If you’re looking to start your own (online) business, which is the best way to do it; affiliate marketing or MLM (multi-level-marketing)?
The winner is an obvious one here & I can’t even understand why this remains a debated issue.
Clearly, the winner is… affiliate marketing.
I may be biased here since I make all my money with affiliate marketing, but as you’re about to see, affiliate marketing is – by far – the best out of the two options.
In this quick guide, I am going to share with you;
- The difference between affiliate marketing and MLM
- WHY am I believe affiliate marketing is the clear winner here but;
- I’ll also throw in some pros & cons of each method (so you can make up your own mind).
Let’s first see what these two business models are all about:
What Is Affiliate Marketing?
Affiliate Marketing is the business model where you can sell other’s people products in exchange for a commission.
The commission rate varies (you’ll find products that offer >5% all the way up to ~75%).
You make money with affiliate marketing when you convince a customer (typically through the use of content marketing and blogs) to buy a product you are recommending.
You will then send the customer to the official website – through your affiliate link – and if the customer buys the product, then you make a commission.
Sounds simple? It actually is.
Most people over-complicate it (which is probably why so many find it hard to make money).
If you’d like to know more about affiliate marketing, take a look at my “getting started” guide here but, before you do that, here are some pros and cons about affiliate marketing which I think you should know about…
The Pros & Cons of Affiliate Marketing
PRO: You Are The Boss:
Unlike with MLM where you always have a “boss” (i.e the company) that is dictating what you should do next, affiliate marketing allows you to be your own boss and make your own decisions.
Yes, technically you are still somewhat “controlled” by the creator of the product you are promoting, but you’re still your own boss because you can always choose to switch up the products you promote (if they are heading into a direction you do not like)
Promoting products online does take a specific skill though, you may want to see my guide on how to promote affiliate products here.
PRO: You Can Make Unlimited Income:
There’s no cap to how much money you can make with affiliate marketing.
It all comes down to the traffic, the quality of your traffic and the offer you are promoting.
If you sell a product that earns you a $100 commission, you can make one sale a day, one sale a month or 100 sales a day.
Since you’re the boss, it comes down to how much effort you are willing to put in.
PRO: You Are Not Limited To One Brand:
When you join MLM, you are tied to one company and there’s not much else you can do about that.
However, with affiliate marketing, you can promote more than one company through your website.
For example, on this website, I am an affiliate for 6 different companies and I earn commissions from each one.
I can – at any time – choose to add more, remove a few or even find a replacement because again; I am my own boss.
PRO: The Entire World Is A Potential Customer:
Since affiliate marketing income mostly comes through your website/blog, your audience is technically in the billions.
Your website is up 24/7/365 and all the time it is up, you have the potential to make money (even when you are not working).
As I said in the above point, there’s really no limit to how many people you can reach and how much money you can make.
PRO: Free To Get Started With:
One last pro about affiliate marketing is that you can literally start with $0 money.
While I would suggest you at least get a domain and hosting (which costs around $100 a year), you can even get started with a free website and build on that.
(Eventually, you will want to switch to your own domain, which is why I suggest making the $100 investment when you are starting out).
CON: It Takes Time To Make It Work:
The only con of affiliate marketing that I can think of – that is a big enough issue to be mentioned here – is the fact that affiliate marketing takes time to grow.
Starting a website, getting traffic to it and have it make sales 24/7 is not something you can build in a day or two.
It usually takes months to get going and you can see why in my guide explaining how long it will take to make money with affiliate marketing on why it’s like that.
Alternatively, you can also buy a ready-made website that is already getting traffic and making money, this will eliminate this “waiting” issue – you can see my guide on how to buy ready-made websites here.
What Is Multi-Level Marketing?
Multi-level marketing (which is a business model very similar to pyramid schemes, which are illegal) is the practice where you need to recruit others into buying the same products you bought, and then you make money when your “recruits” recruit others.
Complicated? You bet.
Weird? Not really, but very annoying (ask any friend of someone doing MLM).
You can find out more about MLM and how it works here, but one major issue it has is the business model itself.
Have you ever heard this pitch?
If you recruit 5 people, and they recruit 5 people, and then they recruit 5 people, you will blah, blah, blah…
While that sounds good in theory, as it turns out – it’s quite impossible. Within 15 cycles of that, you run out of people in the world that are interested in your offer.
Now sure, you might say “well I don’t need to recruit everyone“, and you’re right – you don’t but to make the amounts of money MLM companies try to sell you on, you have to.
