Welcome fellow entrepreneur,
Affiliate Marketing vs MLM. Which is best
This argument that has been around for a long time. So today we will take a look at both, and come to a descion on affiliate marketing vs mlm and see which is best.
Feel free to disagree, you can leave a comment in the comment section below.
Lets start with affiliate marketing.
If you don’t know, affiliate marketing in its online form has been around since 1994. Although the idea of revenue sharing was conceived long before the arrival of the internet.
You could say the “Father” of online affiliate marketing is William J. Tobin, who started an e-commerce site for PC Flowers and Gifts back in 1989.
Amazon for example never got going until 1996, with Amazon Associates.
The Rules Governing Affiliate Marketing.
The U.S Federal Trade Commission published guidelines for affiliate marketing in 2000 with regards to disclosures. The regulations of “Dot Com Disclosures:
Information about Online Advertising” drastically influenced the legitimacy of affiliate marketing in the world of online marketing.
The legislation was updated in 2008 which requires bloggers to disclose their relationship with the companies they are promoting.
Since then additional rules have been imposed regarding privacy, particularly with email and tracking software.
However it is nowhere near as complicated as the media is making it out to be.
With that said, it is very important that you make certain that you’re reading the rules associated with your individual affiliate network when it comes to proper cookie use.
The Business Model. How does Affiliate Marketing Work.
There is no requirement to outlay any money for products.
Essentially the merchant pays you a referral commission on the sale of a product bought from your website.
The amount you receive is a percentage of the product value. More on this below.
As an Affiliate you are the publisher. You have a blog and you write content. You write about things that interest you. It could be travel, photography, fitness, cars… anything.
If it sounds like work then… yes, but think about this.
- Every single thing you do online is creating content.
- Even liking a book of faces post and leaving a comment is creating content.
- Writing an email is creating content.
- Making images for Pinterest or creating infographics is creating content
- Producing YouTube videos is creating content.
To break it down a little further, no matter what your interest is, somewhere out there, there are others who share the same interests as you, and hidden among the merchants is one who has a product that you know is great.
So if you provide a little helpful information about this product, in your content and include a link to it, then you are monetarizing your content.
This can provide passive income for you, without you ever having to anything else to that blog post.
Really though you should update every now and then, but the above is the basics of affiliate marketing.
How are Referral Commissions Determined.
These vary from merchant to merchant. Much the same as in the offline world, sales commissions are a cost and built into the overall price of a product, and vary from merchant to merchant.
A common method for reputable merchants is to join an affiliate network marketing company.
This streamlines the marketing process, keeping the merchants costs to a minimum, with all the merchants under one umbrella sharing the marketing costs.
However, the commissions paid by the merchants are still determined by the merchants, but they are paid out by the Affiliate Networks, which also distributes payment to the merchant.
What is a Cookie in Affiliate Marketing.
It is a tracking code. In simple terms, an affiliate tracking cookie is a file that is created and stored on your visitor’s web browser when they click on one of your affiliate links.
Basically, this allows affiliate networks to have the ability to make certain that they can determine where sales have come from
In Affiliate Marketing if a user clicks on your affiliate link, and reaches a product but didn’t buy it at that point, then the cookies are saved in the browser of that user, which means that if that user purchases that product within the cookie period (30, 60 days for example), then you will still be paid a commission for that affiliate product.
Cookies have a expiry date, most generally expire after 30 days, but there are also 60, 90 and often longer periods of duration. Amazon (they change it often) at the moment has a 7 day cookie and E-Bay has a 24 hour cookie.
I am not sure if Amazon still has a 90 day cookie for adding to cart, they had a big shake out in 2019 /2020 slashing commissions and adding costs to vendors.
Recently, (Oct.2023) they have changed the display formats and requirements for their images, making it harder not easier. Amazon is probably not worth bothering with if you are a new affiliate.
If the user purchases that product after the cookie period ends, then you will not get commission.
How to Join an Affiliate Network
Generally they like to see a blog with some content, (30 or more articles), and the site has been established for at least 6 months.
