Last Updated on November 20, 2021 by Andre
Affiliate Marketing vs. MLM. Or are they a Pyramid Scheme? Not sure which is better for you? Let’s look at what they are; the differences, so you can decide.
Are you thinking about wanting to learn how to earn online with Affiliate Marketing?
Perhaps you have had a friend or family member trying to get you to become a representative or distributor for an MLM Group.
Have you been told by your friend how you can find that luxury lifestyle by being an MLM distributor?
Have you been invited to their seminar filled with positive vibes by thousands of people present?
Did your friend invite other friends or family members there like you?
Hearing the speakers giving you their rags to riches stories and how they are now leading a luxurious lifestyle.
They are now able to pay for their houses or cars in cash, living the life they dreamed of, and one you are meant to have as well?
What about your friend who brought you there. are they living the same life as the many speakers on stage?
So how’s that working for them?
Are you worried about being caught in a Pyramid Scheme?
After reading this, you can decide which may be for you or not and how you can go forward the right way for you in the best possible way.
Let’s get started
Find out are the best options between Affiliate Marketing VS MLM.
You will also see which to avoid where you can lose more than just money.
To start, I will go in reverse order to the title; it will give you are more significant understanding of how they all fit in.
Marketing Pyramid Scheme
According to Wikipedia, the following is their translation of what a Pyramid Scheme is.
Pyramid Schemes in most countries are considered illegal, and many have shut down; some dealt with the courts or class actions.
How a Pyramid Scheme Structure looks
To give an example of how this works, let’s look at the Pyramid Scheme structure’s image.
Here you will gain an insight into how the levels within the structure work, and you will find the majority if not all Multi-Level Marketing groups operate this same way.
Some are illegal, yet some, which will be explained further below under MLM, give some twists to make them legal and get away with it, for now at least.
So to explain, at the top, you have the creator of whatever scheme they have made.
From there, they would recruit, in the example, ten people under them.
Those ten people are now required to recruit at least ten people under each other, which the next level would now become one hundred people.
The structure continues with each person’s aim to recruit ten people again to obtain the next level in 1,000 recruitment levels.
Along the way, to join, you are asked to pay upfront; the fees get distributed up the ladder right to the top.
As you can see how rich those at the top can get, but those towards the bottom areas still struggle due to the large influx of competition they face.
Basic Scam concept
The ploy is to sell the concept of making large amounts of money to get rich quickly by simply getting people to join.
Each person who joins usually pays upfront fees. Once done they are considered as your downline and you are their upline or manager.
The same process continues for them, who in turn, recruit others to become their downline but you will still get a percentage of any commissions as well because they all fall under your downline grouping(refer to the Pyramid Scheme structure image).
The process just continues.
The larger your downline of recruits gets, the richer you get (well, that is what they lead you to believe) along with those above you.
You are emotionally brainwashed into believing that you will make a fortune, and so are your family and friends.
Your job is to convince your family and friends that this is how to earn thousands or more quickly.
All they have to do is continue to recruit, rinse and repeat over and over again.
This game continues with the next group of recruiters told the exact promises of making plenty of money with little to do.
The rip-off becomes known later when no more members are signing up.
The profits start to dwindle, and eventually, the Pyramid Scheme created either collapses, is found to be a scam, or goes bust.
Eventually, it is closed down by the creator(s), leaving them with Millions while those at the bottom with nothing to show but their losses to a scam.
Worse still, there have been losses of friendship and family distancing themselves due to this problem.
Many have lost money falling to these rip-off artists and why it has become illegal to have such an operation.
Pyramid Scheme Summary
Most Pyramid Schemes rely on profiting from others along the chain.
Members are required to pay upfront costs to join under pretences.
There are often no products to sell, just the enticement to state this is a great way to earn large amounts of money.
Some may have products to sell, but they are always way overpriced, of poor quality, and almost impossible to sell.
Some are just propaganda pamphlets that you may also need to pay with nothing but rubbish and false promises within them.
The hidden agenda is to earn a lot of money and have that rich lifestyle; you need to recruit more.
Other Types of Pyramid Schemes
There are other forms of Pyramid Schemes such as Chain mail and what is known as the Ponzi scheme, which you can read more about here.
Over the years, a lot has been closed down by the FTC.
Some have closed their operation and disappeared, while those caught out are ordered by authorities to repay those they ripped off.
They are unethical, dangerous, and immoral in the way they operate.
Please don’t fall for their traps.
Yet some who use the same Pyramid Structure get away with this more on a technicality than what they have to sell.
