Multi-Level affiliate marketing (also known as multi-tier marketing, or simply MLM) – has been around for a very long time now. Since this marketing structure works so well, today there are many software solutions designed to provide network owners and advertisers with multi-tiered commissions and payout structures.
Table of Contents
- Affiliate Marketing vs. MLM – Are They The Same?
- What is Multi-Level Marketing?
- Multi Level Marketing vs Pyramid Scheme
- Affiliate Marketing vs. MLM – understand the difference
- 3 Benefits of Affiliate Marketing vs MLM Systems
- Why MLM isn’t a viable business model
- What is MLM Affiliate Software?
- Top 10 MLM Affiliate Software in 2022
- Multi Tier Affiliate Software
- Multi-level Marketing Software
- The Advantages of MLM Software
- Frequently Asked Questions About MLM
Affiliate Marketing vs. MLM – Are They The Same?
Do you need affiliate MLM affiliate software for your business?
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This post will be not only about affiliate MLM software but also about everything around the affiliate MLM software business. If you’re trying to earn some extra money, affiliate marketing is an efficient way to do that. However, many people mistake affiliate marketing for multi-level marketing (MLM). This misunderstanding prevents some from starting on what would otherwise be a fun and lucrative side company.
Unlike MLM companies, affiliate marketing services are free to join and don’t ask you to employ someone else on a “network” basis. Knowing the discrepancies between affiliate marketing and MLM will help you see how the former will potentially result in a decent income.
This article will clarify how the two methods work, explain the main differences between them, and then we will discuss some of the benefits of affiliate marketing. So, let’s get started.
What is Multi-Level Marketing?
With multi-level marketing (MLM), you are joining a team to support a product or service. Everyone on the MLM network tries to promote the same product or service precisely. In most cases, you will be hired by someone who is already part of the network. A typical MLM network would look a bit like this:
Multi Level Marketing vs Pyramid Scheme
After reading this far, you might be asking yourself – is affiliate marketing a pyramid scheme? If this looks similar to a pyramid scheme, it’s because multi-level marketing is about as close to a pyramid scheme as it can be while keeping things legal.
As long as a legitimate product or service is marketed by the network, it is a legal pyramid. So, most MLM businesses find a product or service to promote and then set up a network to promote it. What makes a pyramid scheme illegal is that no product or service is provided – you will only pay to be part of the network while adding people to the network to receive commissions.
From my observation, 99% of all MLM systems out there are illegal borderlines. If you advertise a product or service on the network, you can hardly make any money at all. It’s because you’re right at the bottom of the pyramid. The real money comes from hiring people to sell a good or service to you.
The more people you hire and the more people you recruit (that was a mouthful, I know), the higher commissions you would receive on ALL sales.
So essentially, since you’re starting at the bottom of the pyramid, you’re basically sharing most of your commissions with the higher ones in the pyramid. Until you employ many other people, you will never be able to earn a full-time living.
Affiliate Marketing vs. MLM – understand the difference
Multi-level marketing is also referred to as network marketing or pyramid sales. Since the earnings are commission-based and originate from sales to end-users, MLM is often mistaken for affiliate marketing.
Indeed, there are some significant similarities between the two.
Meanwhile, the purpose of MLM is to make people at the top – rich, affiliate marketing, sales, and commissions – independent of other members of the “network.”
So affiliate marketing is a lot different.
With this approach, participants will select which goods they endorse and receive a commission for any sale they produce. The retailer or corporation shall pay this money to the affiliate for driving, selling, or referral. There is no network recruitment involved.
Read our related post: where to find affiliates?
There are also no start-up fees for entering the affiliate marketing network. As long as you have a method to promote products, you can start doing this free of charge. Many people find this approach very profitable, and the partnership is mutually beneficial to both the organization and the individual affiliates.
3 Benefits of Affiliate Marketing vs MLM Systems
Affiliate marketing vs MLM is a common dilemma. Let’s assume you’ve understood the fundamental discrepancies between these two marketing and promotion methods. Now, let’s look at the three benefits of affiliate marketing vs MLM systems.
1. You can pick goods to sell based on your interests
One of the advantages of affiliate marketing is the level of power that you have. First of all, you can choose which brands you want to partner with and which goods or services you want to endorse.
