Multi-level Marketing vs. Affiliate Marketing! Which Is The Best Money Making Option?

multi level marketing vs affiliate marketing best income stream

As of today, there are incredible options for people to work from home and establish one’s own business. There is rapid growth in the number of individuals who choose to make money online. Today, I’ll discuss multi-level marketing vs. affiliate marketing.

These two business models offer great opportunities to reap the passive income you’ve always wanted. First, you must discover which works best for you! 

Now, you can settle on working your way to reaching financial stability! There’s no need to worry whether or not you have prior experience in any of these industries. It is a must to weigh out the pros and cons and work with the skills you can hone!

What Is Multi-level Marketing?

Have you heard of Amway? I’m sure you did! It is a giant in the industry of multi-level marketing.

According to Direct Selling News, Amway ranks first in the 2020 Global 100 list based on annual revenues. This company garnered $8.4 Billion in 2019 alone! 

Multi-level Marketing (MLM) is also known as network marketing. It encourages individuals to promote products and services of an MLM company and recruit people to join the platform. These individuals are called your “downlines”. For every successful sale and referral, each distributor or brand partner will be compensated accordingly.

multi level marketing definition

It is common for MLMs to have a binary commission system where you have a left and right leg that you can expand by recruiting people to join your sales team. The number of potential income streams or incentive options you can have within this business model depends on the company. But these are solely based on how many people you can add to your downlines.

 Although you can earn quite a sum of commissions from direct selling, there is a huge reliance on signing up people to ensure that you generate profits. Plus, this is basically a hierarchy system. The more you recruit, the higher rank you can achieve. Thus, the better income you can receive.

What MLMs want is to give you the chance of owning a business with minimum expense. Some of them require no registration fee, and others can be quite expensive. The majority of them claim to have the most lucrative compensation plan. I have come across a lot of them and it sure sounds promising.

Here’s a list of Multi-level Marketing companies, and check if there are companies you’ve heard about or want to be involved with.

But, I believe, that in order to thrive within this industry, you must have exceptional skills in selling and recruiting. Keep in mind that not every MLM is worth trusting. Some of them are disguised as pyramid schemes and would just lure you into a non-existing income generation platform.

What Is Affiliate Marketing?

While Affiliate Marketing needs no recruitment to earn an income, it allows you to work with what you are passionate about. You can choose a niche that you are fond of that will allow you to promote and recommend the products effectively. 

All you need to do is create a website, apply for affiliate programs, conduct product research, and create compelling product reviews! As long as you craft a strategy on how to drive traffic to your site, you can definitely count on making money online!

multilevel marketing vs affiliate marketing definitions

It is another passive income stream that will surely help you earn while you sleep.

If you ask me, I would prefer this over network marketing. But, it’s up to you which of these business models suits you best. Let’s find out who will win as the best income reaper in this rivalry of multi-level marketing vs affiliate marketing.

The Advantages and Drawbacks of Multi-level Marketing

Perhaps you’ve come across tons of making money online opportunities and can’t find which platform is the best one to settle with. In whatever way you may want to start your business, just remind yourself that it’s something you’ll have to commit to in the long run.

Choose the right one you believe will work for you and can truly give you the potential to attain financial stability.

The Advantages

1. Multiple Income Streams

Despite the fact that there is a negative connotation towards MLMs, there are different potentials of generating profits. As long as you work hard to achieve a better ranking position within the system, I’m sure you’ll truly enjoy its incentive program.

2. Product Discounts

Signing up as a distributor and independent business owner on any MLM, you are entitled to product discounts. You can purchase products for your own use. Plus, you can have up to 40% worth of discounts and make quite a commission from selling their items. 

3. Earn Residual Income

People usually think that passive and residual income is similar. But, it’s not. Passive income is the profits you generate from doing the only minimal effort. While residual income is more like the excess money you have and can spend lavishly. 

Since there are multiple income streams within an MLM, there’s a great chance for you to earn a lot! 

4. Great incentives

Multi level marketing Incentive Trips

Do you want to travel the world or have your own luxury car without paying for anything? At MLMs, that’s a possibility.

