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getagrip
Joined: 20 Feb 2006
Posts: 1817
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# Posted: 25 Aug 2009 15:23 · Edited by: getagrip
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For years, multilevel marketing was an easy way to get your own "business" started. All you had to do was pay a sign up fee to join the multilevel marketing company, start going to hotel meetings to learn more about the multilevel marketing company, start talking to your friends, family, or perfect strangers into joining, and "poof", you would be rich!
Unfortunately, many people who joined multilevel marketing found out it was not as easy as it seemed. They quickly discovered that not only were people not interested in joining their multilevel marketing company, but they were driving their friends and family away by always trying to get them to join their multilevel marketing company.
Since they couldn't get any of their friends and family to join their multilevel marketing company, some of them went door to door to try to sell products for the multilevel marketing company. What they found was that many people never heard of the products they were selling, or, if they were interested in the products they were selling, they slammed the door in their faces when they discovered that the products were twice as expensive as those that were available at the local grocery store.
In the end, many of the people who joined the multilevel marketing company made no money trying to sell products, lost money on sign up fees for joining the multilevel marketing company, lost a few friends, and were left with a bunch of useless products that no one
wanted...so much for the business "opportunity".
If you have ever been part of a multilevel marketing company, you can probably relate to some of the things I've written about. If you join a multilevel marketing company, you usually go though a process that looks something like this:
1. Pay money to join the multilevel marketing company.
2. Recruit people to pay money to join the multilevel marketing company.
3. Buy the products of the multilevel marketing company for personal use.
4. Try and sell the products of the multilevel marketing company.
In short, you pay money to become a salesperson for BOTH the multilevel marketing company and their products, AND to buy the products for your own personal use. The multilevel marketing company is able to make money off of you in five ways:
1. The multilevel marketing company makes money off of your sign up fees.
2. The multilevel marketing company makes money when you recruit new members to join because they also pay a sign up fee.
3. The multilevel marketing company makes money off of you when you buy their products for personal use.
4. The multilevel marketing company makes money off you when other people you recruit also buy products for personal use.
5. The multilevel marketing company makes money off you when you and the people you recruit sell their products.
Ironically, the multilevel marketing company doesn't really need you to sell any of their products, because if they can get you to buy their products for personal use, and recruit new members to pay sign up fees to become loyal users of their products, to recruit even more people to pay sign up fees and purchase their products, they are going to make a pretty hefty profit.
It is not uncommon for some multilevel marketing companies to charge $150 for new member sign up fees. In one case, my friend tried to recruit me to join her multilevel marketing company that had a $500 sign up fee. The product that she was selling was a
multivitamin that cost about $4 a day!
Are all multilevel marketing companies bad? No. There are some good multilevel marketing companies out there, that sell great products, and these companies have very low sign up fees. Avon is a great example - last I checked, their sign up fee was about $10, and they have a high quality product with a high demand. So, if you are going to join a multilevel marketing company, I would suggest finding one with a very low sign up fee, that offers a high quality product with a good reputation.
Now, I'm going to contrast multilevel marketing with affiliate marketing. Some people think that they are the same, but there are some huge differences.
1. You do not have to pay money to make money as an affiliate. There are hundreds of thousands of affiliate products you can promote, and you will NEVER have to pay a dime to promote them. Ever heard of eBay? Amazon? Target? These are just a few examples - all of these companies pay affiliates for sales they generate. The affiliates NEVER have to pay these companies any money to promote their products.
It is true that in some cases, there are affiliate products that have membership fee and require you to become a member before they will allow you to promote their products, but these cases are very rare, and there are always alternative affiliate products you can
find instead if you don't want to join them.
Additionally, if you do join these membership sites, they offer something of value to you, such as teaching you how to become a more effective internet marketer, but again, joining these kinds of membership sites is totally optional, and many affiliate marketers are able to earn money by promoting other kinds of affiliate products without ever joining them.
2. The emphasis on affiliate programs is not on recruiting new members to join the affiliate program. For example, you can find a company that sells vitamins and pays their affiliates a 20% commission on all vitamin sales you generate. You don't have to pay a fee to promote their products, and you don't have to find other affiliates to pay a fee to also promote the vitamin company's affiliate program.
Technically most multilevel marketing companies absolutely don't require you to recruit new members, but your commissions are often limited to lower dollar amounts, unless you can bring in more people to the company. However, even if they don't require you to recruit new members, you are often encouraged to do so, and many of the meetings you attend for the multilevel marketing companies are all about recruiting new members to the
company.
