The uninitiated often compare Affiliate Marketing to Multi Level Marketing (MLM) (also known as ‘Network Marketing’) this is largely due to a lack of understanding of how the two very different businesses work. I’ll try here to explain in layman’s terms the obvious differences between the two. 

MLM is a tiered network of distributors, who associate with a parent company as independent contractors. Compensation is based on their sales of the companies products or services, as well as the sales achieved by those they bring into the business, each distributor being expected to recruit others the business. Those recruited are known as the downline.

Affiliate marketing is a method of promoting internet businesses in which affiliates are rewarded for every visitor, subscriber, customer, and / or sale provided through their efforts. Compensation or commission may be made based on a certain value for each exposure (CPM), visit (Pay per click), registrant or new customer (Pay per lead), sale (often a percentage, Pay per sale or revenue share), or any combination of them.

Affiliates are not required to bring others into the business to make a living; although some affiliate programmes do have a second tier income from this is usually very small. On the other hand in MLM you need to and are expected to have your downline selling in order to make the decent money.

In an MLM business you are required to buy products from the person above you (your upline) and sell those products to the general public and your downline. The Affiliate’s job is to refer customers to the internet business they promote, the Affiliate doesn’t sell anything, its all about refferal and presell. 

I hope that in writing this I’ve dispelled some myths about Affiliate Marketing for those who in the past have been inclined to compare the two. 

This article is based in part on the definitions of Affiliate Marketing and MLM in Wikipedia. 

http://en.wikipedia.org/wiki/Affiliate_marketing

http://en.wikipedia.org/wiki/Multi-level_marketing

Popularity: 19% [?]

Bookmark to:

Categories: Affiliate Marketing