Lemonade Stand: The death of MLM and affiliate marketing as we know it?




Lemonade Inc. is getting some attention today with its launch of an ecommerce platform that practically anyone can sell from. The idea is that people can set up “lemonade stands” on social sites like Facebook that sell products from various well-known companies including Apple and Wal-mart.

My first thought is that this is a very dumb, annoying idea. We already have to put up with our offline friends trying to sell us overpriced MLM products and trying to get us to come to “parties” where we are expected to buy something. Now, we are about to face the same thing online.

My question is this–if I want to buy an iPod, am I really going to find a friend and buy it from their “lemonade stand”? If I want to get it at the best price, wouldn’t I set up my own lemonade stand and buy it from myself?

As annoying as I find this whole concept, it just might fly. I find the whole Facebook thing to be very annoying too but obviously most people disagree with me.

Of course, the Lemonade Stand plan is just part of a small but growing trend to do retail in the Web 2.0 environment. And retailing in a Web 2.0 environment sounds an awful lot like MLM (multi-level marketing). When I started selling online in 1999, I began by selling MLM products. We have moved away from MLM products over the years, largely because I have come to understand that the Internet has become a threat to MLM that is going to eventually kill that whole business model unless it evolves dramatically.

Affiliate marketing is another concept that is going to have to evolve or die. It is simply becoming more and more infeasible for affiliate marketing to work in today’s online environment. My guess is that affiliate marketing is going evolve to more and more look like Web 2.0.

I expect someone to eventually figure out how to sell in Web 2.0 environment and when they do, that will represent the end of both MLM and affiliate marketing in their current forms. I will be shocked though if the lemonade stand idea is the answer. It is just too primitive a concept.

  • http://www.markbarrera.com Mark Barrera

    Sounds like a service that will be easily replaced by yet another widget. There will probably be one soon for the Amazon aStore soon if there isn’t already – and Amazon pretty much sells everything these days.

  • http://www.justaccountants.co.uk Mark from Just Accountants

    I think you may be wrong on this, at least to an extent.

    Your own awareness of how affiliate marketing and MLM works is possibly clouding your judgement.

    There are many millions of Facebook users who know nothing about MLM or affiliate marketing but who would be perfectly happy to add a ‘lemonade stand’ type widget to their profile to make a few extra dollars. Not with any real intent of making it a business, but just because they have a network of friends who may be interested in purchasing something that they’ve recommended.

    It’s all too easy to make the mistake that everyone is a marketer. They’re not and this type of widget will appeal to those who aren’t.

  • http://blog.affiliatetp.com Shawn Collins

    > I expect someone to eventually figure out how to sell in Web 2.0 environment and when they do, that will represent the end of both MLM and affiliate marketing in their current forms.

    What – like affiliate marketing within Facebook, Twitter and YouTube?

    It’s been going on for a while already.

    Time for you to update your definitions.

  • http://www.vitabase.com Greg Howlett

    @Shawn, that is exactly how I would expect an affiliate consultant to react:)

  • http://blog.affiliatetp.com Shawn Collins

    Hi Greg –

    I no longer consult, but I do leverage Web 2.0 as an affiliate. ;-)

  • http://www.u-g-h.com Owen Cutajar

    Like with all things, I think this is just another step in a long journey. Things evolve, and online marketing is just one of those things.

  • http://www.looktotheright.com Noah

    Interesting. I am excited to see how the competition that presents itself to the MLM and affiliate marketing business either kill or evolve their way of doing business.

  • http://www.qdoos.com Buy and sell

    I use facebook and i have not seen that many people trying to sell me things. I guess even if this trend does exist it will go away with time. Have you ever told your friends about a very cool gadget you just bought? Similar thing is happening online just with an affiliate link attached.

  • http://monitus.blogs.com Michael Whitaker

    “Affiliate marketing is another concept that is going to have to evolve or die. It is simply becoming more and more infeasible for affiliate marketing to work in today’s online environment.”

    Can you please elaborate? You reach these conclusions without building your case or presenting evidence first. In my opinion every company/industry has to “evolve or die” – competition 101 – so what is different about affiliate marketing?

  • http://www.InsureMeBlog.com/affiliate James Omdahl

    Took the words out of my mouth Michael…Greg, could you maybe write something up to expand on how affiliate marketers will need to adopt Web 2.0 to avoid extinction?

    If you don’t want to write that, I’d just be interested in knowing what you see affiliate marketers doing right now that they won’t be able to do 2, 5, or 10 years down the line.

    If Andy won’t let you post it here I’d be happy to take it as a guest post on our blog :)

  • http://www.contatiousbehavior.com kvernon

    The Internet is a living, breathing organism that is changing, growing and adapting even as I sit and write in this comment.

    All over the world, people are taking actions that will effect how ebusiness and affiliate marketing will evolve.

    The trick is simply to pay attention.

  • http://bushidoblog.com.ar Bushido

    Not necesarily, I registered and it isn’t a big deal. If it would have Amazon articles I’d have to hand it to you though.

  • http://yoquierrocomedy.blogspot.com David Melamed

    Interesting article. One thing you must remember is that Retail is driven by demographics. You wouldn’t be in business if you weren’t offering some sort of value, and your challenge is communicating that value. As long as you have access to people you can sell things to them using affiliate marketing or any other value you can provide. The issue with lemonade stand is duplicate content. Everyone marketing the same things to the same people offering no real value, although it may thrive just off people using the application for their own rebates, as you mentioned.

    I am also very curious to see how facebook monetization evolves, as it will… That is the basis of web 2.0, constantly evolving and adjusting as user interests and behaviors change…

  • David

    Greg, that is an interesting article indeed and you raise some valid points.

    “Retailing in a Web 2.0 environment sounds an awful lot like MLM” – true!

    Here’s another thought-provoking blog post on the death of affiliate marketing:
    http://www.azam.info/affiliate-marketing-future-trend/

  • http://showmethemoneymaster.com Eric

    The MLM market is better serviced with “Passive Prospecting” – obtaining the acquisition of prospects via a strategic automated system…. even in your absence.

  • http://amalakifreedomteamblog.com Dr. Ron from Zrii

    Nice to aware of new concepts and trends not just fluff, thanks.

    Dr. Ron from Zrii’s last blog post..Mindset Of A Champion