Affiliate Marketing vs. MLM: One Clear Winner

If you run a blog, you are always looking for ways to monetize it. Affiliate marketing and multi-level marketing (MLM) both show up in those conversations. They sound similar on the surface. Both involve promoting products and earning commissions. But the business models could not be more different.

We have built our companies on affiliate marketing for over a decade. It is the reason Lasso exists. MLM, on the other hand, is a model we actively steer people away from. In this post, I will break down both options so you can see why we land where we do.

Updated 2026.

1What Is Affiliate Marketing?

Affiliate marketing is promoting other companies’ products or services on your blog, YouTube channel, newsletter, or website. You earn a commission when you send merchants qualifying leads, traffic, or sales through your affiliate link.

It is a practical way to make money online without creating products to sell. Startup costs are low. You can start from anywhere and run it as a side project with a few hours per week.

Affiliate marketing has been our primary business model for over a decade. It worked so well that we built an entire product to optimize it.

How It Works

Affiliate marketing involves two parties:

• The merchant selling the product (the vendor)
• The affiliate marketer promoting it (the blogger, publisher, or digital marketer)

It is performance-based. You get paid when a sale is made or when your referrals take a specific action.

The income potential with affiliate marketing scales with the quality of your content and the traffic you earn. More qualified visitors to your site means more chances for readers to click your links and buy.

I have built two niche sites that generated over $2.6 million in affiliate revenue since January 2018. That averages roughly $51,400 per month for more than four years. The playbook is not complicated: publish helpful content, recommend products that solve real problems, and place tracked links where readers are ready to buy.

But let us look at a bigger example.

Ever heard of The Wirecutter?

It is one of the most referenced affiliate sites on the internet. It generated $150 million in eCommerce sales and was sold to the New York Times for $30 million.

How do they monetize?

• Write product reviews
• Include affiliate links in every post
• Rinse and repeat

Take a look at the screenshot below. It is from a post about the best workout headphones. People searching for this keyword have strong buying intent.

All The Wirecutter did was create a detailed review of their top picks and add affiliate links. If the searcher finds what they are looking for in the article, they click a link and buy.

The Wirecutter earns a commission.

That is a simple example of how affiliate marketing works at scale. One reason the site converts so well is product boxes that surface key details right in the content. We tested that format on our own sites and tripled affiliate commissions. That is the kind of conversion infrastructure we baked into Lasso.

2What Is Multi-Level Marketing (MLM)?

Multi-level marketing (also called network marketing) is the process of selling products through a pyramid of independent sellers (distributors, or the nickname “huns”).

The higher up the pyramid, the more commissions you earn as revenue flows to the top.

MLMs encourage members to recruit more sales reps because recruitment is how most people try to make more money. Recruits are referred to as the sponsor’s “downline” and also collect a portion of commissions from the levels below them.

These non-salaried workers sell items directly to customers rather than getting products into retail locations.

Sellers got the nickname “huns” because of their direct sales approach to prospects, often using the word “hun” before diving into their pitch (for example, “Hey hun, you got a minute? I would love to talk with you about a life-changing opportunity.”).

Multi-level marketers are known for throwing “parties” with family and friends that turn into product demos where they look to recruit and sell.

How an MLM Program Works

An MLM is structured to encourage company members to acquire more people. Once recruited, the initial salesperson gets a percentage of the new recruit’s sales.

Simultaneously, you can also earn commissions from selling the company’s products.

Many sellers set up their own business within that company, operating as independent business owners (IBOs).

How the money is made: through the vast reselling network of distributors who earn commissions from:

• Business licenses
• Their downline’s sales
• Direct sales to consumers

MLMs rely on word-of-mouth referrals from co-workers, friends, and family. Sellers with larger teams working beneath them earn more commissions.

The commission structures get complex. Arrangements vary, and other factors come into play, including:

• How much product your network sells
• What level you are within the network
• The number of recruits you have in your downline

Despite the notoriety MLMs get, many have been investigated by the FTC for alleged pyramid schemes and paid millions to settle outside of court.

3When an MLM Might Be an Illegal Pyramid Scheme

You should know that when you enter an MLM, it is already pretty close to a pyramid scheme.

The big differentiator?

According to the Federal Trade Commission (FTC):

When promoters emphasize recruiting new distributors for your sales network as the real way to make money rather than focusing on product sales.

The emphasis is on recruitment, not sales. There is your red flag.

Forbes has reported that MLMs must adhere to the 70% rule, which says at least 70% of all goods sold must be bought by non-distributors.

In other words, the people buying the product must be from outside the organization, not the distributors themselves stocking up on inventory.

That is where the term “Garage Qualified” comes from.

When the reseller buys so much product to keep as inventory, their garage is filled with merchandise so they can qualify for team status.

A report published on the Federal Trade Commission’s website studied the business models of 350 MLM companies in the United States and found that 99% of people who join MLM companies lose money.

4Why We Are Not Fans of Multi-Level Marketing

Bottom line: very few people in the MLM hierarchy earn enough money to live off of.

They are known for targeting specific demographics that are easily lured into the organization, with much of their income coming from distributors for “essential materials,” including:

• Business fees
• Buying inventory
• Paying for sales courses (the courses usually suggest they buy more inventory)

They pitch themselves as the fast track to financial freedom, but the reality is that roughly 1% of people who belong to MLMs earn above minimum wage.

For operators comparing monetization paths, the contrast is stark. Affiliate marketing rewards content and trust. MLM rewards recruitment and inventory purchases. We have seen this pattern across enough publisher conversations to know which model we would bet on.

5Affiliate Marketing vs. MLM: What Is the Difference?

Here are the key differences between multi-level marketing and affiliate marketing.

