MLM vs Affiliate Marketing - what's the difference?

[winningratings]

The difference between MLM and affiliate programs or affiliate marketing boils down really to the multilevel aspect

In a MLM program, you get paid not only for your own sales, but for those of your "downline" as well i.e. for those people you recruited into the program. The problem with MLM programs in general however, is that many of them are illegal, because there is NO product

Always be very careful of anything where you are not actually selling a product

Affiliate Marketing on the other hand is where you are paid a set commission for your own efforts, and there is generally no commissions for people who joined the affiliate program through your efforts. I say generally because some affiliate programs do actually pay you on a second tier. However due to various actions by the FBI after the fiasco of "surf for cash" programs, many of the payment processors have now chnged their TOS so that NO money can be paid out for ANY downline aspect. However the company concerned can still pay you by cheque

In my opinion Affiliate Marketing is a really good thing to be in, and a really good way to make money online. If you take a typical program for example, you simply use your affiliate URL, and when you generate a sale, you are paid a commission. Its that simple. Its a good idea to avoid making it too obvious that your link is an affiliate link, and make sure you concentrate on the right products - this will take a bit of time to work out - but it can be a very lucrative system

[elephantgroup]

just had an affiliate try to recruit me into an MLM with a 'measly' $299 startup fee ... needless to say after my somewhat animated decline of the offer, he decided not to work with us anymore ... will miss his zero-sales-a-month performance terribly ...

[Linda Buquet]

You cracked me up Gregory!

In a nutshell, more than 2 tiers PLUS a start-up fee or "kit" you have to buy, means its MLM. Many times they call it affiliate marketing but it's not.

Also if their copy isless about selling the product
and more about recruiting others to...
go under you
join your downline
or create "spillover"

Those are all warning signs its really MLM.

[StephenR]

Man I despise MLM, MLM Hybrid and all matrix style programs. They prey on unsuspecting entrepreneurs new to the online marketing scene. Jon has his crusade against eBooks maybe I'l llaunch a crusade against MLM programs.

The only people that make any real money in MLM based programs are the owners of such programs and the top 2%. (Please challenge me on this one.) Start promoting MLM programs and people will avoid you like the plague. This goes double for your family members which are generally targted first by your "upline".

Check out this insightful page which outlines the pitfalls of MLM: Multi-Level Marketing (MLM)

Stick to one and two tier programs....***** the "downlines"

Sorry if I ticked anyone off here. I really despise these programs....as well as "guaranteed traffic", "pay to surf", and all "cash advance" (usury) programs.

Ok

I'm done. =)

[DaveMangas]

I honestly believe they could be one and the same. MLM simply leverages a business with the multitude of helpers you recruit. Affiliate Marketing is simply a business that could include mlm or you could be promoting a single product by yourself where someone sold you the rights to do so. The one thing they both have in common is the product or the offering was created by a company looking for marketers or affiliates. If you were the originator of the product or the offering, and you were promoting alone, you would not be an affiliate marketer at all for that case.

[Linda Buquet]

Hi Dave, Welcome to 5 Star. I see this is your 1st post.

No there are distinct differences as mentioned above.

With AM you are promoting the product to the end user.

With MLM you may sell product but the comp plan is weighted toward recruiting others and selling the BIZ OPP!

With AM the commission structure is typically clear and easy. X% of sale or lead or flat fee per sale or lead.

With MLM it takes charts and graphs and meetings to try to explain it and then most people still don't get it - and they probably can't explain it to their downlines either.

OK I know I'm jaded and there are exceptions to every rule.

Several things are very clear cut. AM programs are ALWAYS free to join, you never have to buy product and affiliate programs have no more than 2 tiers.

[Banks]

Linda, I think you did an extremely good job at comparing AM to MLM!

I think I actually laughed out loud by Mannmade's comments.

StephenR (great name by the way)- nice comment about the guys at the top.

I have always thought of MLM as a pyramid scheme with only the guys at the very top making any money, I really don't like things like this it just reminds me of a get rich quick scheme.

Has anyone here ever benefited from MLM?

Keep up the good work!!

[muskratviking]

I remember when I first started my quest to make money online it was through an MLM. I didn't know there was a difference between MLM or Affiliate Marketing nor did I know what AM was or that I was even participating in an MLM.

I think I built my downline most productively with PPC. But this was back in the late 90's. I have no idea what is going on in MLM these days.

All I know is that I fully enjoy affiliate marketing and think it is one of God's gifts to man.

And if I knew then what I know now about internet marketing, and individually about AM, and MLM, I would have never dabbeled around in MLM.

Whenever I think of MLM's I think of pyramids and personally I don't like things that are commonly associated with the word "scheme".

Good luck to all!

[Dorian]

This is an interesting topic and their is a difference yes as Linda mentioned above, but aside from that there are a lot of similarities that AM took from network marketing and they are:

> the hype and overloaded claims that are made
> the claims of income potential in a short time
> the people that join them

I see a lot of bridges beginning to come together between the 2 business's that may have someone wonder if they are different at all.

Network marketing is a good business and can be built online very well (as numerous have done before) but how you get paid, company policy and overall concept is day and night.

For someone wanting to promote something online and has never really marketed before I would suggest they go or stick with AM because the online template is already there (ex. promotional material, sales aids, sales letters, classifies ads etc.) network marketing does not have this type of online sales material because they want you to knock on Aunt Betty and Uncle Phil's door, sit down with them and show them all your brochures, catalogues and dvd's that the company has.

One of the main ways mlm companies make money (off the distributor buying marketing materials).

[Vicki Lai]

Thanks Linda and Stephen for your details information about MLM. You know I have finally QUIT my MLM *business* today, I can't believe I have lost all the money I invested in.

I didn't like MLM at all before I joined the MLM business, but the thing is when you are being told by someone you truly trust and that person is not a stupid idiotic but a very smart, work-harding and determinate person, it is very easy for you to get into these tricks. I am not saying that person wanted to cheat you but when you get to know more about the *team*, and the system, you know something is not right and find out the difficulties for recruiting. Check out the *The Truth About MLMs by Winston Wu* provided by stephen in the earlier post. I finally realized all the difficulties I have encountered are due to a proven wrong system.

And, one more thing to think about, why there are loads of successful marketers succeed in AM rather than MLM? they know how to do marketing online? but why they don't do MLM or fail in MLM? think about it!

By the way, it is a hard lesson to me, I have been in the *business* for nearly 8 months and still get me no where. I feel a bit shame that I did listen to my uplines and approach to my warm leads. I feel shame to talk to them anymore even though they didn't join my program.

Finally, I don't think only those who are stupid and greedy can be cheated by MLM nowsdays, I am not giving excuses for myself. But I did cheat it as a business, therefore I didn't give up and try as many methods as possible. Do listen to those people saying about the negative things of MLM and think about it, and again, don't trust your friend's decision too much even though he or she is a Oxford or Standford's graduate. THEY CAN BE CHEATED AS WELL! But thanks god, though I have lost my money in MLM, I have found AM and I know this is the *REAL REFERRAL* business.

This forum is great! Thanks for you guys! Trust your own feeling, guys!!!!!!!!!!