While some seem genuine with their products yet still are based on Recruiting more as above.
Speaking on Technicalities, this brings me to the next section.
MLM (Multi-Level Marketing)
MLM can go by other names, such as Network Marketing, Referral Marketing, Home-based Business Franchising, and Direct Selling.
Depending on the company, the members selling go by various names but primarily as distributors, promotors, Home-based business operators, consultants.
The structure of MLM is the same as the Pyramid structure explained in the image above.
They can be a single–tier program where you would sell the products or most often as a multi-tier level where you are required to recruit new members under you.
Often called a downline, you must get your downline recruiters to recruit more, again as per the pyramid structure.
The same idea applies to any commission or sales of the products.
Once a monthly target has been reached, the distributor will receive their commission.
Parts of the remaining commission and the membership fees are divided and distributed up the Pyramid style ladder.
So for one person’s hard work all those above, benefit as a result, for not doing anything else.
No wonder they advertise and say earn thousands without lifting a finger.
Examples of some MLM Companies
The above are just a tiny number of MLM Companies worldwide, yet these are the most well-known.
Some have been in operation for many years’ decades even.
While some have now been closed for various reasons, such as being liquated,
Dissolved, bankrupt, or shut down by the FTC as Pyramid Schemes.
You can check these out https://en.wikipedia.org/wiki/List_of_multi-level_marketing_companies.
What is the main difference between MLM and Pyramid Scheme?
Now we mentioned MLM operated similarly with the structure as a Pyramid Scheme.
At times for some, the main difference can be borderline, is those within a Pyramid scheme do not sell products or at least actual products.
MLM companies have tangible products to sell, yet the hierarchy structure still applies to the majority.
Note that this doesn’t mean they are scams (technically).
As long as they have products to sell and focus more on selling than recruiting, they are considered legal.
As you can see, there is that fine line that separates the two, MLM VS Pyramid Schemes.
As such, owners and the members (consultants) can make a profit from this.
Some consultants have made some good money according to their promotions.
Mainly due to having a sizeable downline team of recruiters.
If you are thinking of joining in making some serious money, don’t.
Many top-line recruiters lie about their earnings to draw people in.
Unless you are at the top of the chain, you will struggle to make big money and are doubtful to do so, as explained further with some examples.
What goes on in the Office stays in the Office.
The scenes’ methods are not as rosy as one would like to think when they sell their products.
Speaking from experience, I used to sell Herbalife back in the ’80s.
I was younger and unprepared and duped into thinking I will be rich with how they talk to you with all the hype and meetings they give.
Nope didn’t work that way with all the sneaky and rough tactics they use, not just Herbalife but other MLM’s operate the same or similar manner.
Don’t get me wrong; there are many beautiful products available however it is not just the products in question.
Many are overpriced and not as high quality as what you can get cheaper and even better elsewhere.
The tactics they use and say these products are unique and only available via your consultants to purchase.
To sell to others, you need to pay upfront for the product(s) then find a selected group, usually at the start, which is usually family, friends.
From there, you give your sales pitch you are taught to say much like a sales agent has to sell life insurance, etc. Been there, did that, done that too.
You start to target certain family members, and your closest friends you know could need to use the product.
You keep watch over them and make sure they are using the product and instil in their minds how great they look now and can see it is working for them.
Once brainwashed, you begin to get them to join and start recruiting their friends or neighbours and begin the process repeatedly.
MLM marketing aims to recruit more people to your downline and for them to recruit more as well to their downline.
However, to stay legit, they use products on the frontline to avoid being known as a Pyramid Scheme.
That is where the so-called money is not within the products themselves.
But that is not all
To join an MLM company, you need to purchase a product (generally known as Start-up Kits) upfront before you can sell.
Some Starter-Kits can range from just over $100 to over $400 or more to get started.
When starting, this can get quite expensive if you are not doing as well as they want you to be.
You are also required to sell the products and recruit constantly, and there are usually monthly quotas that need to be met, preferably surpassed.
The unfortunate part is they don’t care if you are struggling at home or have any other issues we all face in life.
You are just a numbers game to them, and if you have not reached your targets, they will blame you, literally saying you are not working hard enough to sell and recruit.
Another tactic they use is if you are not selling enough or your recruits are not producing the results they expect.
They blame you and say it is your fault you are not pushy enough with your downline to recruit more and have them sell.
Your up-line (the person who recruited you) will be of little or no help unless you build up what looks like a strong team under you.