1. You Decide Which Products to Promote

With affiliate marketing, you pick which products to recommend. Whatever your niche, choose items that align with the needs of your readers and help them solve a problem. You have complete control over your promotions.

MLMs require you to sell their products, leaving little room for much else.

If you need a starting point for finding programs in your niche, our guide on affiliate marketing for beginners walks through niche selection, keyword research, and program evaluation step by step.

2. Free to Join

Affiliate programs are free to join. MLMs require you to pay various fees before gaining access. You may need to purchase a starter kit, pay membership dues, or buy inventory to achieve an “active” status.

Our database has over 8,300 affiliate programs categorized by niche. You can browse them when you are ready to start.

3. No Pressure to Sell

One thing that sets affiliate marketing apart is how there is no pressure on you to close the sale. You are the middleman, connecting buyers with merchants.

Your only job is to:

• Create high-quality content to engage your audience
• Recommend products where it makes sense

When your reader finds something that will benefit them, they click your affiliate link. You are not sitting across from someone at a kitchen table trying to close them on inventory they do not need.

Multi-level marketing places high stakes on making the sale, since you only get paid once you sell your inventory.

If you sell nothing, you earn nothing, and you will often lose money.

For the mechanics of building links that actually convert, read how to create affiliate links that earn you money.

4. No Need for Recruitment Parties

Affiliate marketing gives you complete control over your products and how you decide to market them (social media, SEO, email marketing, or paid ads).

You can scale your business as you see fit without needing downline distributors, and everything is done online.

MLM companies are primarily in-person, direct sales where you are marketing to friends and colleagues at social functions.

5. No Monthly Resets

Building a successful business with affiliate marketing continues paying dividends for years.

It remains an asset that puts money in your pocket. Our sites still pay generous monthly affiliate commissions from content we created years ago.

MLMs reset monthly as sellers must recruit new people and hit new sales goals. If you miss your target, you can lose rank and commissions or be removed from the business entirely.

That is why those scrambling to make sales will buy the products themselves to avoid getting penalized (remember “Garage Qualified” from earlier?).

6How to Build Your First Profitable Affiliate Business

You can get started with affiliate marketing quickly. We wrote a detailed post about how you can do it for only a few dollars.

But in a nutshell:

• Create a free website with WordPress and sign up for hosting. WordPress is free, open-source software used by 43% of the web.
• Start with a niche you care about and find products to promote. Consider your experiences and interests when deciding.
• Conduct keyword research. This helps you know whether people are searching for your topics on the internet.
• Create quality content consistently. This is the number one reason people will want to visit your website. Show up and help your audience.
• Sign up for affiliate programs. This is how you will make money from your blog.

It is more work than a bullet list suggests, but at least the FTC will not accuse you of questionable business practices.

If you want to start with almost no budget, our post on affiliate marketing with no money covers the leanest path we recommend.

Before you commit to a niche, run an Opportunities Scan to see which programs and products already fit your content. It takes a few minutes and surfaces programs you might otherwise miss: https://app.getlasso.co/opportunities

7Is Affiliate Marketing Worth It?

Yes, affiliate marketing is worth it.

There are many reasons to give it a shot, like our success with this business model (recall the two sites that earned $2.6 million in under five years?).

We love teaching others how to do the same. Lasso has hundreds of customers in dozens of niches earning full-time incomes with their affiliate websites.

Affiliate marketing spending hit $8.2 billion by 2022 (a nearly $3 billion increase from 2017), with 81% of brands relying on affiliate marketing programs to drive traffic and sales. Those numbers are not fringe. They are mainstream.

For tactical advice once you are publishing, our affiliate marketing tips roundup covers the habits that separate hobby blogs from revenue-generating assets.

8FAQs

Here are some frequently asked questions about affiliate marketing vs. MLMs.

Is Affiliate Marketing a Pyramid Scheme?

No, affiliate marketing is not a pyramid scheme. It is performance-based marketing where you create content that drives readers to merchants.

The higher quality of your content, the better your chances of traffic to your affiliate links because you have built trust with your audience.

When readers click your links and buy, you earn a commission. There is no downline. No recruitment requirement. No inventory buy-in.

Can You Start Affiliate Marketing with No Money?

Yes, you can start affiliate marketing with no money. For just a few dollars, you can build a site and start recommending products to your readers.

That pales in comparison to multi-level marketing, where you might need hundreds of dollars to buy into the business.

Can You Be Successful with Affiliate Marketing Without Social Media?

Yes, you can. You do not need a social media following to start affiliate marketing.

We have found success creating simple websites in niches we love and recommending products to our readers.

Growing an audience takes time, but in our experience, it is worth it if you are serious about building a revenue-generating asset over the long term. SEO, email, and organic search traffic have carried our portfolios far more than any single social platform.

9Final Thoughts

There you have it. Hopefully this post gives you a clearer picture of affiliate marketing vs. multi-level marketing and why we feel the way we do.

Finding legit MLM companies is tough. They have a bad reputation for a reason.

We built Lasso out of our experiences in the affiliate marketing industry. We learned through trial and error what works, and we continue learning from our customers every day.

If you are ready to build a profitable online business with affiliate marketing, start with content your audience actually needs, join programs that fit your niche, and treat your links like infrastructure (not afterthoughts). Run an Opportunities Scan to find programs worth promoting, then get Lasso on your site so every recommendation converts the way it should. Start your free trial today and see what optimized affiliate links do for your revenue.

Sean Brison

Lasso Team

Sean Brison is a dad, writer, business owner, and Content Lead at Lasso. He's spent the past several years in cahoots with Lasso's founder, Andrew, creating awesome things for people. He's also addicted to perfectly-balanced cocktails, the outdoors, and John…