The Internet offers a plethora of exciting money generation ventures today that it can be quite confusing for ordinary consumers who may want to jump onto certain bandwagons. There is the very popular affiliate marketing as well as the well established multilevel marketing venture that draws thousands of consumers to enjoy generating extra income at their own time and pace.
Although both are online business opportunities, there are certain obvious differences between affiliate marketing and MLM.
Understanding Affiliate Marketing
Individuals who want to consider joining affiliate programs must first understand what it is first; the concept and process must be clear with an identification of potential products or services to kick start the online business venture.
Firstly, these individuals are known as affiliate marketers who need not fork out any capital to indulge into this business opportunity on the web. There are no products to purchase to incur any cost or capital. This is one of the main reasons affiliate marketing is so popular. No investment is necessary to enjoy quick returns if the right marketing strategy is adopted.
Secondly, affiliate marketing is very attractive without any startup cost. Little technology skills and knowledge is required with no programming necessary. Thirdly, the commissions earned by affiliate marketers can be very lucrative depending on how diligent the marketers work and the offer rates by merchants or affiliate networks.
Fourthly, different affiliate programs offer different commission rates and payment conditions where a higher commission is accorded if the program promotes products and encourage sales of these products.
Fifthly, different affiliate networks offer different down-line schemes which allow affiliates to promote the sales of products with recruiting new affiliates under their supervision. These may be limited to a couple of tiers to prevent over-dependency of top affiliates on the lower ranks.
Some affiliate programs are very easy to execute with simple terms to satisfy. It could be just introducing potential leads to the merchants to receive commission. The more potential leads supplied, the higher the commission received by the affiliate marketer.
The sixth tip on affiliate marketing is that the affiliate does not need to be concerned about sales or customer services besides supplying potential leads to the merchant whose company handles all backend operations including customer follow up and service.
Many affiliate programs are easy to execute as there is no intense interaction between affiliates and customers. Hence, there is no need to know the customers personally, especially where potential leads are to be forwarded directly to the affiliate merchant for further processing. Potential leads could derive from the affiliate marketer’s own point of contact or via the affiliate website that provides irresistible offers in exchange of the web visitors’ email address or opt-in decision.
Last but not least, affiliate marketers may find different degrees of challenge in different affiliate programs in the market depending on their choice of programs and terms of offer. There may be certain restrictions imposed on affiliate marketers to comply with the system payment and operations.
Understanding Multilevel Marketing (MLM)
On the other hand, multilevel marketing has been well established over the years with a large number of marketers known as resellers. They are also called multilevel marketers who not only buy and sell merchant products, but also recruit others to do likewise in unlimited tiers.
Firstly, resellers are obliged to make a certain purchase volume, which is the minimal quantity imposed by operating merchants to qualify for earnings. Payment computation is executed according to the reseller’s tier in the company hierarchy.
Secondly, resellers in MLM are allowed to choose the products to be sold for a wide range of available products from the company. Any resale of the product is the earning for the reseller minus the cost. Resellers may choose to make product purchases for their personal consumption.
Thirdly, MLM organizations practice a membership structure with tiers to position every reseller in generating handsome incomes. A reseller may recruit new marketers to be their down-lines for a commission percentage from every sale made. These sales are known as second-tier sales, which spike up the earnings of the up-line reseller. Hence, a reseller can gain higher earnings with deeper tier recruitments. But the necessary training and service must be provided to their down-lines to ensure sustainability and profitability.
Fourthly, MLM marketers have more processes to undertake from purchase orders to sales and recruitment. But they would be trained from executive administrators before commencing the marketing program independently. There is often a well setup structure with strong administrative services to support every MLM reseller.
Fifthly, resellers may need to schedule their time wisely throughout the week to meet potential customers who may also be recruited into the system. Hence, it is common to have appointments in the evenings and weekends when consumers are free to attend to these business visits. Interested individuals with MLM business opportunities may be invited to seminars or conferences to understand the whole system and concepts better before venturing into it on a serious note. Part-time and full time employment is possible.
The sixth difference between affiliate marketing and MLM is the deeper relations resellers enjoy with their customers as this improves sales and profits for resellers. This is necessary to facilitate product training and down line motivation for successful lower tier resellers. Moreover, a personal touch is administered by MLM resellers to connect with their down-line resellers, and provide the necessary customer support in pushing sales, which in turn boost the personal earnings of up-line resellers.
Last but not least, MLM resellers are allowed to set their prices on their chosen products unlike affiliate programs with fixed price products. MLM resellers may choose to offer customers lower pricing on their products to attract more sales or interest individuals to become down line resellers. It is possible to have different MLM resellers competing against each other, especially among different groups to garner more sales.
Conclusion
Affiliate marketing differs from MLM, although both offer exciting business opportunities via the latest technologies. It is up to individual marketers to compare and decide which option is more suitable to their indulgence.
