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What Is The Difference Between Affiliate Marketing And MLM?

Dec 24, 2007
Affiliate marketing works very well in these years that it benefits both the advertisers and publishers. As a result, some skeptical people start trying to compare affiliate marketing with multi-level marketing (MLM).

First of all, let us take a brief review on multi-level marketing. Multi-level marketing is also known as pyramid scheme. In fact, pyramid schemes are illegal traditionally. The schemes continuously sign up new members to promote products which do not exist. People at the top of the pyramid will make a lot of money by collecting the commissions of the sales by people at the bottom of the pyramid.

As a consequence, unless you are the people who are at the top of the pyramid, you will not really make a lot of money. To be honest, if you are at the bottom of the pyramid, you will only be making money for the people on the top.

Affiliate marketing is in fact different from multi-level marketing. Of course there is something called multi-tier affiliate marketing but the notion of this is not identical to multi-level marketing. In multi-tier affiliate marketing, the second of third tier are actually promoting the real products of the advertisers. The final consumers or customers are still get the real products. The first-tier is only getting part of the sales of the second or third tier as a bonus of referring new members to the affiliate programs.

Of course you may think that finally the advertisers are making most money and they are just like the people who are at the top of the pyramid in multi-level marketing. This is true but the advertiser should not be considered the one at the upper part of the pyramid. Affiliates are selling real products to the customers and the advertisers earn the most because they are the one who provide the products or services. However, in multi-level marketing, there is virtually there is no end users and since the members are also the people who are purchasing the "products", which are, as discussed before, not actually existing.

Newbies to multi-tier affiliate marketing may feel confusing and they may not be able to tell the difference between multi-tier affiliate and multi-level marketing. This is very true that they can be seemed very similar. However, they are totally different in nature. It has to be very clear that the latter is usually illegal while the former is an effective way of internet marketing.
About the Author
Jerry Leung is an author. He shares a List of Affiliate Programs. He also runs a blog concerning Making Money with Paid Survey. You can also find Website Analysis Tools from his website.
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