In reality, if your site is over six months old you should have more than 30 articles.
With mainstream affiliate networks such as Awin, CB and others like, Rakuten, the application process is simple. Submit your site, and they will give a Yay or Nay in pretty short time. Before deciding on a network be sure to read their affiliate policies.
Once accepted, choose a merchant aligned with your interest(s), and the affiliate network will send your request to the merchant for approval.
Can you be an Affiliate Marketer without a Website
Of course. There are lots of alternatives. With Clickbank, you don’t really need a website at all. And there are others. Amazon, E-Bay, Live Chat, Payonner, to name a few.
Actually… here is an alphabetical list for you. (just click on Promote in the header bar). Some require a website, there are many that don’t though.
You can also do private deals. Just be sure you have a contract, and negotiate an extended cookie life. Say, 6 months or more.
While it may seem complicated, you do need to look after your interests, and check out what you are becoming involved with. One thing is for certain the affiliate network company has its interests covered.
Of course there is a lot more involved other than just writing content. SEO, Keywords, niches, how and where to add links and finding good affiliate networks.
The MLM Business Model.
I have written much on MLM’s in this blog. Essentially Multi Level Marketing is a strategy that sell products through a non salaried workforce.
Payment is by a pyramid shaped commission system.
It is also known as a referral marketing or network marketing.
The Rules Governing Multi Level Marketing.
Multi-level marketing is a diverse and varied industry, employing many different structures and methods of selling. Although there may be significant differences in how multi-level marketers sell their products or services, core consumer protection principles are applicable to every member of the industry.
You can see more At the FTC website Here.
How does Multi Level Marketing Work.
To join a MLM company you have to first sign up under a someone else selling the companies products, then outlay some money of your own for a cross section of products.
Here are some Pros and Cons of MLM.
- Companies can gain a large consumer base in a wide geographical area with multi level marketing
- It allows distributors to make extra income working their own hours.
- Lower ranked distributors tend to work harder, and earn less than ones in the upper tiers, who receive a share of lower ranked members commissions.
- Some sales people are unscrupulous, and can give a product or company a bad name.
- You may not have good customer support, should any one using products bought from you have a complaint.
- Need storage space for products
- You need a good bookkeeping system
- You will need to cover expenses for your vehicle and other promotional literature.
Often Multi Level Marketing is confused with a pyramid scheme, which are illegal.
How do you get paid with MLM
It is a commission based structure. Whereas an affiliate marketer gets a % of each product the MLM payment model is much more complicated.
If you are just reselling product you buy at distributor rates and sell at retail. However. things can get a little complicated if you sell over a certain amount, recruit others, split downlines etc;
It pays to have a complete understanding of both the product and the rules before signing up to a MLM.
Usually this will be a face to face meeting with a distributor (who could be a friend or relative), so you should feel free to ask questions.
If you are good enough to move into the higher tiers you are able to earn passive income, and this is a big drawcard for recruiting members. It is achievable with a very good product, but it still requires great effort.
Do you Need a Website to be Involved with Multi Level Marketing
Short answer is No.
However the majority of MLM’s have a website for their members, where you can download brochures and other sales literature, order forms for product, and details of your sales, earnings and position in the tree.
How do You Gain product knowledge
Unlike affiliates who will most likely know something about what they are selling, because that is a niche they have an interest in.
The MLM marketer is probably confronted with the “Next greatest thing”. So you should have access to research, and end user testimonials.
As well, you will need professionally written content or sales copy (see my ad above), which anyone serious about this as a business should read up on, to help press home the main benefits of the product.
The Winner of Affiliate Marketing vs MLM is…
Which ever way you look at it there is work involved.
The answer would be I guess which do you enjoy more. Writing content about something you like doing. Or doing a lot of salesy talk trying to convince someone, you have something they need that could make them rich.
I have a lazy streak, so will stick with affiliate marketing. A few hours doing some research and writing, and my time is my own. I don’t want to be bothered with complaints about product, delivery issues and cancellations.
“til next time
All the best from Colombia.