Affiliate marketing vs MLM: Which One Is Best?
If you are just starting out your online journey to build a solid income for yourself and you have heard about affiliate marketing and MLM.
But you do not know what exactly it means and confused which option you should choose then you have come to the right place.
So, first let me clear one thing that you should go with affiliate marketing rather than MLM because you can only be successful with MLM when you have money to invest and you are really good as a salesperson whereas in affiliate marketing you can start completely for free and earn a good amount of money with it.
In this post I am going to further reveal why affiliate marketing is better than MLM.
Let’s get started
What Is Affiliate Marketing?
Affiliate marketing is a type of online marketing strategy or advertising model that assists a merchant (who is selling a product) in increasing sales or obtaining leads by utilising third-party publishers (affiliates).
Affiliates get a commission for marketing a product based on an incentive structure, just like a commission-only sales representative.
So, if you’re a publisher – an affiliate partner – a merchant who wants to advertise its products or services compensates you for the sales you produce, such as Amazon, which was the first to do so.
They were the ones who came up with the concept of an affiliate program, which allowed bloggers and website owners to sign up and offer links to Amazon products on their blogs or websites.
To summarise, an affiliate is a brand ambassador for the companies they promote, so your public image must be impeccable.
What Is MLM?
Multi-level marketing is a method of getting a company’s goods to customers. They use sales associates to distribute and sell their items instead of directly selling them to customers online or in brick-and-mortar locations.
Salespeople frequently work from home and buy products to sell at events in person or online. Instead of being considered workers, each sales representative owns their own company.
The capacity of each representative to recruit and train other representatives to start their own firm is referred to as the multi-level element.
As recruits make sales and recruit their own salespeople, each person above them earns a commission.
The two sources of income in MLM are commissions on personal sales and a portion of sales produced by other distributors you recruit.
Why Affiliate Marketing Is Better Than MLM?
Huge Variety Of Products Available
In affiliate marketing, you can choose products in any niche or category you want. You are not bound to limited products and you can choose from hundreds not even thousands of products available in the market that do have their affiliate program. Some of the top affiliate networks are Shareasale, Clickbank, jvzoo, digistore24 etc. Whereas In MLM you are bound to promote a limited number of products that are offered by the parent company.
Free To Join
In Affiliate marketing, you can join any of the affiliate programs for free. You do not have to pay them anything upfront. But in MLM you have to pay some initial amount to become an active member of the company.
Variety Of Promotional Methods
Affiliate marketers can promote their products by grabbing their affiliate link and putting it in front of the targeted audience. It can be done both ways organic and paid. But in MLM you have to focus on recruiting people so that you can increase your earnings. So you have to build more personal connections and need to do face to face interaction with the people to be a part of your team.
No Need To Meet The Minimum Sales Requirements
You do not have to meet any minimum sales requirements in affiliate marketing whereas in MLM to be able to earn money you have to meet the minimum requirements specified by the company you have chosen.
No Need To Buy Inventory
You do not need to buy any goods and service from the merchant in affiliate marketing but in mlm first you have to purchase the product at discounted price and then sell it to the customers.
You Do Not Have To Recruit Anyone
In affiliate marketing you are the only person who is responsible for any sales and not bound to recruit anyone but MLM main purpose is to build a chain by recruiting people and then earning some amount of commission from the recruits.
Who Should Choose MLM?
Multi-level marketing, often known as network marketing, is still a very profitable and popular business model.
They are now exposed to significantly more rules and oversight than they were previously.
If you are good at selling and interested in such a type of business model then “yes” this is for you.
Today, they are much more legitimate and ethical.
An MLM business, like any other, demands consistent hard work and patience.
If people don’t expect success overnight and are prepared to put in the effort, they will reap the benefits.
But keep in mind the drawbacks that are associated with MLM.
Interesting Stats About Affiliate Marketing?
- According to estimates, 80% of brands have affiliate programs.
- Affiliate marketing spending is predicted to rise by more than 10% in the next few years.
