There was a time when I had to choose between MLM and affiliate marketing.
I was a rep for Amway and it wasn’t going well. I would buy product every month and try to sell them to my friends and show the plan in an effort to recruit others.
After the first year, I was looking for opportunities again and came across affiliate marketing. By comparing the two business models and weight the pros and cons of each, the choice was an easy one for me.
Starting an online business can feel overwhelming, especially when choosing between two business models. If you find yourself having to decide between affiliate marketing and MLM (also called network marketing), then you should read this article all the way to the end.
While both affiliate marketing and MLM promise the opportunity to earn money by selling products, they work in very different ways. This guide will help you understand exactly how each business model works, their real costs and benefits, and which one might be right for you.
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What is Affiliate Marketing?
Affiliate marketing is where you promote other companies’ products and earn a commission when someone buys through your recommendation.
This happens on the internet through articles, blogs or even social media sites. In summary, you find great products, share them with others, and get paid when they buy.
When set up right, you can make money while you’re sleeping, out with friends, at the gym or just hanging with your family.
Affiliate marketing has a lot of great benefits. Here’s what I love about this great business model.
Affiliate Marketing Pros
These are the advantages that attracted me to affiliate marketing. Being an introvert, these benefits were better for me than what MLM offered.
To be fair, everything isn’t all sunshine-y. Here are some challenges you’d encounter in affiliate marketing.
Affiliate Marketing Cons
If you take the time to learn affiliate marketing the right way, you’ll be able to understand these disadvantages and be ready to handle them when they arise.
What is Multi-Level Marketing (MLM)?
MLM (Multi-Level Marketing) or network marketing works differently. Here, you become a distributor for one specific company.
You not only sell their products but also recruit other people to join as distributors under you. You earn money from your sales and get a percentage of what your recruits (and their recruits) sell.
MLM has gotten a bad rap over the years for different reasons ranging from FTC shutdowns to the common claim that some companies are running illegal pyramid schemes.
As much as MLM gets a bad rap, they do have some benefits.
MLM Pros
These are just some aspects of MLM that I found beneficial. I think some of what I learned while doing Amway spilled over to my affiliate marketing efforts.
Now for the bad news about MLM…
MLM Cons
I didn’t know any of this before I joined Amway but learned either the hard way or much later how much these disadvantages were true.
Some MLMs are even realizing how much these disadvantages are holding them back and switching to the affiliate marketing model as is the case with Beachbody.
Let’s compare some of the more important factors of these two business models in detail.
Initial Investment & Startup Costs
Knowing the true costs of each business model is crucial for beginners. Here’s what to expect.
Affiliate Marketing Costs
Total minimum startup cost: less than $100
MLM Costs
Total minimum startup cost: $700+
This is what it typically costs to start an MLM business. Some MLMs cost a lot less to get started. I remember paying $500 XCD to register for Amway and get a starter kit. Now it’s totally free to join Amway in any country where they operate.
Income Potential & Revenue Streams
You can earn income with both business models, however the paths and probabilities differ significantly.
From my experience, I wasn’t able to earn a lot of money with MLM but since starting affiliate marketing, I’ve earned hundreds of thousands of dollars over the years.
Here’s a comparison of how affiliate and MLM income potential and revenue streams differ.
Affiliate Marketing Income
According to Authority Hacker, the average affiliate makes $8,038 per month. This takes into account the vast number of beginner affiliates who make very little in their first year and the small percentage of super affiliates who are making over $50,000 per month.
MLM Income
The median income is the telling statistic here, compared with the affiliate income average of $8000+ per month.
Control & Business Independence
The level of control you have in your business is another aspect that varies considerable between both business models.
Here’s what I mean:
Affiliate Marketing Control
MLM Control
Skills & Training Required
Both affiliate marketing and MLM require that you learn some skills. I think that the skills you learn doing either business model are incredibly valuable.
The skills you’ll learn are different but they’re all skills that you don’t need a college degree to attain.
Affiliate Marketing Skills
Basically, you can take different paths when doing affiliate marketing and that will decide what skills you need to learn. The cool thing is that you will learn as you implement the different skills.
MLM Skills
Thank you MLM for the personal motivation skills I picked up. I needed those skills while trying to learn affiliate marketing in my first year.
Legal & Ethical Considerations
On to the stuff that will keep you out of trouble. The legal landscape and ethical implications of doing either business model deserves careful attention.
This section will probably make your decision a bit easier.
For Affiliate Marketing
Big companies like The New York Times and Hearst Magazines are involved in affiliate marketing on the affiliate side which says a lot about this business model’s mainstream acceptance.
For MLM
The bottomline here is that it’s not easy to operate in a space where the company you distribute for could possibly get shut down tomorrow.
Should You Choose Affiliate Marketing or MLM?
So how do you decide which business model to choose?
If you’ve been paying attention up to this point, you’re probably already leaning to one particular model already. Let me make it easier for you to decide.
Consider the following factors when choosing between affiliate marketing and MLM.
Budget
Low budget: Affiliate marketing is more accessible. You can even start for free.
High budget: Either model possible but consider the risks.
Time Availability
Part-time: Affiliate marketing offers more flexibility.
Full-time: Either model works, but affiliate marketing scales better.
Personal Strengths
Content creation skills (writing, video, etc): Favor affiliate marketing
Strong personal network: Either model works
Sales experience: Beneficial for both
Technical skills: Advantage in affiliate marketing
Risk Tolerance
Low risk tolerance: Affiliate marketing has lower financial risk
High risk tolerance: Consider your comfort with MLM business model.
Typical First Year Journey
| Timeline | Affiliate Marketing | MLM |
|---|---|---|
| Months 1-3 | Learning and setup | Training and initial investment |
| Months 4-6 | Content creation / first sales | Personal network sales |
| Months 7-9 | Growing traffic / consistent sales | Focus on recruitment |
| Months 10-12 | Optimization and scaling | Team building and maintenance |
Conclusion
After comparing these business models in detail, affiliate marketing comes out on top as the more sustainable and accessible option for most beginners. It offers lower startup costs, more flexibility, and better long-term growth potential without the ethical concerns and high failure rates associated with MLM.
If you’re just starting out, consider these final recommendations:
- Limited budget? Choose affiliate marketing
- Want location freedom? Affiliate marketing wins
- Prefer product flexibility? Affiliate marketing is better
- Want structured training? Either model works, but affiliate marketing has more free resources
- Need quick profits? Neither promises fast money, but affiliate marketing has lower risk
If you’re ready to start your affiliate marketing journey, this website is a great place to start.
Begin by choosing a niche you’re passionate about, learning basic online marketing skills, and creating valuable content for your audience.
Success in either model requires dedication and time, but affiliate marketing offers a clearer, more ethical path to building an online business that will be able to thrive for a long time.
