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 online and link to products using affiliate links. I've been doing this full time for many years now, and I LOVE doing it.
How does it work? For example, you could make a website about the drones. You'd publish an article about the top 10 drones of 2020, then link to Amazon visitors can buy your #1 choice.
Amazon pays you a percentage of the sale, and that's how you make money.
There are thousands of companies which will pay you to do this, including brands you know like Walmart, Nike, Blue Apron, REI. Many small companies you haven't heard of do this too!
Note: I do not need to convince any friends or family to join my drone selling business!
Now that I make over $100,000 per year doing what I do I see a lot of the differences between MLM and affiliate marketing. I truly think that most people would be better off starting an affiliate business rather than an MLM one.
The MAIN reason is that most of us are not built like salespeople. Most of us do not enjoy cold calling. We don't like trying to convince other people to buy stuff. We like working independently, rather than trying to lead a team.
Plus, it really sucks having to try to make money off of your family and friends to start your business.
Even in the online world, the majority of network marketers start off by contacting people they know on Facebook or Instagram!
I see a lot of people spinning their wheels trying sell some overpriced dehydrated mushroom coffee or evangelizing essential oil as 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 more 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 like Facebook, but the members 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.
I sent some messages to my entire address book (including the friends I hadn't talked to for many years) telling them about this “amazing” business opportunity. Not a single person signed up and, and I even got a few angry responses.
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 sales…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.
Have you ever heard of “garage qualified”? It's a special term for people who buy so much of their products to qualify for team status that they fill their garage with their own products.
My advice is to ditch all this MLM stuff and start building a business that:
- you can talk about any topic you want
- you can sell any product you want
- you can be 100% online (no parties!)
- doesn't involve recruiting team members
- doesn't require any membership fees or auto-ship
- 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 MLM-ers out there. 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 a downline with a downline. Your downline needs a team, and their downline needs a down too.
You know, the multi-level part of MLM. If all you do is sell products, you'll never make enough money to quit your job.
So how do you build a successful network marketing business?
Because most people start off with zero experience in direct sales, they instinctively turn to friends and family to jumpstart their business.
They throw ‘parties’ to display and demonstrate the products.
These parties are basically just guilt-tripping your friends into helping you, and this is not a sustainable way to run a business.
Who Makes Money In Affiliate Marketing?
Affiliate websites are all over the place. Every time you search on the web, you run into people and companies making money from affiliate marketing
Instead of limiting your promotions to a small circle of people you know, with affiliate marketing, you can market your products to the entire world.
Have you ever heard of The Wire Cutter? It's one of the biggest tech blogs in the world. Started by just one guy, then bought out by the New York Times for millions.
Here's a very simple article they wrote about cooking with kids.
In the screenshot below, you can see that the recommend multiple affiliate products from Amazon. The beauty of recommending products in this way is that only the people who want to cook with their kids will see this!
You don't have to call up all your friends with kids and try to convince them to teach their kids how to cook.
Publish the article, then next time someone who already wants to cook with their kids searches in Google, they'll see the Wired.com article, click a link, and purchase a recommended product.
See how the buyer actually wants the stuff before they even come into contact with you? This is a lot more chill than having to cold call folks.
So to answer the question, the people who make money in affiliate marketing are the one who write interesting articles and recommend good products.
Can you write an article? Good!
Do you like helping people find good products for a good price? Good!
You can be successful at affiliate marketing.
The Cost Of Joining an MLM Company
If you joined an MLM before, did you ever calculate how much money you were spending versus how much you made?
Two of the main costs associated with running a network marketing business are membership fees and requirements to keep your active status.
Not all MLMs charge fees to join, but many do. A lot of the time you'll get some kind of a starter kit which includes some products. “Active status” fees could be a monthly cost of maintaining your level within the team.
The active status fees are a huge issue. It costs network marketers hundreds of dollars per month to buy products on auto-ship in order to be eligible for level status or bonus incentives.
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.
What's the cost of a party? Snacks, decorations, entertainment, demo products…
You have to sell products just to break even!
The Cost Of Doing Affiliate Marketing
~ Affiliate marketing is free ~
It's 100% free to join affiliate programs. You just need to pay for your website ($14) and hosting ($30). That's it.
Affiliate companies are happy to work with affiliate marketers because you're essentially a freelance advertiser. You do the work on your own time, and you get paid on commission.
They've got hundreds, or thousands of affiliates around the world building websites to help them make sales!
How Is Affiliate Marketing Different From Multi-Level Marketing?
After my stint in MLM, I learned how to do affiliate marketing.
Here's a side note. I get a lot of haters on this blog. I get nasty comments daily from MLM people saying that I'm just talking trash and that I'm just butthurt because I failed in MLM.
Or maybe I tried it, saw how it worked, and didn't like it.
If you like MLM, great. Go for it! close the tab and bye Felicia.
But I know that I'm not alone. I know that there are a lot of folks out there who are just a little bit creeped out by MLMs and they just need the information to confirm that their suspicion was correct.
So to be clear, here's how affiliate marketing is different from MLM:
- no recruiting
- no pitching to family or friends
- no cold calling/emailing
- no hard sales pitch
- no fees
- no gimmicky pink Cadillacs
- pick your own products
- help people
- earn a lot of money
- build an online business
There are literally thousands of famous (and not famous) companies with affiliate programs for you to join. Think of any type of product. There is a way that you can sell it online through affiliate marketing 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.