This ensures that you can concentrate on things that you are interested in and passionate about. When you select products that you know about and already use, you will help customers make better buying decisions.
With MLMs, you are limited to pushing unique items that your parent company has selected. You may not be interested in these products, and it may be challenging to try to sell something you don’t believe in.
2. No joining fee and every sale earns you money
MLMs typically have subscription fees and other start-up costs. Most of the participants have to invest in a package containing the items they are expected to market. Although sponsors also earn discounts on these items, the amount typically only covers the expense of being part of the network.
Marketers often have to gain certain points in several MLMs before they see any real money. Much of the money you will earn, if any, comes from recruiting other people.
3. You have full control over how to advertise affiliate goods
Affiliate marketing networks control their affiliates’ purchases through special tracking links. Brands will see how consumers arrive at their sites and offer credit to the promoter who was driving the traffic.
There is, therefore, a wide variety of approaches that you can use for affiliate marketing promo. You can post your link anywhere, as long as you’re not spamming other people with comments or emails. Some of the most common are websites or blogs, product reviews, social media, and videos.
Affiliate marketing can be executed exclusively online, and you can sell it to total strangers. While many MLM participants can make sales in this way, most of their revenue comes from direct communications.
MLM is committed to hiring other participants. A lot more personal interaction is required to create a network. This can also include tactics that others consider to be irritating.
With affiliate marketing, you often only talk to people who are likely to be interested in your products. For example, through an affiliate website, you can tailor your content to reach people who are looking for products in your niche.
Why MLM isn’t a viable business model
First of all, realize that owners of MLM networks are typically quite successful marketers themselves, but a significant number of them are still very dishonest.
They’re going to tell you everything you want to hear in order to get you to join. They already know what the problems are and will answer them in a way that will help to guarantee them another sales rep (what you are to them). Also, remember that these advertisers have a way of influencing others to employ more people. Rest assured, you will be told more than once to go out and hire your closest friends and family members for them to expand their network.
So let me tell you, first of all, that multi-level marketing is not fast nor simple.
If you don’t have many friends who are willing to work to make you money, it will take a long time to hire enough people to get you high enough on the pyramid ladder to get some decent commissions.
It can be a full-time job just to hire someone to join the network, let alone market the product or service you’re supposed to sell and get commissions on. What do you think the people you’re hiring are going to do? Selling goods to earn someone higher in the pyramid commission or wasting their time seeking to hire others.
Even if you manage to get high on the pyramid, you’re not running your own business. It’s up to you to sell those below you on the pyramid. You don’t gain if they don’t sell. Plus, you can’t even pick which goods or services to endorse. You are at the mercy of the MLM corporation to determine that. In other words, you’re nothing more than an employee, and you can be dropped at any moment.
There may be some of you out there who insist that you can make money with MLM. I agree you could. But suppose you want a more secure and legitimate long-term company (one that you actually manage) that takes the same amount of time to be profitable.
In that case, affiliate marketing is a far superior choice.
But how do the operators of MLM networks make millions (and do they make millions)?
In a few different ways.
First of all, for many of these networks, if you sell the goods or services that you are meant to sell, they get most of the fee. Another way for these businesses to make a lot of money is by offering extra “marketing plans” to help them make more sales. You’re going to get exclusive access to a marketing scheme, or you’re going to get improved goods to sell, discounted newspaper advertisements, or anything else that’s going to get you in. If your marketing package doesn’t drive sales, they’ll keep trying to sell you up until you actually leave.
What is MLM Affiliate Software?
An MLM affiliate program is a marketing strategy where affiliates receive a commission when they make an online purchase through the specified affiliate link. When the affiliate recruits new sub-affiliates and sales are made through the new sub-affiliates, the affiliate receives a certain percentage commission on the product sales.
The commission depends on the number of sub-affiliates (and this is what you will need to configure in your MLM commission software). Similarly, the chain process continues through sub-affiliates and you earn money for each sale made through the affiliate’s referral link.
Affiliate MLM software provides affiliate marketers with MLM integration to multi-level marketing enterprises. It has current and adaptable features that assist affiliates in selecting the best affiliate marketing plan and managing their network with the goal of growing commission earnings.
The MLM program also keeps track of new sub-affiliates and sales made by newcomers.
