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These words are often used interchangeably, but actually indicate very different
types of programs. Both systems allow participants to develop income streams,
but they require different approaches in order to be successful. Since the focus
of AffiliateScreen.com is to review programs that could be used to build residual
income, you can find both types of programs listed here.
Affiliate Programs
One of the best examples of an internet affiliate program is offered by Amazon.com.
If you have a website, you may place links on your site to Amazon.com (either
general pages or specific products). If someone clicks your link then ends up
buying a product, Amazon.com will pay you, as an affiliate, a commission on
the sale. That is an affiliate program in its simplest incarnation. If you manage
to get a large volume of people to follow your links to Amazon.com and make
purchases, then you can expect these commissions to amount to a healthy revenue.
MLM Programs
Multilevel marketing programs (MLMs) are more complex. Let's say you are an
Amazon.com affiliate and you are making a little extra money from commissions.
Your friend Sally has a website and asks you about becoming an affiliate. You
direct Sally to the section of Amazon.com's website that addresses joining the
affiliate program. Wouldn't it be nice if Amazon.com gave you some financial
reward for introducing Sally to the affiliate program and potentially increasing
Amazon.com's profit? (They don't, by the way.) If you do receive any form of
direct financial benefit for introducing new people to the program, then the
affiliate program becomes a multilevel marketing program.
The direct financial benefit can take many forms. You could get a flat fee
for introducing Sally to the program. You might receive a small commission on
the sales generated from Sally's website. You could receive a payment each month
that Sally participates in the program. You might get some combination of those
options.
The program described up to this point is defined as two-tier or two-level.
Let's say you also receive direct financial benefit when Sally introduces her
friend Matt to the program. Now we're talking about a three-tier program. In
MLM terms, Sally and Matt are part of your downline.
What's the fuss?
Now you have a clear understanding of the differences with affiliate and MLM
programs. They're both good business opportunities. Why would anyone care what
label is attached to the program?
Some people have a very strong attachment to one type of program or the other.
Proponents of MLM programs prefer the potential for exponential growth. If you
have a few successful entrepreneurs in your downline, you can build an impressive
residual income. People who prefer affiliate programs wish to avoid the difficulty
with finding a quality MLM program. There are excellent MLM opportunities available,
but the scams and poorly implemented programs far outnumber the genuine wealth-building
opportunities. Affiliate programs are safer and less prone to failure due to
poor management.
Bottom Line
The difference boils down to the presence of a downline. MLMs have one. Affiliate
programs don't. Both can make money, but an MLM requires you to also sell the
money-making potential of the program.
Neither option gets you out of selling the company's product or service. Sorry.
About the Author:
Copyright (c) 2003 Clay Mabbitt.
Clay Mabbitt writes articles about evaluating online money-making opportunities.
Need in-depth reviews of the latest affiliate programs? Find them at
http://www.affiliatescreen.com/
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