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Affiliate Marketing vs. MLM. Is there a difference?
By DaveM | December 11, 2006
I had an interesting conversation today, via Instant Messenger of course, with an x-coworker who I still keep in touch with. She had been reading this website and blog over the weekend and basically made the comment to me that she’s “a real sucker for mlm opportunities” and if she wasn’t so busy right now “she would have been in 5 more businesses” after reading my site.
While flattered by the inference, I was taken aback just a bit by her comment because I don’t promote any mlm or network marketing opportunities on my website.
In response, I explained that I don’t promote mlm and that all she would find on my website now are a few links to affiliate marketing programs and related products. I further explained that I try to promote great 2-tier affiliate programs because they allow everyone to leverage the efforts of other people who might also decide to become an affiliate.
Basically, if I recommend an affiliate product that results in a sale, I get paid — end of story. With 2-tier affiliate programs, I still get paid for all personal referral sales, but if my ‘customer’ becomes an affiliate for the same company, I get a small percentage of their sales as well. They then would have the same 2-tier opportunity available to them.
Affiliate marketing is pretty simple, and powerful!
Anyway, my friend felt that 2-tier affiliate programs sounded “pretty much exactly like an mlm to her. She could not see the difference.
So, is there a difference between affiliate marketing, specifically 2-tier affiliate programs, and mlm / network marketing? I think there definitely is…
(For the purposes of this discussion, I’ll use the term “mlm” to mean mlm AND/OR network marketing. I realize there are a few distinct differences, but those aren’t relevant to what I’m talking about here)
- Affiliate programs don’t have 5, 6, 7 or more layers of commissions that must be paid out to the “downline”, mlm’s do. Mlm’s also have infinity bonuses, break-away bonuses, bronze, silver & gold bonuses, car allowances, etc, etc… Unfortunately, this usually results in mlm-marketed products being grossly overpriced.
Most mlm’ers claim their products are cheaper because they are “buying direct” and cutting out the middle man. They forget there are 5 or more “middle-men”. Or they claim the products are a better value and worth more because they are “concentrated” and you don’t use as much, or they are superior due to years of scientific research and double-blind studies.
In some cases, I’m sure these things are true. I have actually seen some great, well priced products sold through mlm channels. But those a few and far between. - Affiliate programs do not have elaborate qualifications or flaming hoops you have to jump through in order to get paid. You aren’t required to have a minimum monthly personal or group sales volume, you don’t need a certain number of people in each “leg” of your organization to be “balanced”, and you certainly don’t have to give your first sale or two to your “upline sponsor” in order to qualify for commissions.
Nope, affiliate marketing has NONE of that razzmatazz. If you are an affiliate for a company, and you refer a lead who ends up making a purchase - YOU GET PAID. No IF’s, AND’s or BUT’s about it. And, with affiliate marketing, you don’t even need to own the product you are promoting! It’s recommended, of course, but not required. - Affiliate marketing companies DO NOT use the “curiosity approach” when marketing their wares. On the other hand, almost ALL mlm’s use curiosity, hype and a bit of deception in their marketing — and it really pisses me off. I mean, if the company and product/service are so darn superior, and they are going to eventually take over and rule the world, then WHY IN THE HELL are they so reluctant to share the name of the company and/or tell me what the product is???
Oh NO - that would be too simple! Instead, I have to read through 15 pages of HYPE on some website, and then subscribe to an auto responder email series and read for 3 days before I ever find out what exactly it is the mlm’er is pushing. Or worse, I have to go to someones house and watch them draw circles on a whiteboard, or listen in on some “opportunity” conference call where a bunch of people with southern accents tell me how fat their paycheck was last month.
And even worse than all of that, heaven forbid I actually PURCHASE a “getting started kit” (or whatever they call it) that turns out to be a generic freakin’ sales pitch for the mlm opportunity!!! Can you say Herba….. Ah, forget it. It’s not worth it.
I also realize the whiteboard meetings probably don’t happen as much anymore, but I was thinking back to my Amway days. Shhhh… Don’t say the “A” word!
Alright, I’m getting a little excited…. Breath Dave, Breath….
INHALE….EXHALE……INHALE……..EXHALE…………….5…..4…..3….2…..1……
Sorry ’bout that.
Now, I’m not saying that ALL mlm companies or people doing mlm are bad. Heck, I myself have been an mlm’er more than once in the past. It’s not always the mlm’ers fault for using the curiosity approach while trying to build the business. Most likely that is what they were taught as part of the company training program. It’s always about “plugging into the system”, and you’re usually treated like some 3-headed 4-eyed alien if you try to venture out on your own and develop your own marketing ideas. That is frowned upon in mlm.
There are definitely a few good and reputable mlm companies out there that have top-notch well priced products and they don’t use a bunch of hype or deception in their marketing. But those companies typically have the (much) less attractive commission structures (pay-out plans) and they never get very popular because the mlm “heavy hitters” can’t get rich promoting them.
