Hmm… They’ve both got the “marketing” part in them, so which is better? Are they different? How?
MLM stands for multi-level marketing. That’s when you buy a product, sell that product and receive a commission, after which the person who bought it from you goes on and sells the product, and not only does HE receive a commission for that sale, but you do as well.
Before we compare MLM and affiliate marketing, you should know what a pyramid scheme is.
Here’s how it works: Everyone pays a fee to be part of a program. Once you’re a member, you start recruiting new people to join the program, and you receive a commission from the money the company is making off them. They in turn, as part of this wonderful program, also start recruiting people to join, and, in turn, they, and usually you, the person who recruited them, receive a commission.
All this while the owners receive the lion’s share of all the money, without really working at all. So, what’s the problem, you ask? I know it’s silly, but if it works, it works! Right?
Pyramid Schemes Are ILLEGAL
In many/most western countries, pyramid schemes are illegal. Why? Think about it.Why is it called a “pyramid” scheme?
Although pyramids are built from the bottom up, over here, we’ll go from the top down.
At the very top is the owner, who’s making all the money. And from him, we go down and down, with the pyramid getting wider and wider, as more and more people join the program.
Problem is, it can’t go on indefinitely. Even according to the fantasies told to the members, in the end, they’ll reach the end, as all the world’s population will all be members of this ridiculous scheme, paying money so they can recruit more people, of which at this point there are no more people left, and therefore, there is no reason to continue paying, at which point the whole scheme collapses.
But there is no need to go so far. Long before the world’s population are all members, the program will dry up.
This pyramid starts from the top down. As such, it has no foundation. It’s based on nothing, floating in thin air. There’s nothing tangible going around. Sooner or later, it’ll be impossible to recruit more members.
So what, you ask, has this got to do with MLM marketing? After all, unlike the pyramid scheme, where there actually is no product or anything real to go around, at MLM, there is a tangible product that people who are interested will buy! What’s wrong?
Well, for one, most MLM schemes are just a pyramid scheme in disguise; a legalized pyramid scheme. In other words, you are all either paying money to be in the program or to buy a product at an inflated price and have to get other people to do that as well.
The whole pyramid story all over again, except that now we have thrown in a product that nobody is interested in at all; they’re just buying it so that they can sell it, and on and on again.
In short: You buy a product + pay a membership fee (usually) so that you can sell others on this scheme.
·1: You nudge your family and friends (soon to become ex-friends).
You nudge people on social media.
You nudge them to buy a product that they probably don’t even want + nudge them to join the MLM.
·2: You desperately try to get people to buy the product so that you can justify your membership fee/product purchases.
·3: Do the same, old thing, with the same old product over and over again.
·4: You do not own any part of the business.
·5: If the owners decide to reduce the commissions, then all your work goes down the drain instantly. (As all the commissions you’re getting from your customers’ customers’ customers etc. goes down.)
In Affiliate Marketing:
·1: You own your own website.
·2: You get traffic by writing out content.
3: You promote products by helping people who are searching for information.
·4: You can choose which products to promote.
·5: You don’t depend on your customers nudging other people; you don’t try to sell them on a scheme.
·6: Your website is not going away, you can earn money from the same work over and over again.
·7: Affiliate programs are free to join.