What is the difference between network marketing (MLM) and affiliate marketing?

I've wanted to write an article about this for some time. I worked for an MLM for two years. If I wrote it then it meant PR would have to review every word. That didn't appeal to me.

MLMs don't usually facilitate doing business online. Instead they offer online business-building tools (which cost an extra fee). In MLM you often pay for information on how to run your business.

In essence distributors can be like affiliates who would help leverage a brand online.
At the MLM I worked for, distributors sold online with some success, but often they already had big downlines. They usually didn't sell product, they sold a dream, a dream of becoming rich. A dream of freedom to own your own business. Affiliate marketing shares the same dream but the way it happens is very different.

I found Jay Weintraub's blog with a great article on the subject.

To me the biggest differences are:

• Loyalty. Affiliates don't have to become customers of companies they represent. They can represent many different companies, even direct competitors. MLMs usually require that you purchase product from them every month.
• MLMs market to their own distributors. As an affiliate the merchants I represent don't try to get me to purchase product or services from them.
• Distributors handle customer service and manage their downlines. Affiliates often don't interface with customers and don't provide customer service. That is left to the merchants.

This is getting long, so I will continue on another page…

• Image. People don't know what affiliates do. The biggest image problem we have is that people think we're a bunch of nerds (which is mostly true). If you know Amway is at your door, you don't open it.
• Distributors don't normally make money off product, they make it signing up new distributors. Affiliate marketers don't need to manage and motivate people.
• It's always free to sign up as an affiliate, and there's no obligation. MLMs have a sign up fee. You have to formally end the relationship or you will be billed for product.
• The business model for being an affiliate is much more straightforward. You make a commission when someone clicks on a link on your site, goes to a merchant site, and buys something. An MLM business is complicated and difficult to manage with different payouts and tiers depending on a variety of factors.
• Very few MLM distributors make a lot of money. Usually just a few at the top with extensive downlines. Most affiliates can make money and they don't have to spend a lot to do it.
• Affiliates aren't encouraged to build a downline (though affiliates do have sub-affiliates, it's usually not multi-tiered).
• Affiliates market online but MLMs contact people offline. With MLM, anyone they know or talk to is a potential customer (which doesn't go over well with people who don't appreciate that you're only motive is to try to make money off of them).

I thought of being an affiliate of a bunch of noni products and also become an online distributor. I'd sell the products I like and if someone joined my downline, it would be only online marketing. I'd teach them internet marketing techniques. Most of the content online is very biased.

I know a lot about noni. I know the holes that I could do better as an affiliate or outside of the company. I have so much quality content in my head. Few noni companies have affiliate programs. The ones that do aren't very good.

The MLM industry is often behind on internet marketing in general. Avon is an exception. They're pretty progressive. They even have an affiliate program.

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