levels of the company, you need to convince people to join the program. To grow their network, most new people will turn to friends and family.
They throw ‘parties’ to introduce the products to them. Aside from the obvious truth that these parties are just guilt-tripping your friends into buying stuff to jump-start your business, running a business this way is unsustainable.
Let’s be honest. How often is your sister really gonna buy something to support your business? Every month? I don't think so. Not unless that diet tea really works!
Car Bonuses + Other Prizes
A lot of times with MLM programs they have crazy incentives like free cars, vacations, or other non-money prizes. However, incentives like these usually come along with fine print! The most common trick I see is the ‘win a free car’ incentive, so let’s use that for an example.
The headline is simple: Make enough sales, and you can win a free BMW or Mercedes.
What the fine print actually says that the company only pays to lease the car, and if your sales drop below a threshold, they no longer pay the lease!
You could be left on the hook for hundreds of dollars per month because your performance slips temporarily. They may just give you a down payment, and then you're on the hook every month for the next decade.
The Cost Of Joining an MLM Company
Speaking of spending money, have you calculated the cost of joining one of these companies yet? Two of the main costs associated with running a network marketing business are membership fees and product sales to yourself.
Membership fees could be a monthly cost of maintaining your “level”, or a one time fee to upgrade to the next level. These can cost $100’s per month, or $1,000’s in one-time-fees.
On top of that, you may be required to buy products on auto-ship to be eligible for certain incentives or bonuses advertised.
All of these costs add up, and at the end of the day, your take-home paycheck is going to be money earned minus money spent. The high cost of running a network marketing company is why most individuals end up investing more money that they spend.
Plus, most people don't calculate that to throw these parties you also have to pay for snacks, decorations, and entertainment. That cuts directly into your profit.
- $100 Gross Profit
- -$30 Snacks & Decorations
- -$20 Product Demo
- -$39 Membership Fee
- -$19 Product Autoship
- = -$8.00
So you made a hundred bucks, but after costs you actually lost $8. This is obviously just an example, but it's extremely common to lose money this way if you don't track costs.
How Is Affiliate Marketing Different?
After my stint in MLM, I learned how to do affiliate marketing, and the first thing you should know is that it’s free. You do not have to pay a dime to be an affiliate marketer.
Companies like Amazon, Apple, GameStop, and Netflix are totally free to join as affiliates.
By joining their affiliate program, you essentially become a freelance advertiser for their company. There’s no cost to be an affiliate, and you get paid a straightforward commission for each sale you make.
There are literally thousands of famous (and not famous) companies with programs for you to join. Think of any type of product, and there is a way that you can sell it online, and make money.
The cool thing is that you don’t have to purchase or hold any inventory either. You just link to the website, and the vendor handles everything else, including customer service, payments, and refunds. You are in charge of advertising, and that’s it.
Next awesome thing: No recruiting! You don’t have to tell your friends or family about it. Actually, I started my first affiliate website under an anonymous name, and you can do the same.
In fact, you don’t have to ‘sell’ either.
What does that mean? All your leads are warm already. When someone searches Google for for "Is Vitamix a good juicer?", that means they are already interested in the Vitamix product. At the very least, they are interested in juicing.
Then they land on your website.
This is way different from you cold-calling strangers on the phone, or fat-shaming people on Facebook so they buy your weight loss body wraps. With an affiliate website, you are helping people who are already interested in what you're selling.
Multi-Level Versus Single-Level
One of the big criticisms I hear about affiliate marketing is that it does not leverage the multi-level commission tier of MLM, and is therefore less profitable.
This is actually true. I hate on MLM, but I do see that some folks make insane amounts of money with it. There are just so many aspects of MLM I disagree with, that morally, I can't bring myself to promote those types of products or convince people to join.
Despite the fact that there's no team to leverage in affiliate marketing, it's still pretty easy to earn six figures per year. Actually, I think affiliate marketing makes it easier to reach your financial goals.
In my opinion, it’s extremely hard to motivate other people. If you have ever been the leader of a team in any type of activity, you know that a lot of folks simply won’t do the work.
It’s impossible to earn good money without a good team. You may recruit 100 people to your business, but of all those people, how many will actually devote the time and energy to growing their own downline?
The answer is not many.
So for me, network marketing type of business model relies too heavily on things I can’t control! I’m totally dependent on other people being motivated and persistent. I just don’t have the leadership skills to run an efficient team.
I know that I can count on myself to get the work done. When it’s my butt on the line, I know that I can wake up early, go to bed late. I can give up TV, or work through the holidays, or spend my free learning how to grow my business.
Since there is no upline or sponsors in affiliate marketing, ultimately, I will reap 100% of the benefits of my efforts. Imagine that! I can give myself a raise any time I want just by working harder (or smarter). I may not be able to lead a team, but I’m a highly motivated individual and willing to work hard for myself.
So, let’s take a snapshot of what affiliate marketing looks like so far
- It’s free to join
- You can rely on yourself for results
- You reap 100% of the rewards of your effort
- You get to choose which products to promote
- You don’t have to sell anything to family or friends
The key to being successful in the business of affiliate marketing is getting your business online, and reaching people from all over the world.
There are over 2 billion people that use the internet every day, and that number grows every year.
In fact, of the people on the internet right now, only a small portion of them are shopping online. In the next few years, this number is going to EXPLODE as technology makes online shopping easier and easier.
Plus, think about how many teenagers right now are going to be getting their first credit card in just a year or two. As people start connecting their watches, cars, and even sunglasses to the internet, sales of products is going to be the norm.
The earlier you get in on this gig, the more time you’ll have to get a foothold in any industry you choose. Now is the best time to start your online affiliate business.
How To Get Your First Affiliate Business Online
I started out in 2010, so it's been almost a decade since I built my first website. I've started over 100 websites, and taken three of them to earning more than six figures per year.
What's even crazier, is that a six-figure earning business can sell for 40x monthly earnings, so a website earning $10,000/month in affiliate commissions could sell for about $400,000.
Or, on a smaller scale, a website earning just $1k/month could sell for $40k.
You just have to make a single, small, successful website per year and that's not a bad income at all!
Of course, I know you have your goals set higher than that. Some people in this business make $40 grand PER MONTH, so why settle for less?
Affiliate marketing isn't a get-rich-quick type of thing though. It takes a while to built up that income. You have to start with the basics, and grow and learn. The good thing about this model is that learning is very cheap. There's no autoship products stacking up in your garage so you can remain a "qualified seller".
I know this is all new to you, so here's the deal.
I've set up over 10 free training modules you can use to start your website, do keyword research, write articles that rank in Google, and start linking to affiliate products so you can get paid!
Those 10 lessons are just the beginning. They are 100% free (not credit card necessary), and you can even build your full website without paying a dime. Why is it free? I want to SHOW you exactly how everything works so you can be confident if you want to go further.
Ready to take action? Or do you still have your eyes on that pink Cadillac?