Multilevel Marketing is a type of Network marketing. Network marketing is the greater category. MLM is a specific type of network marketing. MLM involves businesses with an upline and downlines in their network. Most MLMs survive on increasing their number downline businesses not necessarily increasing their number of customers or referals. Even though the downline businesses are somewhat of a customer.
Some people like to disguise MLMs by using the term network marketing - which is not technically a lie. They do this mainly because MLMs do have some negative PR from past MLM scams. I think calling it network marketing tends to be a misleading - MLM is more accurate.
As mentioned previously network marketing is done almost naturally without any formal considerations, just through your recommendation of certain products or services to anyone - whether it be through the internet, family party, or a speech in a stadium. Think about all the times you recommend someone a book to read. IF you had an "affiliate" link, say with Amazon you would make money off that recommendation if when you recommended it - those that you recommended it to bought through your link. Some may bypass your link but that should not stop you. Some feel funny about getting a commission off their friends or family - better for Amazon to get all their money? You could offer your close friends discounts if you are inclined.
Affiliate marketing is also a form of network marketing. Affiliate marketing gets everyone confused because it has some MLM characteristics. The difference is you are not focussed on upline / downline protocol (such as you must have three downline before you qualify for X discount etc.) --> you normally get the same commission for each sale / referral no matter how it went through you for affilate marketing. The other difference with affiliate marketing is you have to not view the people you share your link with as competition as much as you look at them with cooperation. It creates a whole new marketing word called "co-opetition." And that is everyone succeeds the most when everyone is cooperating and no one succeeds when no one is cooperating. Kind of confusing - your competition might be cooperating with you. If an "ebay" website has an "Amazon" link on it - the customer might buy from Amazon and not on ebay. But ebay gets some commission if that customer buys through eb
ay's Amazon affiliate link - weird when you think about it too long.
Even though ebay and Amazon are competing for the same customer for the same product - they both make more money if they share their respective customers. The gest' of it is, if you are an affiliate provider, you want your affiliates to succeed greatly whether they are direct competitors or not. You still make money off every sale. Yes you would make more if the people just came to you.
It might be easier to visualize if you look at it like a car dealer-ship. GM would make the most money if everyone just came to the assembly plant and bought their cars & trucks right off the line. That is not practical. Not everyone lives near an assembly plant and they would have to travel 100s of 1000s of miles to get to the one they want. Instead GM franchises dealers (get the word out to) where the customers are (like the affiliates might have access to more / different customers) - yes GM loses some of it's profit on each sale, but in the end they end up selling more and therefore making more money. Affiliate marketing works exactly the same way.
In conventional dealer-ship marketing - most dealers can get vehicles from other dealers brought to you now. Both dealers make something on this type of a sale (win-win). The original dealer with the customer makes the most if you buy one of his off that dealer's lot. He still makes some money though if you buy a GM vehicle through him from another dealer's lot. That particular dealer might have the vehicle you want but it is not geographically advantageous to you, will also make some money off that type of sale. Before this "co-opetition", if you came into the dealer and they did not have what you want - no sale, no profit. Now - both dealers made money and the customer is happy (again not as much as the original dealer would have made if they had the vehicle in stock - but they made money).
I hope this helps, I might have spread my dealer analogy on a little thick, God Bless, Ed R.
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