3. You do not have to purchase affiliate products to earn money from them. For instance, I own a website that promotes mountain bikes via the eBay affiliate program. I don't have to buy a bunch of mountain bikes, and I didn't have to pay a fee to eBay to "earn" the "right" to promote mountain bikes from my website. Rather, my job as an affiliate marketer in this case is to research mountain bikes, create content, and to send targeted traffic to eBay so that the traffic will convert into mountain bike sales, so that I can earn commissions.
4. Affiliate marketing offers more flexibility than multilevel marketing. With most multilevel marketing companies, you are usually limited to selling a small number of products from only one niche. For example, it might be skin care or vitamins, but what if you want to promote mountain bikes? Or car loans? Or home owners insurance? Or fishing boats? Or chicken coups? Or laptop computers? Or weight loss books? As you can see, affiliate marketing gives you endless possibilities - yes, there really are affiliates earning money with chicken coup related affiliate programs!
It is true that some multilevel marketing programs give you more options than just "skin care" or "vitamins", through things like online malls, or different product venues. However, what if there are other websites offering similar products at lower prices? For example, can your online mall compete with Walmart.com? If not, then there is a Walmart.com affiliate out there somewhere who is earning money that you, as a multilevel marketer, are not, for the same product that you are offering.
The other thing you need to realize is that there are affiliate programs that will pay you a much higher commission than your multilevel marketing company will. In one case, I was involved with a multilevel marketing company that offered web hosting - and my commission for any sales I generated was $6. Well, I regret to inform you that I didn't make any web hosting sales for that multilevel marketing company. However, as an affiliate for web hosting, I've been able to earn commissions of $100 dollars for every web hosting sale I've generated, and I didn't have to pay any money to the web hosting company to become their affiliate!
These are just some of the things that separate affiliate marketing from multilevel marketing companies. Again, I do think there are some good multilevel marketing companies out there, but I think they are few and far between, and in the beginning of this article, I've stated the reasons I stay away from most of them.
Is affiliate marketing easy? No. Is it for everyone? No. However, it offers a ton of flexibility, the earning potential is incredible, and you do not absolutely need to invest a dime to get started, which is not the case for 99% of multilevel marketing companies. Of course, it does help some affiliates to invest in a training course, which is what I did to help me along the way, but again, that is totally up to you, and 100% optional...
If you are part of a multilevel marketing company that offers very low sign up fees, a quality product, a great commissions without you having to recruit others, and you are doing well with it, awesome - I'm very happy for you. If, however, you are tired of recruiting new members, going to hotel meetings, buying over priced products that you don't need, and pushing your friends and family away in the process, I'd highly suggest that you consider giving affiliate marketing a shot. I'm not going to guarantee that you will be successful, but I will guarantee that if you are successful, it will be one of th best decisions that you have ever made. 
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mountainmom5
Joined: 30 Aug 2007
Posts: 1812
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# Posted: 26 Aug 2009 10:15
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Very well said! (and I totally agree... there is a new wave of multilevel marketing sweeping our small town area and I am so glad I have been there, done that as they make it sound so good, I would probably jump on the band wagon... )
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Matt Zenittini
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Joined: 16 Jan 2009
Posts: 156
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# Posted: 26 Aug 2009 10:39 · Edited by: Matt Zenittini
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mountainmom5: I would probably jump on the band wagon
That's what makes it work!  .
Great Post Keith.
Matt
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Newbie Shield
Joined: 22 Sep 2007
Posts: 2114
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# Posted: 26 Aug 2009 11:07
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Hi Keith,
Nicely put.
~Newbie Shield~
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mountainmom5
Joined: 30 Aug 2007
Posts: 1812
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# Posted: 26 Aug 2009 11:09
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Matt Zenittini: That's what makes it work!
Yup, I agree!!
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A8ch
Joined: 24 Jun 2005
Posts: 582
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# Posted: 26 Aug 2009 12:08
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Hey Keith,
Ever considered publishing a hard cover book?
Your brief critique and comparison of MLM and AM was absorbing, insightful and accurate. Your arguments were compelling, clearly stated and delivered in the relaxed, matter-of-fact tone of someone who thoroughly understands the subject matter.
Even the visual presentation was attractive.
Does the title "Keith Riffle, #1 Best Selling Author" appeal to you?
Great post!
Hermas
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getagrip
Joined: 20 Feb 2006
Posts: 1817
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# Posted: 26 Aug 2009 14:43
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Wow, I thought there would be more contriversy! LOL
I think, Hermas, that I'm going to title my hard cover book:
"I Know More Than You"
I'll re-write the sequel and call it:
"I Still Know More Than You".