As long as you meet the requirements to redeem these incentives, you can have the company pay for your travel and monthly car expenses.

On the off chance that you were able to hit the month to month quota of sales volume, you may fit the bill for a pink Cadillac or a vehicle of your choice. You can even book a cruise to the Bahamas!

As long as you work hard for it, nothing is impossible.

In multi-level marketing vs affiliate marketing, both requires sufficient amount of time and effort.

5. Be a part of a Better Cause

Massive MLM companies have their own foundations to support. Each of their distributors is automatically a part of it.  These organizations range from helping a community to have drinking water, funding research facilities for a cancer cure, to providing children with better education and a whole lot more.

The Drawbacks

1.Expensive start-up cost

It is very rare for multi-level marketing companies to offer individuals free sign up fees. But to name a few, they are HB Naturals, Zinzino, and Nutrisail.

The others are asking for a huge sum you must pay upfront when you try to register. It doesn’t stop at that. You may be required to make a minimum product purchase or buy any of their start-up kits to finally become a distributor.

Recurring payments for online tools or replicated websites exist. 

Is that all? Nope. MLMs require annual renewal fees for memberships. If you fail to do so, they will have a reason to believe that you are not an active distributor or are not anymore interested in the income opportunity. Thus, resulting in getting your distributor privileges taken away from you.

2. Monthly Quota

There can be quite a lot of promising rewards you can acquire from starting a business at an MLM. But, the difficulty to qualify for any of it is obvious. 

Usually, there is a monthly quota you must surpass to continue as a distributor. This varies depending on the company’s requirements. Distributors or consultants must achieve at least a minimum personal sales volume (PV).

Failure to comply can also result in getting kicked out of the business model.

3.  An Inventory of Unsold Products

You can purchase products for personal use just to make up for the remaining monthly PV you are having difficulties to acquire. You wouldn’t want to keep doing this every month, because you’ll surely end up with a garage full of inventory.

Even though there are MLMs that don’t require you to stock up products to sell, there are still some who do.  This is called frontloading. It obliges distributors to purchase a minimum amount of products to keep up with the monthly PV requirement.

Don’t let this be a cycle you’ll end up having difficulties to get out of!

There are tons of people who are left with a room full of unsold products. It becomes a habit to just purchase the products for themselves and to cross their fingers that they can sell any of it someday.

Unfortunately, some of them are paying more than they are earning. Worst-case scenario, you may end up in debt just to stay active at an MLM.

Your goal is to generate profits and not to wind up with a financial loss. It will become more of a struggle to have a return on investment. There are usually unrealistic requirements at an MLM resulting in a huge percentage of people failing instead of succeeding.

4. Pay to Play System

Startups at MLMs vary. You will be offered different plans to choose from according to the budget you have. But, you will be encouraged to purchase the most expensive to have the best leverage.

Since companies like these have a ranking system, they’ll offer plans that allow you to start at a higher level. The better the ranking position, the better the rewards.

The more money you put as an investment, you will be promised to have greater rewards than those who chose to start with a lesser cost plan.

5. Possibilities of Shut Down

It is quite evident that there are existing pyramid schemes. Although not every MLM is one of the frauds, there is a huge chance that a company can get flagged for various reasons. 

There are several multi-level marketing companies that are sent warnings for FDA violations. These are due to exaggerated product claims, which are not entirely surprising anymore. You can never be certain that an MLM you’ve signed up for can stay for decades. 

Multi level marketing vs affiliate marketing drawbacks

Only a few existing MLMs are clear of any legal issues. For instance, the Basic Reset had several FDA violations and was asked to cease operations. 

At first, they were told to stop selling any products until they do something about the violations. At the time the warning was issued to the company, I was able to go over its website and they have not indicated why the products page is down. They have only stated that it is under maintenance.

As of this writing, I can no longer have access to their website. The company is officially shut down.

