by Allen Teal

Created on: January 23, 2007   Last Updated: September 08, 2011

"Which one is the lesser evil?" would be a better title. Neither will work unless you have little conscience or are actually convinced that everyone you know and are related to need what you have to offer. In reality, both of these types of marketing depend on people to join up and then quit. Those near the top of the ladder can increase their earnings by keeping the earnings potential of others relatively low. Having said this, there are a few who manage to claw their way through the process and make some serious money. Mostly, it is people who already have a great income and can invest heavily out of their own pocket at the beginning.

Multi-level marketing is sold as a way to build a business network where the money is generated by your network.

Multi-level marketing is really a pyramid that has found a way to become legal by offering a product that the government cannot prove is a fraud. Once it is in place, the marketing pyramid will only keep generating cash if the lower level can keep churning with people coming in and moving out. A few driven individuals will rise up in the pyramid, but the vast majority will lump around in the bottom for a short time and then fall out.

If new people aren't continually drawn into the bottom of the pyramid, the whole thing will collapse.

The good news for those who are many levels up is that a new fool is born everyday. Anyone who can make a great living at MLM would be able to make a lot of money in any sales situation. Recruiting is the name of the game. The companies who thrive in this type of business model are those use the lower level as buyers while telling them that they own a business. The recruiting effort is to find new buyers before the old buyers become discouraged an move on to greener pastures. The truth is that very few beginners ever recruit more than one or two people to buyers beneath them in the pyramid.

Affiliate marketing is probably a little safer route.

Affiliate marketing does not always require an entry fee. However, you are at the mercy of the company or person that you refer business to receive your payments. The vast majority of these marketers want the payment to come to them and then they will generously share the wealth with you when it becomes convenient to do so. Most payments lag for 30-90 days. They are often linked to the retention of the business beyond the initial sale.

Affiliates are discouraged from collecting the money from the sales and then forwarding it to the seller.

Because of this, it is easy for the company to hide sales from the affiliate. Even with high referral levels, most affiliates do not see large payouts coming their way. Frequently, the seller will connect directly with the buyers for their next purchases. This takes the affiliate all of the way out of the picture except on the first sale generated to a new buyer. The likelihood of residual earnings from past referrals diminishes with each purchase made by a specific buyer.

Very few people get enough income from these methods to build an estate or to live.

Mostly, they are scams that have managed to become acceptable, but they are still not very pretty. If you want to sell, find a job selling until you learn the ropes. At that point, you can tiptoe out into the world on your own to try to build your future estate by building your own marketing business.

Learn more about this author, Allen Teal.
Click here to send this author comments or questions.