Top 7 Differences Between Affiliate Marketing And MLM

Are you confused between affiliate marketing and multilevel marketing? How does each work? These ways of making money are actually different from each other, so do not get them mixed up!

Affiliate Marketing

1) People who join affiliate programs and sell products or leads for these companies are known as affiliates.

2) Affiliates do not need to buy products first before they can promote them, so its basically zero cost to start.

3) If the products affiliates promote results in any sales, they will earn a certain percentage of the selling price.

4) Some affiliate companies have a downline scheme for their affiliates, but not all do. This means they can promote their products, as well as recruit new affiliates to work for them. But even if they do, it is usually limited to the second tier only.

5) Affiliates have it easy in terms of order fulfilment as their main job is to bring the potential customer to the affiliate company's website. If this results in sale, the company handles the backend details, like processing the order, shipping the product, and customer service. The affiliate pockets the commissions once the customer makes the payment for the product. As easy as 1-2-3!

6) Because of their unique position as the middlemen, sometimes affiliates do not know their customers personally. The customer could be someone who has found the affiliate's webpage or recommendation through search engines. But with current tracking services and promotions through their own email marketing list, it has now become easier for affiliates to know who their customer is. This is important as the affiliate can follow up and promote other related products to the same customer for repeated sales.

7) Affiliate merchants often set their products at the same price. Every affiliate, whether newbie or super affiliate, has to sell them at the same price. They cannot undercut the price themselves as the payment processor is generic for all. However, they can provide bonus products or services of their own to attract more sales.

Multilevel Marketing (MLM)

1) People who join MLM programs are known as resellers or multilevel marketers.

2) Resellers usually have to buy a minimal quantity of the products they market to qualify for their earnings, according to their tier in the MLM company.

3) If resellers manage to sell their product, they can keep the full proceeds of the sales.

4) Usually all MLM companies have a membership structure where an existing reseller can recruit new marketers under their wing and earn a percentage of commissions out of their second-tier sales. The longer they build their downline, the more they will benefit.

5) Multilevel marketers often have to handle the order process themselves as they sell and deal directly with their customers. They might need a car to visit their customers, and deliver their products, and if necessary, address the concerns of the customer personally.

6) As MLM resellers know who their customers is, they have a personal relationship with them, which can be an advantage as they can provide more customer support and follow up. If the customer is happy and comfortable with them, they might buy their MLM products repeatedly.

7) MLM resellers can set their own prices about the products if necessary to attract sales. Competition often leads to lower prices though, and undercutting is not a long term solution. Win your competitor by providing a personalised customer relationship instead!

I hope after reading this article, it would have cleared most of your doubts with regards to affiliate marketing and MLM. Decide where you interest lies and find a suitable program to start with. I chose the affiliate marketing route, how about you? To find out how you can make money online with affiliate marketing, remember to download this free ebook for tips on how to get started!


Authored By:
Angela Tay