Otherwise, they won’t bother helping you or say you need to work harder and push the products and recruits.
Remember, they earn from your sales and increased recruits, so if that is low, they have no incentive to help you as they will most likely feel you are a lost cause to them.
They will continue to recruit more, and the same will be with them with the up line that will push them the same way.
Relationships destroyed or lost.
This section also applies to the Pyramid Scheme and MLM’s when we are talking about friends and family.
Unfortunately, many relationships have been lost or destroyed due to needing to push your family and friends when they don’t reach their targets.
If they decided to quit, you are the one at fault from your up line as you have not been pushy enough to get them further motivated to sell and recruit more.
These are all behind the scenes of what is happening that you are not aware of unless you become an MLM consultant.
MLM is not peaches and cream with how they make it to be.
Stating you can get rich quickly or create an incredible lifestyle selling products, recruiting people.
They don’t care if your targets are tight nor what personal circumstances you may have.
Here is an article about a mother who nearly lost her child due to MLM and how they operate, and I am sure many mothers in the MLM industry can relate to this.
Women are the main MLM Targets.
It is a proven fact that women (especially Mothers) tend to be the main targets with MLM companies since MLM started many years ago.
Initially, this was called direct selling and would focus on women at home who want to earn money to help the family situation.
Apart from being busy with raising children, family finances become challenging at times.
MLM would take advantage of this, knowing that mothers meet other mothers when dropping their kids at school.
Many would form a mothers circle meeting and talk about their children and the daily issues they face.
Now is the opportunity to try a product, get some results, and even recruit them to their MLM.
From here, they would entice them with three main parts playing on their emotion.
1) You could be making a fortune selling this
2) Even more as you bring in more people under you with even more profits along the way.
3) Here is your chance to have that financial lifestyle you always wanted for your family
Your Upline will strongly suggest rather than be asked to attend weekly meetings and attend their seminars.
They strongly recommend when you come to their seminars to bring a guest (in other words, recruits).
You will notice if you are in this situation, if you are alone at these seminars, you will be ignored by many at the top mainly.
However, should you bring recruits with you and your downline are the centres of attention to them?
Fake it and hope they believe you.
MLM companies use many sneaky tactics to make it look it is theirs and coming from them.
Representatives or consultants are often told to exaggerate, even lie about their earning or success stories.
Doing so is a sneaky way to help sell or even recruit more members to their downline.
They are not the only ones doing this, as some affiliate marketers do the same with fake or misleading results (more on Affiliate Marketers soon)
They will even give you samples of their (many fake reports) of how they or others made lots of money.
Some even show you cars they either bought in Cash or won due to selling and recruiting others within the program.
If recruits only knew before they got sucked in.
Here is a Facebook post from a rep showing off the lifestyle paid for by their MLM:
Have a look at these
This one was shown on Facebook by a consultant, who was faking it by showing off their lavish lifestyle thanks to the MLM company they are part of.
The Consultant is just showing off what they purchased for Xmas as a result of their MLM success.
There is nothing wrong with those images; they seem to have the money to purchase good quality and expensive bags and shoes.
However, take a look at the following image relating to the shoes.
Hmmm, those shoes on the right look mighty similar to how they are displayed, including the same bags and background to boot.
The original images by the rep show their gift purchases yet this is just a snapshot taken instead to create a fake image of success.
Let’s check another one.
Here an Amway Rep is boasting about the Porsche they purchased thanks to their earnings with Amway.
The Amway Rep stated that the Car was purchased in Cash; we are talking about a genuine Porsche and not a toy car?
Here is their proof of working with Amway, and the results came in the form of purchasing this fantastic set of wheels in cash.
The truth between the lines.
Re-read some of what this rep stated in the above image with the Car.
“Friends and family have come and gone.”
They are not talking about friends and family passing away but more on they lost friends and family due to pushing them to the point relationship has been lost.
“There (not they’re) have been good times and bad.”
As a result of this, they lost them once more to their pushy and constant attempt to get them to sell and recruit more. Unfortunately or fortunately, friends and family woke up to this.
Wow! This takes the Cake.
“Today, I purchased my dream car in CASH!”
Notice the capitalization of the word CASH?
However, sorry to be a party pooper rep from Amway.
Here is the same Car, same position, same weather, and same structure found in Wikipedia Commons.
Oh, MLM’s Please Stop You can’t handle the truth so stop lying for people’s sake!
Religion plays a part too with MLM, as you will see below.
Now I don’t want to get into a religious debate; you can see for yourself how religion is abused and connected to MLM for some.