As you can see, I’m really not a fan of MLM, but just with everything else, there are a few pros (and a lot of cons) to it, so let me do some little digging and try to come up with some…
The Pros & Cons of an MLM Business
PRO: If You Know Sales, You Can Make Money
One thing that’s attractive about MLM is the fact that if you can sell – in person – you can start making money relatively quicker than you would with affiliate marketing.
Of course, not everyone has the “gift of the gab” and while it’s a skill that can be learned, it’s not something that is often shown as a requirement when you are starting out with an MLM company.
PRO: With “Multi-Levels” You Can Increase Your Income Quickly
Just like I mentioned above, these multi-levels can only go so deep before you run out of people in the word so there’s a major flaw with the model, however;
You can exponentially increase your income with MLM if you know how to sell and you get people in your downline that also know how to sell.
Is that hard to do? Very much – but not impossible either.
PRO: You Leverage A “Well-Known Brand”
Another pro (which affiliate marketing also offers) is the fact that you are riding off the hype of an already built-up brand.
While as you’ll see next, MLM companies are typical scams (even the FTC warns about these) you will find some mega-companies (such as Herbalife) which use the MLM method but are also “legit” companies with a huge customer base.
CON: You’re Not Your Own Boss
One of the worst things about MLM is that you still have a boss that dictates how you should be running your business.
This is not necessarily a bad thing, but I moved away from my 9-5 job because I hated having a boss, so to take the risk, break out on my own and still have a boss that I need to answer to, just doesn’t sound that attractive to me.
CON: You Have To Pay To Join (Insanity)
This is insanity and probably my biggest critiques when it comes to MLM and companies that use this model.
You actually have to PAY to be able to promote the company.
if you have to pay, you’re not an “associate”, you’re a customer and this is why MLM gets such a foul reputation from many (not just me).
They basically “sucker you in” with big hypes and promises and sell you products, the only way to make your money back (hopefully with some profit) is to go out and hustle (and annoy your friends) to do the same mistake.
Basically, you’re starting off deep in the red – sometimes thousands of $$ deep already before you make any sort of money.
CON: Most MLM Companies Are Proven Scams
Yes, my view of MLM is somewhat biased because I make money with affiliate marketing but the fact that most MLM companies have turned out to be complete scams is not a fact that you should ignore.
There are plenty of horror stories from MLM victims which you can read about here, but I also suggest you take a look at this video from John Oliver explaining the dangerous scams MLM companies are:
You may also want to check out this video from one MLM victim where she shares how she got stuck into a never-ending cycle of forking out money with no return – truly scary stuff:
Which Is The Best Way To Make Money?
So, with all that we’ve discussed here, which do you think is the best way to make money, affiliate marketing or MLM?
I’m going to stick to my guns here and say MLM is probably NOT the best choice to start making money online (or otherwise).
I would also highly encourage you to not take my word for it, and instead, check out what other people are saying as well.
Here are some more articles that you may want to check out:
- Pyramid Scheme vs MLM (Multilevel Marketing)
- Yes, Even Your MLM is a Scam
- 5 Signs that MLM “Opportunity” Might Be a Scam
Since it has been working for me so well for the past 7 years or so, I’m going to recommend you to try affiliate marketing if you are seriously interested in making money online.
As I said above, it’s not a “quick way to get rich’ by any means, but if you know what you’re doing and you stick it out – you are set to have a full-time business with unlimited earning potential in about 12 months (which is what I estimate how long it will take you to start making any noteworthy income).
Don’t Waste Your Time With Scams, Start Your Affiliate Marketing Business…
If you’d like to start learning how to make money with affiliate marketing, then I suggest you take a look at this free training course which will give you everything you need to know and do to set up your affiliate marketing business for success.
This is the same course I’ve gone through to finally be able to make money online and I’ve been recommending this to all my students for the past 5 years, most of which are now full-time marketers in their own right.
You can see my in-depth review of the training course before you join here.
WOULD YOU LIKE TO KNOW HOW I MAKE MONEY WITH
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Affiliate marketing vs MLM.
I’ve been wanting to cover this topic for a very long time and now that I’ve finally managed to get it out there, I hope it helps set a few people ion the right path forward.
If you’re currently doing MLM (or have been burned by an MLM company in the past) I’d love to hear your thoughts below so leave me a quick comment with your experiences.
I’ll leave you to it.