Multi-Level Marketing or MLM provides you with two ways to earn a profit. The first method is the selling of products. You become the distributor and sell products purchased either through your website or from you directly.

The second way to earn a profit is to recruit other people to be part of your downline; you earn a small portion of money from them as well as any from any of the products you sell.

The people you recruit then recruit people into their downline and you also earn a portion of the sales and on it goes down the line. Some companies have put a stop where it will go 9-12 levels deep, sometimes even further.

What scares most people about MLM is the fine line between legitimate and scam. One of the easiest ways to tell the difference is if the main purpose of the program is for you to only recruit people, then that’s not a good sign. The reason being if everyone continues to recruit, soon there will be too many people and nothing to sell, and no profit margin.

Some good examples of legitimate MLM (although they don’t like to be thought of with that term) companies would be Strong Future International, WAH Powermall, or Savings Highway. With each of these companies there are products to purchase at a discount, you can recruit people for your "downline", and your earn commissions from each level of your downline. There are no requirements for a minimum purchase to promote these programs.

An affiliate marketer is very similar to anyone in MLM. Unlike MLM, however, affiliate marketing is selling a product once, getting paid once. There is no downline for the actual products. Therefore, there are not residual incomes.

An exception would be, if someone signed up with an affiliate network (this is a site that lists companies that would like you to sell their products), under you the affiliate marketer, then you would earn a portion of whatever that person promotes. This creates the residual income, and multiple streams of income.

As an affiliate marketer you work for a wide variety of companies, rather than just one. You will get paid through the affiliate network site the amount that is posted when you sign up for the program. Usually you are paid within 30 days of any purchase, sometimes every two weeks.

It is vital that you have your own website, as you will need somewhere to promote the companies that you wish to promote. Most affiliate sites will not accept you as a customer unless you have your own domain and website. So there is a small investment.

You can be both an affiliate marketer and work MLM and have the best of both worlds.