Why, And How, Brands Are Swapping MLM For Affiliate Marketing

Forbes

25-03-2025

Lisa Maynard is Vice President, Marketing at global affiliate marketing platform Awin.
The multi-level marketing (MLM) industry has been part of American commercial life for at least 100 years. What began as the door-to-door selling of vitamins and perfume has become a channel worth tens of billions of dollars with an estimated 6,000 participating brands.
The basic model—in which independent distributors earn income from direct sales and sales generated by their recruited downline seller teams—has remained constant. For direct seller 'distributors,' MLM promised high potential income and the opportunity to be your own boss.
MLM companies have been successful for decades, but, recently, many have struggled to drive sales and profit growth. In response, companies that historically relied on MLM sales models have been making changes to modernize their businesses, accelerate growth and increase profitability. This includes embracing affiliate marketing, either as a complement to their existing model or a complete replacement.
BODi (part of Beachbody) recently transitioned to an affiliate-centric model. Other major MLM-focused businesses such as 4Life, BELLAME, Herbal Alchemy, Pure Romance and SimplyFun have either added affiliate programs or replaced MLM with this form of digital partner marketing. And a survey by Direct Selling News showed that 67% of MLM companies are either contemplating or have already implemented business model changes.
Foremost, the rise of e-commerce and social media has intensified direct-selling competition, driving MLM companies to explore new growth avenues. It's become harder for all these direct-selling organizations to find great distributors who want to make a living selling person-to-person. In today's landscape, many prefer creating online businesses and partnering with multiple brands that don't require a sign-up fee or prepurchase of inventory to sell.
Secondly, MLM distributors divide their efforts between selling products and recruiting new representatives. Some believe that the distraction of downstream recruitment impedes overall business growth. Additionally, increased regulatory scrutiny is prompting some MLMs to seek less controversial selling structures.
Changing consumer behavior is also a major factor to evaluate, as people today look to digital media for product ideas and information and want recommendations from trusted sources. Many consumers also want to avoid the high pressure of person-to-person sales, preferring to discover products based on the recommendations of creators and publishers they trust.
As a result of these changing shopping behaviors, and a focus on more authentic purchase journeys, affiliate has become a promising and more effective model.
Affiliate marketing is a performance-based system where businesses reward partners for driving desired actions, like sales or leads. Affiliates promote a company's products or services, earning a commission for each successful referral.
It is a digital channel without the hierarchy of downstream teams and compensation. Activity and sales are tracked by third-party affiliate networks that ensure the right partner is compensated for each sale.
By prioritizing the following steps, companies can get the most out of their affiliate marketing program:
Establish A Vetting Process For Publishers: Reviewing and approving applications is a time-consuming, yet crucial, process for brands to ensure a publisher is well-suited for their program. But don't leave a publisher's application pending for too long, or they will apply elsewhere.
Communicate Effectively: Once accepted, publishers should be seen as an extension of your sales force. It is key to provide them with the relevant information they need to best promote your brand, such as your company's top selling or best converting products.
Ensure Their Creatives Are Up To Date: Publishers should receive the most recent creatives and offers, or site visitors may not be given the offer they expected. This can have a major impact on conversion.
Optimize Site Conversion: A strong conversion rate is arguably more important than the offered commission for a sale, as publishers will resist sending their audience to a site that doesn't convert. You can increase rates by offering unique online discounts or removing any unnecessary steps in the checkout process.
Validate Sales Regularly: Publishers must be paid consistently. Additionally, certain publisher types require expenditures to optimize their campaigns, and regular validations are essential for them to budget properly.
If done properly, affiliate marketing can offer several advantages over an MLM model, including greater reach, sales and scalability, as well as improved brand reputation.
While there are many reasons for companies to embrace affiliate, some operational changes are required. Companies accustomed to focusing on recruitment and building a downline must shift their mindset toward nurturing relationships with a diverse network of affiliate partners, each with its own audience and marketing strategy.
The transition also comes with many blind spots and easily occurring mistakes, such as poor tracking and analytics that can result in a lack of awareness of affiliate performance and hidden costs like platform fees and management tools. Many brands also operate under the misassumption that high commissions alone will attract top affiliates, which they may not. Since affiliate is a pay-for-performance channel, potential partners choose programs based on the available sales commission, relevance to their audience and various other benefits offered.
One way companies can overcome these blind spots and missteps is by ensuring they implement robust tracking systems to collect accurate performance data. For example, Google Analytics can regularly track link performance to identify what conversion tactics work and fall short, including link placements, calls to action, type of content and more. Affiliate network platforms are also available to simplify the process of identifying and recruiting relevant and authentic partners for a high likelihood of success.
The days of selling vitamins door to door may have long ended, but as Alexander Graham Bell said: 'When one door closes, another one opens.'
Transitioning to affiliate offers a compelling opportunity to MLMs, which is why many mainstay MLM brands are quickly making the shift. By embracing this new model, MLM companies can improve transparency, expand their reach and increase customer satisfaction. And it's done while simultaneously driving greater efficiency and profitability.
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