- With a market share of almost 39% , the United States leads the affiliate sector globally.
- In the United States and Canada, affiliate marketing accounts for over 16% of all eCommerce orders.
- Blogging is the primary source of traffic for about 65 percent of affiliate marketers worldwide.
- Over 15% of all digital media revenue comes from affiliate marketing.
- According to statistics, 94% of publishers use numerous affiliate marketing networks.
- Affiliate programs account for 15% to 30% of total revenues, according to advertisers.
- Affiliate marketing is one of the best ways to get new clients, according to 38% of marketers. (Web Market Support, 2021)
- According to Google Trends, interest in affiliate marketing has increased by 300 percent, with a high in July 2020. (As of 2020, according to Google Trends)
Interesting Stats About MLM?
- Nutrilite pioneered MLM marketing as a business concept in the 1940s.
- To succeed in network marketing, you must be in the top 1% of distributors.
- Dexter Yager, Amway’s all-time top distributor, made $12 million per year.
- In 2017, the multi-level marketing sector brought in $189 billion in revenue.
- The most successful network marketers in the world are Igor Alberts and Andreea Cimbala from the Netherlands.
- Within the first year, 50% of people who start an MLM business abandon it.
- Amway’s largest market is still China, which generated over $4 billion in yearly sales in 2013.
- The MLM industry in the United States employs 36.9 million people on a contract basis who do not work full-time or part-time on their business.
- In the United States, women make up 74% of the direct selling workforce.
- With 3,300,000 distributors, Japan is the country with the second-largest direct sales workforce.
Are Multi-Level Marketing (MLM) Opportunities Pyramid Schemes?
Pyramid scheme is an illicit business model in which the poorest people route money to the top after being promised assured returns on their investments.
Nobody knows for sure how the Ponzi scheme got started, however many people believe it was established by Charles Ponzi.
He founded a security exchange company in the 1920s that claimed to double investors’ money.
The business model crumbled, just like other pyramiding schemes, when Ponzi could no longer commit to the promise.
He was convicted of several counts of mail fraud and sentenced to five years in jail.
Ponzi was famous for starting a massive pyramiding scheme, although it wasn’t a network marketing company.
So, why do people connect the two?
It’s because many pyramiding schemes take advantage of network marketing and utilise it as a front.
It might happen in one of two ways:
- the company or its top-tier distributors switch from direct selling to recruitment as their primary source of income. In other words, inviting people is a better way to make money than putting a markup to the items.
- The network marketing company is trying to promote a product that doesn’t exist. Instead, it serves as a source of investment income.
The most serious issue with a pyramid scheme is that it is unsustainable. The entire arrangement is based on investment funds: whatever C pays B, B distributes to other investors.
Investors may receive the promised income or guarantee at first, which encourages them to recruit more people. However, as more people sign up, the cash may quickly run out. As a result, newer members do not get a return on their investment. Those in the highest tiers may receive far less than they did previously, until they receive nothing.
To be clear, pyramiding methods are not used by all network marketing organisations. That is why they have existed for so long. Avon, Amway, and USANA are excellent examples. Some distributors, on the other hand, may launch a fraud or engage in unlawful behaviour. Others may hide behind the company model.
In the meanwhile, just because affiliate marketing is less complicated than network marketing and less vulnerable to pyramiding schemes doesn’t imply it’s devoid of scams. It’s still possible that the product you’re pitching doesn’t exist or that it’s more focused on getting customers to make “investments.”
So now you know why I was saying affiliate marketing is much better than MLM. I am not saying nobody can be successful with MLM. Yes, you can but there are less chances as compared to affiliate marketing. In MLM your success depends on your team members but in affiliate marketing you are your own boss. Nobody’s actions can affect your success. This is the reason why I love affiliate marketing and you should also consider starting with it.
Also if you want to learn more about affiliate marketing then you should definitely join this free affiliate marketing training which is going to give you an immense amount of knowledge and you can benefit from it.
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