Multi-Level Versus Single-Level & The Truth About Work Ethic
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. You can make a lot of freakin' money with MLM. The trick is, you need a good team to do it.
You can't get rich in MLM without a high quality team of motivated individuals. In my experience, 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 don't have a good work ethic.
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. I just have a better work ethic than most.
Since you're researching how to build a business, I suspect that you have a good work ethic too. How many of your friends have similar goals of starting a business and working for themselves? Probably not many.
I like working for myself and counting on myself to get the job done. I have full control over the outcome. 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.
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.
Affiliate marketing is perfect for hard working, rugged individualists.
The Future Of Affiliate Marketing Online
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. Teenagers don't give a sh*t about essential oils.
As people start connecting their watches, cars, and even sunglasses to the internet, sales of products is going to be the norm. Have you ever heard of an MLM that sells awesome sunglasses or smart watch apps?
No. Because MLMs are behind the curve. They're still selling protein shakes and weight loss wraps.
Will MLMs exist in the future? Yes. Will it be a growth industry? No.
The earlier you get in on this gig called affiliate marketing, the more time you’ll have to get a foothold in any industry you choose. Golf. Health. Travel. Fitness. Virtual reality. Homesteading. Pets. Dating advice. More.
Now is the best time to start your online affiliate business.
What's really motivating is that you can eventually sell your affiliate website for 40x monthly earnings, so an affiliate website earning $10,000/month could sell for about $400,000.
Affiliate marketing has a realistic exit strategy baked into the business model. A medium-sized affiliate website could be your ticket to early retirement.
Have you ever heard of anyone selling their MLM 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. Since then, I've taken three of them to earn more than six figures per year.
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.
Start with 10 free beginner lessons on the next page. Totally free. No credit card required.
In these prove affiliate training lessons you'll do a couple amazing things.
- learn how affiliate marketing works (in more detail)
- figure out your website topic (with help)
- build your first affiliate website (totally free)
- talk to me (real person, not a bot)
- decide if affiliate marketing is for you
You are here. You want to have a side hustle. You want to build a business. You want to make money online. You are ready.
You just have to be willing to risk a bit of time and see if affiliate marketing is for you. I'm stoked to help you get started.
Are you ready to take action? Or do you still have your eyes on that pink Cadillac?
Great article! After reading this closely and carefully I really believe this is the way forward for me, I’ve always wanted to be in control of my own finances instead of relying on anyone else, I’m totally new to this stuff but fully committed to making the change, thanks!
Your article about MLM is not balanced. It’s a shame that though you appear well meaning you may have ended up misleading people.
While i do agree that so many people fail in MLM, I think the fact is greatly misrepresented. Do you know how many people start a business and fail. It is understood that 85% of businesses fail in the first 3 years of starting. Yet a lot of people know starting a business is still a great way of securing their financial future.
The fact is most people sadly will fail in anything that requires perseverance and any kind of skill and would blame others for their failure. It is possible they were mis-sold and sometimes there are unscrupulous people.
Now to Affiliate marketing, unlike the impression you have created, Affiliate Marketing is not as simple as you put it. It requires so many skills that most people under estimate.
1. Copy writing
2. Niche selection
3, Traffic (paid or Organic)
4. Email Marketing
5. Google changes
7. Customer Support
And like MLM only a few people really make enough this is why there are loads of people selling courses.
Guys and ladies please note there is no business that is easy. It requires skills, perseverance and the ability to change your paradigm about easy riches and really get ready for the long haul.
Please before you choose any business either Affiliate Marketing, MLM, Ecommerce or any other, do take time to review your skills and where you want to go.
And lastly kindly note every outcome in life is a reflection of ourselves, our skills, our mentality, our paradigms how hard we work, and how valuable we become to our marketplace. Afterall money always flows in the direction of value provided. It does not matter which business model you choose as long as its not illegal.
As for pyramid schemes, society sadly has several pyramid schemes that we are all conditioned to accept without questioning.
All the best.
It was never about “how many people fail” versus how many people succeed. It’s about how many people make money doing something they feel good about, and is ethical. There are plentyof people who make incredible money with MLM, but what damage do they leave in their wake? At whose expense are they making money?
If your team is large, and you’re earning passive income, what about their downline? Can they make that same amount of money without growing a team? No. They need a team. Then what about their downline? Same. They need a team too.
With MLM you aren’t just selling products. You’re selling the team incentive and the income incentive as a reason to join. Not everyone can succeed in network marketing because failure is built into the system. If everyone who joined was ABLE to succeed, there everyone would need the ability to grow their team to a good size, and then the pyramid impolodes.
Affiliate marketing is different. It stops at the product sale. You can make excellent money promoting PRODUCTS ONLY. I can sell hundreds of thousands of products. I can be the ONLY seller of the product and no one I sell to has to then start their own team selling their own product. They get what they want. End of story.
Even me, someone who earns money teaching people how to build websites and sell stuff… the people I teach sell their own unique products. I can promote software subscriptions, but someone I mentor could sell pet products. On the off-chance that person wants to teach people how to build affiliate websites too (unlikely!), then the person they teach might sell computer hardware. Different from both of us!
With affiliate marketing everyone can succeed in their own niche. With MLM, everyone is competing for the same pie.