Just kidding. LOL
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Matt Zenittini
Member
Joined: 16 Jan 2009
Posts: 156
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# Posted: 26 Aug 2009 14:58
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getagrip: Wow, I thought there would be more contriversy! LOL
Noooo lol. I feel like one of the few MLMers here haha.
Plus we covered that in our last thread .
Also, pretty much everything you stated was true.
With the exception that.
I don't fit the stereo type of going to hotel meetings and recruiting friends, family etc.
Some teams (as ours did) are doing things online now. To avoid those hassles.
However...
Most do =].
Nice post.
Matt
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getagrip
Joined: 20 Feb 2006
Posts: 1817
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# Posted: 26 Aug 2009 15:32
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I think less MLMs do the hotel thing, but they are not uncommon. Not long ago, I had two friends involved with MLMs that invited me to watch their MLM guru speak. "I wonder" what they were going to speak about? Any guesses? LOL
A friend and I were joking that going to an MLM conference might be a good way to meet girls. I mean, if you meet a girl who is part of the MLM, she is going to try and talk you into joining, which means you can get her undivided attention.
So, as she is talking to you about her MLM, you can just change the subject to learn more about her, and when she switches the subject back to talking about her MLM, you can just change the subject again to getting to know her. LOL
The only problem is, even if you start getting to know each other, there is that age old question that is always going to be on your mind:
"Does she like me or does she just want me to join her MLM?"
Of course, in her mind, the question might be more like:
"Does he want to join my MLM, or is he just trying to get a date?"
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Matt Zenittini
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Joined: 16 Jan 2009
Posts: 156
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# Posted: 26 Aug 2009 15:53
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LOL nice.
I know you ran into that from personal experience .
I did the hotel meetings before... They even charge you to get in.. yuck.
If the MLM tries to recruit you that way. RUN.
Far and fast.
Don't look back.
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happywife
Joined: 14 Aug 2007
Posts: 1066
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# Posted: 26 Aug 2009 18:33
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Hi Keith,
Nice article. It's a good comparison of the differences between many MLM companies and affiliate marketing. I do both and enjoy both.
Fortunately, I don't have any previous nasty MLM experience so it's all been good for me. I happened to get involved with one of the "good" MLM's.
They only charge $15 to join, but it's free if you make a first purchase of about $50 which I was doing anyway, so that was a boon.
I did actually attend an infamous "hotel meeting" for the first time in May, but it was all paid for by the company and turned out to be not a RAH, RAH business building meeting, but an information packed meeting on the products, which was exactly what I was hoping for - I wanted to know more about the benefits of the products so I could recommend them appropriately to my site visitors.
Like Matt, I do almost all of my MLM promotion online via my health related website. After the first few months of product usage (money out of my pocket), my product sales more than cover my personal usage costs, so I'm always in the black.
I'm not big on pushing the products on friends and family unless they ask me about them. Even then, I tend to end up purchasing what I think they need and giving it them as a gift. 
I'm not working on being a "business builder" trying to create a "downline" at this point. I'm just using it as a way to help people who are looking for natural answers to various health issues.
On my website I combine both my MLM products and my affiliate products - depending on the needs of the visitor.
I've become a fan of both methods of marketing when done appropriately and with other people's best interests in mind.
I've had bad experiences with unscrupulous affiliate companies, too, so no one is lily-white, I suppose. It's just important to understand what it is you are getting into and what to expect.
As you said, there's good and bad in the various MLM companies. Each person should do their research before jumping on that band wagon MM5 mentioned.
I'd also recommend people start out with affiliate marketing as there is no monthly purchase requirements for yourself. It makes it easier and without as much pressure.
I suppose if you are already using a product and continue to do so regardless of the marketing side of things (like most of my customers), that's when it would make more sense to consider working that particular MLM as a business.
Good, thought provoking stuff!
Blessings,
Angie
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Vishal P. Rao
Joined: 23 Jun 2005
Posts: 995
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# Posted: 27 Aug 2009 01:21
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A8ch: Ever considered publishing a hard cover book? Your brief critique and comparison of MLM and AM was absorbing, insightful and accurate. Your arguments were compelling, clearly stated and delivered in the relaxed, matter-of-fact tone of someone who thoroughly understands the subject matter. Even the visual presentation was attractive. Does the title "Keith Riffle, #1 Best Selling Author" appeal to you?
And who better than Hermas to write a foreword for the book.!
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