If I offended anyone with that “bunch of people with southern accents” comment, I apologize. That probably wasn’t appropriate, but doggone it, it’s true. EVERY time I’ve participated in any sort of mlm related conference call, seminar, or meeting, the so-called successful people at the top spewing all the hype seem to have that deep southern drawl!?! I just don’t get it. If anyone can explain this phenomena, please fill me in. 
Lastly, most mlm programs, especially the newer ones that operate almost 100% online, are just signing people up, taking their money, and pumping out cookie-cutter websites that all look the same. It’s the whole business-in-a-box pitch and they try to convince you that all you need to do is promote your brand new website and you’ll be rich. Usually, the advertising methods they teach are things that don’t work such as traffic exchanges, FFA sites, ad-blasters and safe-lists.
Cookie-cutter websites are all well and good - IF there weren’t 100,000+ other glassy-eyed newbie mlm’ers out promoting the same EXACT website using the same EXACT non-effective advertising methods! These companies typically just want your money and could care less if you succeed.
With affiliate marketing, you usually get some marketing material such as banners, graphic ads, some pre-written sales letters and various text ads. But for the most part, you’re on your own to build your own unique marketing approach. The best affiliate marketers are those who create content rich websites and promote targeted affiliate products through honest, interesting editorial. Your referral links point back to the main company/product website; not to your own cookie-cutter page with your name or anything like that on it. If a customer needs support, has questions, or even wants a refund, the company / product owner handles all that. You just make the referral and collect your commission on the sale.
OK, that’s it for my affiliate marketing versus mlm/network marketing rant. I’ve said my piece, and now I’m going back to work on my new SBI! website.
I’d love to hear from you on this topic. Do you agree, disagree, couldn’t care less? Please leave a comment!
December 12th, 2006 at 4:32 pm
Very interesting post Dave, thanks for clarifying the difference for me. At one point I decided to investigate the whole MLM thing, so I participated in a couple of conference calls. I know what you mean about the southern accents
December 12th, 2006 at 4:47 pm
Whew! Thanks Alex! At least you confirmed my suspicion about those southern mlm’ers.
December 14th, 2006 at 11:04 am
brother dave, brother dave: i, too, thank u for a very interesting, well-thought-out commentary on MLMs vs. AFFILIATEs. you share some excellent points. as an MLMer myself, i’d like to submit that one of your points is RIGHT ON TARGET and I AM ONE who has been treated like the “3-headed 4-eyed alien” SPECIFICALLY for “venturing out on my own to develop my own marketing idea”… long story short, i have come to learn from direct experience that people either WANT IT or they DON’T. period. and so in my case, the network of women i am in partnership with have joined together knowing that our success depends on reaching only those people who are unhappy enough with their current situation and believe they deserve to live their dream. we know that network marketing is not for everyone and only a select group of women with true leadership quality will be able to effectively participate in a downline build structure of this type. [side note: Downline build is so “MLM-ishy)” that we choose to call it TEAMBUILDING]. now, if you see that as a fabrication of truth, you’re wrong because along with that change of terminology, we CONSCIOUSLY DO NOT CHANNEL ANY ENERGY to manipulate and coerce with a bunch of “scripted” hype. Instead we invite people to come hang out with us in a party atmosphere, based on the theme, “take time out and do some relaxing things for youself.” we allow people to informally hear about and sample the products that we stand behind and then let folks search within themselves to determine who they are and then simply let us know. the typical result of such premise is a “win-win” scenario because we either stumble upon a LEADER or a CUSTOMER. can’t lose with either one… also, an important thing that makes us different is we represent two products that are truly good ones. the “positive results” reputation and “company solidarity” is what makes my two MLM businesses stronger and better than most. you gotta come check us out real soon and allow one of the best massage therapist in toledo “lay it on you!” i’ll let you know when we have a party that includes the men we love! i also wanted to take this opportunity!
to say thanks for sharing the “monumental” amount of information here… the value of what you share is PRICELESS! we need to do one of those mastercard commercials 
…. love ya dave!
December 14th, 2006 at 1:13 pm
Hi Joie! Thanks for commenting, but based on the amount you typed, you might want to think about applying for an ISBN number! LOL - just kidding!
It sounds like you are definitely going about mlm the right way. I also know the two companies you are involved with are probably exceptions to my rant because they are product-focused and not run like the typical mlm.
Keep up the good fight, and let’s keep in touch. Let me know when you’re going to have one of those “man friendly” parties - I’d love to come. And I DEFINITELY want that massage!
(For those of you who don’t know, Joie is the “x-coworker” I was talking about in my original post.)
March 30th, 2007 at 4:49 pm
MLM is more common among southerners because they are generally more sociable, more trusting, more naive, more gullible, less pretentious, etc. These make good prospects… and good mlm’ers.