Once you make a decision that you want to start making money online, a lot of people look for a shortcut–a quicker way to get there. And a lot of people turn to multi level marketing. Is multi level marketing bad? This article addresses the in’s and out’s of multi level marketing and compares it to affiliate marketing. If you think you can make money with multi level marketing, read on. You might see yourself in this scenario and if not, perhaps you will be enlightened as to how it works.
What is Multi Level Marketing?
Let’s start with what is multi level marketing. It’s also been called network marketing. Many people have had someone come to their door selling beauty products, household products, etc. You’ve heard of those parties where there’s a demonstration of certain products with perhaps a prize at the end of the evening. Of course, you only qualify for that prize if you buy a certain amount of products. The person hosting that party generally receives a gift for gathering together a bunch of her friends. If she signs up as a representative for those products, she’ll get a commission off any sales from that evening. Anyone who agrees to be a representative for those products are then encouraged to sign up others to sell the products and so on and so on. Sounds like a pyramid scheme, doesn’t it?
So who’s making the money? The woman who signed up the host? Yes. The manager the representative works for? Yes. And on up through the food chain. There will be divisions of representatives and heads of those divisions will get commissions not necessarily through product sales but by the number of people those representatives get to join the club. So it becomes less and less about the product and more and more about getting people to sell the products.
Can this same methodology apply to online marketing?
Yes, it can and does. There are make money online programs that do this. You sign up for a program and are expected to recruit people to join the program. The more people you can recruit, the more money you make. The product is the program itself.
Multi Level Marketing Examples
Why is Multi Level Marketing Bad?
The more people you recruit, the more product is being sold or so the recruiter hopes. Again, the product becomes less important and the more important task is to recruit more people because in the end, that’s where the money is. So if you have a large network of people you can draw on, perhaps you can recruit a number of them to join your network. But those recruits will have to sell the product and recruit as well.
Is Multi Level Marketing Worth It?
Here’s a video that does a great job at explaining multi level marketing as well as outlining it’s similarity to pyramid schemes.
What’s The Difference Between Multi Level Marketing and Affiliate Marketing?
There’s actually quite a big difference between affiliate marketing and multi-level marketing. One of the big differences is that if you are involved with multi-level marketing, you are put under pressure to recruit people to join your program. You are then paid commissions accordingly. Affiliate marketing doesn’t work like that. You are in complete control of the products you decide to promote as well as the affiliate programs you can join. Below is a little chart I created to show you the difference.
With multi level marketing, you are limited in the number of products you can promote. Once you join a program, your choices will be limited to only those products available through their program. With affiliate marketing, you can choose any affiliate marketing program you want. You are also not limited to the number of programs you join. You can join as many as you want with various commission rates.
Is Multi Level Marketing Bad?
You really need to do your research before you get involved with any program but multi level marketing seems very limited to me in terms of the products you promote. Not to mention that you are encouraged to expand your network, i.e., recruit others to join the program which is really at the heart of multi level marketing. It’s not so much about the product as much as it’s more of a recruitment program. That, to me, is a lot of pressure especially if you are trying to promote online.
Is Multi Level Marketing a Scam?
Contrasting multi-level marketing with affiliate marketing and they are two different animals. With affiliate marketing you are in complete control of your business from the type of website you design, to the products you want to promote, to the commissions you receive from a variety of different affiliate marketing programs. There’s no recruiting other members to join. You can focus solely on building your business. All the decisions are based on what you want for your business as opposed to meeting recruitment targets. I’ll take affiliate marketing any day. Personally, I think multi level marketing is a scam because you do all the work and the company gets part of the commission for every person you recruit. So you do all the work yet you have to share your commission. No thanks!
I hope you have found this information useful. If so, please share and/or leave a comment below. I’d be happy to answer any questions you might have.
To your success!