Top 10 MLM Affiliate Software in 2022
A high-quality product, compelling content, and qualified partners are the prerequisites for a company’s long-term success in affiliate marketing. A management platform designed to grow your network, on the other hand, can make a big difference.
With effective management, it is possible to keep an eye on every aspect of the affiliate program, including all the necessary tracking and monitoring of an affiliate’s performance, as well as finding new affiliates.
Moreover, an effective software of this type allows its users to examine all weak and strong aspects, which can help them optimize their plans. Therefore, we have compiled a list of the best MLM affiliate software solutions for 2022.
Scaleo MLM affiliate software
Scaleo is a fully managed multi-level, multi-tiered affiliate marketing software that allows you to track, analyze and optimize your affiliate business and affiliate marketing campaigns in real-time using cutting-edge AI technology. This MLM software is suitable for networks, businesses, and media buyers.
Scaleo MLM affiliate software helps you find the best time to convert your campaigns and optimize traffic sources by eliminating fraudulent traffic and focusing on high-quality conversions. Scaleo integrates with an infinite number of third-party technologies.
The following are the primary advantages of Scaleo affiliate software:
- Management and tracking of the affiliate network’s performance that is effective.
- Payout of commissions is precise.
- The app’s scalability allows it to grow in tandem with your business.
- Integration with the most common eCommerce platforms is simple.
- SEO boost boosts your rankings by utilizing external affiliate links.
- Excellent user interface. Scaleo features a visually appealing and robust user interface that is simple to grasp and adapt to.
- The setup is simple. This software solution enables users to create their own MLM affiliate programs in a matter of minutes.
- There are no transaction costs. Scaleo does not impose a transaction fee on its users. Instead, it offers several pricing plans based on a number of affiliates, clicks, impressions, conversions, and other essential factors.
MLM Builder has done wonders for many eCommerce enterprises all over the world, and hundreds of organizations rely on their excellent MLM software solutions. Their app puts users in charge, allowing them to work in the market as they choose while remaining competitive.
According to the official website, the basic goal behind this app is to make it easier for customers to attract and retain more distributors. Automation is ranked high among the most important benefits, and the corporation highlights it constantly.
The platform is entirely cloud-based, and users have complete administrative authority. The user has control over everything from corporate management to product and order management.
The following are the most noteworthy advantages of adopting this platform:
- It’s mobile-friendly.
- Real-time genealogies are available on the platform.
- Comes with a number of pre-installed payment gateways.
- The platform includes an eWallet and interfaces with a variety of third-party commission payment services.
- Can compute all of the company’s commissions and bonuses in only a few clicks.
Affiliate marketing MLM integration is provided by Hybrid MLM software to multi-level marketing firms. It has current and adaptable features that assist affiliates in selecting the best affiliate marketing plan and managing their network to grow commission earnings.
The program also keeps track of new sub-affiliates and sales made by newcomers.
The following are the primary advantages of this software solution:
- Easy to use.
- There are numerous integrations.
Infinite MLM is one of the most well-known network marketing software development firms. It interacts with Magento and Opencart, two of today’s most prominent eCommerce platforms for online transactions.
The company created an MLM network marketing systems software that includes all of the add-ons, features, and functionalities that your business may require. It focuses on software efficiency and a wide range of functionalities.
Furthermore, the platform is easy to configure and fairly robust and scalable, indicating that the development team behind this software is seasoned and highly skilled.
When considering Infinite MLM affiliate software, you should be aware of the following:
- They have more than ten years of experience in MLM software development.
- Their software tool is available all over the world.
- Infinite MLM is stable and dependable.
- The tool is entirely secure and safe.
ByDesign has been in business for quite some time, and the company has repeatedly demonstrated that its products are of excellent quality and dependable. Their Freedom software is multi-level marketing (MLM) administration solution that assists businesses in managing direct sales, commissions, payments, inventory, communication, promotions, and more.
The platform provides white-label features, allowing enterprises to develop a personalized representative gateway to strengthen brand identification.
The Freedom Platform platform is entirely cloud-based, easy to use, convenient, and accurate, all of which are critical features when dealing with commission payouts.
ByDesign Freedom Platform also has the following features:
- The company is continually working to improve its user interface.
- Their platform is quite customizable.