If you do not mind the risk that MLMs have and would like to take your chances, make sure to research about the company first. What you can do is check whether it complies with FTC’s Guidelines

Advantages and Drawbacks of Affiliate Marketing

In terms of weighing out which is better, I must tell you to think about every important aspect. The winner from multi-level marketing vs affiliate marketing will still depend on you.

The Advantages

1. Easy to Start

multi level marketing vs affiliate marketing advantages

Starting as an affiliate marketer requires no prior experience. If you have always had a passion for writing, this can be quite easy for you.

All you need is a working website, a niche of your interest, and an affiliate program. Once it’s all set up, you can start right away. On top of that, you don’t have to pay for expensive starter kits and worry about exceeding your monthly sales volume.

Writing compelling content will be a piece of cake when you know what you are talking about. It’s best to choose to create reviews and recommendations based on your hobby!

2. Flexible Working Hours

This is truly the kind of business model that lets you work at your own hours. MLMs will tell you that you can work at any time of the day, I’m sure you’ll have to spend every minute of it convincing people to buy expensive products from you. Or join your sales team.

Plus, the fact that you have a monthly quota to keep up to, the pressure of it will have you working day and night.

3. No recruitment

For those who are not amused by the thought of persuading people to join a business, you can stick with Affiliate Marketing.

Some of us may find it a struggle to sway others into making a decision we have suggested. I have mentioned earlier,there is a negative perception of multi-level marketing companies. 

There’s a lot of people who’ll turn you down right away once they hear that you are associated with an MLM. These are those who are firm on their perception that every MLM is operating as a fraudulent scheme.

With affiliate marketing, the only convincing you need to do is through your written content. You don’t have to put yourself in an awkward situation, to talk someone into getting involved with a networking company.

4. Easily Get Paid

Have you ever read a networking company’s compensation plan? Even if it can sound promising, most of them are too complicated to comprehend. There was a lot going on and it can be quite a headache to read.

Unlike MLMs, affiliate marketing has no unrealistic requirements just so you can have an assurance of profits.  Plus, it’s not confusing at all. 

Grab the affiliate links of the products you recommend, and include them to your written review. Once a person buys through that link, you can get paid instantly! 

multilevel marketing vs affiliate marketing payment

Keep in mind that the worth of commissions you can acquire depends on the affiliate program you have joined.

Are you already having an insight on which income stream is better? Multi-level marketing vs affiliate marketing, which do you prefer?

You might want to consider the disadvantages of affiliate marketing as well before establishing a decision.

The Drawbacks

1. Conducting Research

Multi level marketing vs affiliate marketing

You must consider whether or not people will come to like what you are offering them. When it comes to promoting or recommending products, you just don’t choose the ones you like.

Think about what people are looking for and what your audience can find useful. Are there new products out there? Keep up with the latest trends.

Conducting research is vital in order to understand what your prospects want and need. Your readers can see when you don’t know what you are talking about.

2. Earning Can Take A While

Building an online presence can be tough. Note that people will prefer to trust those who have already built a reputation when it comes to recommending products.

It may take some time to earn the trust and loyalty of users. Patience is what you need. Don’t be discouraged. Instead, do what you can to have people come to you.

Once you have finally established your website and have the traffic you want you, make sure to engage with your audience. If they can see the value of what you are giving them, you’d surely be generating sales in no time.

Moreover, you must continuously promote your website and create a marketing strategy so that people can find you!

Final Thoughts

Let me know if this multi-level vs. affiliate marketing article has enlightened you on which income stream you will settle with!

Both are great passive income streams once you have learned your way around it. You can start this as a side hustle. If you’re able to grow in any of these industries, then you can be confident enough to fully commit to it and leave your corporate job.

None of us can be expert affiliate marketers or MLM distributors overnight. With patience, dedication, and hard work, you’ll finally earn the fruits of your labor.

In case you are unconvinced that any of these is the right online business for you, you might want to consider eBay dropshipping! This is just one of the few of my multiple income streams. Let me guide you to start yours today. Schedule a consultation with me right here at HustleandMotivate.com!

I suggest you listen to Hustle and Motivate Podcast on iTunes and learn about my journey to success.

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