I will give you two parts to this you can decide for yourself.
Utah and MLM
Utah, home to the Church of Jesus Christ of Latter-day Saints, is also the unofficial MLM and direct sales capital of the world.
Utah has more MLMs than any other state per capita, and at least 15 MLMs are headquartered in Utah County alone.
Using God as a tool to sell, not as faith to believe
Plexus sells weight loss products then have also had some of their products banned as a result.
But it gets worse as you will see they use religion to seed into people’s minds that this is what God wants you to do.
If you are not into this business anymore or want to quit, you will go against God’s words and abandoning God.
That is all I will say with the above Plexus; you can check the link attached and watch a 44 min YouTube video full of hype and twisted truths.
So as far as MLM goes, don’t fall for their scammy fake words.
There are articles and even YouTube videos given here that are not mine, and you can see what others have had to say about MLM and its operation.
As I said earlier, they are legit, but many are borderline, some with nasty attitudes.
I have to stop now with MLM as there is too much to say, which is an overall article.
I haven’t discussed individual MLM’s but will in the future.
Knowing that they are not much different, just the type of products they sell are different, yet the pyramid structure still exists.
Just recently I saw a YouTube video about MLM’s and Pyramid Schemes.
This simply confirms what is written above along with many more features one needs to be aware of when being approached by Various MLM organizations or more likely by your friends or family who has managed to get themselves involved in such schemes.
You can make your own mind up after reading the above and also the video clip which goes for about 29 minutes but is certainly well worth it.
Ok, let’s go now to the next and last section.
Affiliate marketing is a method where you, as an affiliate, promote other people’s products.
When someone clicks your link and purchases that product or service, you earn a commission.
Affiliate networks are the centre between you as an affiliate and the company you want to promote.
To become an affiliate, you would join an affiliate network with many different companies under them; from there, you apply to join that selected company you wish to promote.
Note this is free to join, and should you find any network that asks you to pay a fee for joining, then steer clear and be cautious.
Here is an image of how affiliate marketing works
If someone tells you that you can earn thousands with the push of a button, run away; they are there to take your money with no results.
There are many so-called gurus to make you believe you can earn so much in a short time.
Unfortunately, such fakers have given affiliate marketing a bad name over the years; some continue their ways.
Despite what some so-called fake gurus would make you believe, you won’t be earning by the day or week nor make thousand by the end of the week.
Affiliate marketing is a long-term business that you build and grow.
It can be called passive income, but that can be deceiving as well.
To make money online as an affiliate marketer, you need to put in the effort and focus long-term.
The best way to do this is via a website you own, and you will be writing content on the products or services you are promoting.
Affiliate marketing is not a race, so you won’t get it here as an affiliate marketer if you are looking for instant money.
Pros and Cons of Affiliate Marketing
· Affiliate Marketing is not a Pyramid Scheme of any sort.
· This is a legit way to earn money online, typically with a website promoting other people’s products.
· As you are promoting online, there is no need to have any inventory, therefore no products to pay for before or after selling.
· No need to visit anyone in person.
· You can select what you want to promote that you have a passion for and one that can help others along the way.
· This is great for those who may not have the confidence to speak face to face but maybe better suited behind a keyboard.
· You do not have to pester your family and friends to recruit them, nor do they need to recruit anyone else. So friendship stays as is.
· No one to answer to; you are your boss.
· No targets to meet other than the goals you create for yourself.
· Affiliate Marketing can be done Part or Full-Time.
· Provided you have an internet connection and a laptop, and you can work anywhere around the world or just at home from your bedroom if you wish.
· You can even start for free to see if this is for you
· The ability to create your own online business with your website
· Affiliate marketing is not a quick way of earning money online as it is a long term method
· You need to put in the effort and hard work, especially at the start.
· You are building a solid foundation for your own online business long term and can take around the 5-6 month mark before you start seeing some money.
· This is not for those wishing instant cash
· You need to create content based on your niche and continue to write more as you build your online business.
· Building a business online is a long-term commitment similar to a brick-and-mortar business.
· If you want to earn online, you need to put in the effort to maintain that business where formal learning is necessary.
· Lack of affiliate marketing training or receiving no training will hinder your success online.
· Nothing is entirely free with affiliate marketing; if you want proper training to be successful, there is always a cost to success, like anything worth of value, however, you can also start for free to test it out.
However, if you are serious, then you will need to pay for training along the way (more on that below)
So now you have an understanding of Affiliate Marketing VS MLM.