- The Freedom Platform is really easy to set up.
Multi Tier Affiliate Software
Affiliate marketing programs with two or more levels are known as multi-tier affiliate marketing programs (tiers). As is customary at the first level, you will receive your standard commissions.
There is a business relationship between you and the merchant (if you are a regular affiliate).
You can earn additional commissions on revenue earned by any sub-affiliates you refer to at the lowest levels of the affiliate program. The relationship between your sub-affiliates and the merchant will exist, but you will be reimbursed. There are only a limited number of levels in most affiliate schemes, often 2–5 levels deep, and your commissions decrease as you progress through the tiers.
The multi-tier affiliate program is a fantastic way to motivate your existing affiliates to acquire new affiliates while also rewarding them for their efforts in the process. With Scaleo, you can track affiliates at several levels and at multiple tiers, with an endless number of tiers. On the other hand, we do not advocate for a large number of them. The purpose of this is to make things easier for you and more clear to your affiliates. In order to create a multi-tier affiliate commission structure, you need to configure tiers in your multi-tier affiliate software.
Using a multi-tiered commission structure has the potential to result in affiliates leaving your network altogether. On the other hand, you will attract affiliates who are eager to labor for a dollar an hour. You will be able to reduce your costs by selecting those who would be better suited to a different specialty. As a result, those you hire will have a greater appreciation for their work.
Multi-level Marketing Software
When you hear the term “multi-level marketing software”, it’s basically the same thing as multi-level affiliate software, the only difference is that it can be used for a broader purpose. Multi-level marketing software, often known as network marketing software, is a marketing approach in which firms sell goods and services to their member network rather than through retail stores. Members make personal contact with consumers and earn a commission on each sale.
MLM software is designed for organizations employing multilevel marketing methods to reach prospective clients. These tools aid in the automation of day-to-day business operations, the promotion of items, the tracking of purchases, and the management of member networks and their associated rewards.
MLM software promotes the growth of affiliate marketing businesses by assisting users in managing sales, streamlining revenue, and tracking inventory. These solutions can aid lead generation, product distribution, and customer engagement.
The Advantages of MLM Software
Distributor/member management and retention entail keeping track of distributor relationships, preparing sales statistics, and tracking other indicators. Keep current member information such as performance, sales, bonus eligibility, and goals organized and up-to-date.
Multiple compensation plans: MLM software allows for multiple compensation plans, such as binary, matrix, and uni-level plans, which may be configured based on business needs to determine how distributors earn commissions, bonuses, and other dividends.
Inventory management entails identifying and tracking available inventory as well as viewing detailed product and service information.
Track member performance: To enhance team success, keep track of the number of members as well as their individual growth. The multi-level marketing system allows members to maintain their profiles, check their position and performance, and create reports.
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Affiliate marketing and MLM services are often mistaken for one another. However, unlike affiliate marketing, it’s extremely difficult to make a profit while being a part of the MLM.
As we covered in this article, there are three benefits to affiliate marketing vs. MLM programs: You can select the goods you sell based on your interests. There is no cost to join, and you’re going to make money on every sale, independently of anyone else. You have full control of how you market your services and products, and you have full control over the business you’ve built around affiliate marketing.
Frequently Asked Questions About MLM
MLM affiliate software stands for multi-level marketing affiliate software and is designed to provide affiliates and networks with multi-tier options for running their business. This is a legal and totally legit way to encourage multi-level affiliates to function as a whole, supporting the business. You can find free or paid MLM affiliate software anywhere on the web.
Affiliate marketing is an umbrella term for all kinds of affiliate marketing methods, while network marketing refers to the earnings structure where commissions are tiered.
What’s the difference between affiliate and partner?
Due to the obvious overlap between affiliate categories and channels, the terms affiliate and partner cannot be considered separately at all. Influencers, for example, can be paid on a non-performance basis, but they can also use affiliate links that pay them commissions for conversions. Just like any other affiliate.
Each compensation plan simply represents the affiliate’s value to the brand. It is the merchant’s responsibility to determine how to monitor and reward the affiliate’s performance. Whether we call them affiliates or partners ultimately makes no difference. Third-party referrals are such an effective marketing tool for increasing sales and brand awareness that the sector will thrive regardless of the terminology used.