Has affiliate marketing ruined the MLM Industry?
Before I get too deep into this topic, I should explain the difference between affiliate marketing and network marketing, so you have a clear understanding.
Affiliate marketing is when you promote another company’s product or service, and earn a commission for doing so. You get your own unique URL (link) and promote it online or offline. Whenever someone makes a purchase through your unique affiliate link, you earn a commission.
An example of affiliate marketing would be Amazon’s affiliate program.
Network marketing is much different than affiliate marketing. Network marketing is when you work with a company as an independent contractor, to promote a product or service (like an affiliate marketer does). In addition to selling the products yourself, you can also refer others (who sell products and refer others) and earn overrides and commissions on their sales.
Making money in affiliate marketing is based on your own personal production, whereas your income in network marketing is based upon your team’s production. With network marketing you have leverage. With affiliate marketing you don’t.
Has Affiliate Marketing Ruined the MLM Industry?
Here are some trends I’ve noticed online.
# 1 When you look at network marketers trying to promote their business online, many of them are focused on selling their leads, system and training, rather than actually growing their network marketing business. An example would be My Lead System Pro.
# 2 Because there are so many make money online opportunities you see lots of reps chasing shiny objects. Just to put things in perspective, when you go on Facebook, social media, the search engines, or even check your email, you are exposed to tons of different make money online opportunities. The promise of fast and easy money lures many people to jump from opportunity to opportunity every few weeks or every few months.
# 3 Due to the high attrition in the network marketing industry, many top leaders have left the industry for good, to focus on “make money online” programs that pay large commissions per sale. These are frequently referred to as Top Tier programs and Get Paid Today programs.
# 4 For select people with a certain skill-set, affiliate marketing is much more lucrative than network marketing, because you don’t have to babysit, teach, coach, train or motivate others. You can just focus on what you are good at and make great money without any of the headaches.
Should You Do Affiliate Marketing & MLM Together?
This seems to be the million dollar question. For most people, my immediate answer is NO. I say that because it’s next to impossible to focus on two things at once and be successful at both. With that being said, here are the pros and cons of doing both at the same time.
- Create Multiple Streams of Income – All businesses should have multiple streams of income (as I see it). When you have all of your income tied to one income stream, you are really putting yourself in a bad situation. If one thing goes wrong you could lose everything.
- Earn Immediate Commissions in Your Business – For most people, it takes three to five years of consistent work to build up a nice income in network marketing. When you promote affiliate products first, you can start earning $50, $100 and $500+ commissions right from day one. It simply won’t take as long to build up a nice affiliate income as it does an MLM Income.
- Make Money from People Who Tell You NO – Most people you approach will tell you NO to your business opportunity. They simply aren’t interested in what you are offering them (for whatever reason). But, if you specialize in the picks and shovels (tools, leads, and systems) you would have more potential customers. Everyone in our industry needs leads, systems and training for their business, but not everyone needs a new business opportunity.
- Less Rejection & Easier to Sell – This goes hand in hand with the previous tip. When you sell picks and shovels you get less rejection. Plus, tools are easier to sell than opportunities.
- More Profitable – In many cases, promoting affiliate products is much more profitable than promoting a MLM Company. I’ve made more money selling affiliate products to other network marketers than I ever have building a downline (although both methods have been very good to me).
- Distracts You from Your Primary MLM Company – The major downside of promoting affiliate products along with your MLM Company is that it DISTRACTS you. You get so focused on selling multiple things that you lose sight of the big picture. I believe the income potential in network marketing itself is much greater than affiliate marketing, because you can leverage yourself through other people. When you try to do too many things at once you lose your FOCUS and dilute your efforts. It’s easier to promote one program than five different affiliate products.
- Causes Many Distributors to Get Terminated from Their MLM Company – Just about every MLM Company I know of has a non-compete clause in the distributor agreement. This means you can’t participate in other money-making schemes, promote affiliate products or join multiple network marketing companies. As a result, many distributors get terminated from their MLM Company for breaking these rules. This really sucks, especially if you’ve been busy building a big team.
- Causes Many Distributors to Jump to the Next Hottest Thing – Another con I see about promoting affiliate products with your MLM Company is that it causes many distributors to jump ship. In addition, I’ve never seen more top earners jump from company to company so much, as I have during the past five years. Normally, most successful distributors stay with one company 10 to 20 or more years. Not so anymore.
What Should You Do?
Here is what I suggest you do. First off, if making money online is your # 1 goal, I would go with affiliate marketing over network marketing. Keep in mind, there is a steep learning curve. It’s not easy. You’ll have to learn SEO, social media, paid advertising, list building, email marketing, etc. It’s probably going to take you minimum five years to master these things.
However, if you are good at internet marketing, the sky is the limit, and you won’t have the headaches of trying to manage a team of distributors. You can focus on your own personal production and be successful.
However, if your big goal is to create a leveraged, residual income, I would pick network marketing. I think the potential of network marketing is at least ten times better than affiliate marketing. Just like affiliate marketing, network marketing requires a learning curve. For most folks, it’s going to take at least five years to master your skills.
If you pick network marketing, but want to build your business online, I suggest you find a network marketing company that you love AND one that has friendly internet marketing policies.
Focus on promoting your MLM Company online. If you happen to find a few useful business tools that offer an affiliate program, by all means share your affiliate products with people who would benefit from using them. Just keep your main focus on promoting your opportunity.
Has affiliate marketing ruined the MLM Industry? I don’t think its ruined the industry, but it’s definitely had a huge impact on our industry. As the internet continues to grow and evolve, I see this trend continuing for many years to come.
In addition, both network marketing and affiliate marketing can be VERY lucrative, once you build up your skill-set. Neither business model is fast, free or easy money. Both require a steep learning curve. Most people who join either industry FAIL, but the people who figure it out and do well make great incomes. Individual results will always vary.
What are your thoughts? Do you think affiliate marketing has affected the MLM Industry? If so, please tell us how. Just leave a comment below to let me know what you think. I look forward to hearing from you.