Plus the added knowledge you have gained about Pyramid Schemes and how they operate and compare to Multi-Level Marketing (MLM).
What is affiliate marketing training?
Here is where the fun and excitement starts.
The proper training will show you how to build your business empire in the correct order, vital to your success online.
You are your own boss, you determine how much you put into the business, and with the right training, you can succeed and do well.
Where do I get started?
I have been part of this training platform for seven years and am proud to be a member.
As I said earlier, Affiliate Marketing is not for those seeking instant money.
Building your own business online requires work and effort on your part.
Remember this is your ticket to financial freedom and one you can even start part or full time depending on your circumstances in life.
This Training Platform is called Wealthy Affiliate.
Three Levels of Membership
There are three levels of Membership, and you can choose which is best for you.
Depending on what you want to achieve in life and how serious you want to be, online can determine what level you wish to have.
The chart will show you all three levels, and there are no hidden costs either nor upsells along the way.
The only added cost there maybe is to purchase your own domain, which can be done either via wealthy affiliate or other places like Name Cheap, Go Daddy, Host Gator to name a few.
Within Wealthy Affiliate, the cost is around the $15 mark; however, you receive many other features, which usually are add-ons with some other places.
There is no need to purchase your own Domain straight away, as I will explain now.
Of the three membership levels, two are at a cost, as you can see with the chart, and one is available at no cost to you.
The Starter Membership, Level one, allows you to go through the training lessons for free.
Here you receive a free subdomain website you can work with, and when you are ready, you can then get your own Domain as that is the one you own outright.
You will also find that should you purchase your own Domain, transfer all the content you have on your free version to your own.
No fees and support all the way.
Why Starter Membership
One major benefit is that you can become a starter member at no cost to get you started—no credit card is required to start.
As a starter member, you have two separate courses of ten lessons, each all around the hour mark in each lesson.
This is great for those who are new to Affiliate marketing those who have tried but struggled with inadequate or lack of training.
The starter membership is free because you have an opportunity to see if affiliate marketing is for you or not at no cost to you.
If you feel this is for you once you complete the basic starter training, you can always upgrade to Premium or Premium Plus membership.
In the early stages, the Premium Membership would be the best option, while the Premium Plus is intended for those who really what the maximum potential to learn and grow online.
Which one should I choose?
Of course, the Premium Plus membership would be the best choice overall, but I would suggest starting at the beginning, and that is with the Free Starter Membership.
Not only is it free to start, but it allows you to see if this is for you and if so, the next option I would suggest is to take the Premium Membership.
You can still take whichever membership option you want but best to start for free and work from there.
You will also find within the chart there are two options to take when paying for Membership with the Premium and Premium Plus.
Notice at the top f the chart you will see monthly and yearly.
These show you the actual cost, either monthly or yearly, which works out to be the most cost-effective Membership to take.
Just click monthly or click yearly for a total cost breakdown.
Important Advice when paying your Membership
The monthly is $49 per month while the Plus is $99, all in USD
When you sign up for either paid Membership, you will select your payment method.
Once payment is set up, they are taken automatically from your nominated account you have selected and will be due on the date you joined each month or, in the case of Yearly, the date you joined in the following year.
Memberships are recurring monthly payments so that you know and are able to ensure funds are there.
This is no different than paying for any membership or other financial payment you typically deal with in life.
I won’t harp on with all the benefits you would receive with the Premium Memberships, as the chart below shows it all.
As you can see from the chart below, there are many benefits and added resources available to you as a Premium member.
For a more in-depth view of the chart with all the added features you receive, you can find that here.
Your choice to make
Think of it this way
You can learn the basics and go your way if you wish, no problem with that.
No one will be pushing you nor will blame you and say it is your fault.
This is your future in life, and it is your choice with how you want your future to be heading.
You can stay as a free member with limited training or achieve more in life; if so, then the next level may be for you.
Again your choice as you need what is best for you and or your family
This is a business designed to help you create your own online business long-term.
I will promise, when you join Wealthy Affiliate, regardless of which level you choose.
I will be one of the first to welcome you and support you all the way.
So if you are interested in learning how to build your own online business the right way.
Here is your opportunity to do so and just get started now.
Do you have a Passion for Success and seeking Financial Freedom?
Click Here to find out more on how YOU can Start YOUR OWN Business Online while working from Home and Learn How to Earn in the Process.
I will see you on the other side of success.
If you have any further questions to ask or share, please leave a comment below. I will personally answer them all.