Together we will explore the difference between affiliate marketing vs. network marketing. By the end of this article, you should have enough information to understand if either aligns best with your interests and goals.
What Is Affiliate Marketing?
Have you ever wondered what the one of the oldest forms of marketing is? Well, it definitely not affiliate marketing. In fact, network marketing is older than affiliate marketing.
Affiliate Marketing became widely recognized around the late 90’s early 2000’s.
With that in mind, affiliate marketing is a business model when you, as an affiliate recommend brands, businesses, or other peoples products and services, for a portion of the sale in return.
The easiest way to understand what affiliate marketing is by the following details:
- You start a blog, write articles and focus on helping people in your niche.
- Next your blog gains traffic. Then you start applying to different affiliate programs.
- Grab your affiliate links and embed it to your blog.
- A customer likes what you’re offering because it’s a solution.
- They click on one of your unique links, makes a purchase and you earn a portion of that sale.
Additionally, it doesn’t require you to recruit, package, or ship products. In fact, you’re not the one to handle the payment, complaints, or returns. The company does all that for you.
Clearly, its not as easy as it sounds!
It does take effort, time, learning, and a certain technique to make that happen. But, for the purpose of this article, you have learned what affiliate marketing is in a nutshell.
What Is Network Marketing?
If you know anything about Avon, then it might come to no surprise that network marketing is believed to have started as early as 1886.
With that in mind, Network marketing is also known as MLM or multi-level marketing. It’s a business model where independent distributors or associates, sell products or services to consumers directly.
For example, years ago I was invited to a meeting that was going to present a business opportunity. When I arrived, there was Make-up everywhere.
Little did I know, I had just been invited to a Mary Kay business opportunity. I joined Mary Kay so that I could get the experience. Unfortunately, I don’t wear makeup so, this opportunity didn’t last long.
Either way, in many cases the distributor has to pay for a certain amount of products directly because, as a network marketer you’re not considered the retailer. Instead you are the distributor. And at times, depending on the company you might earn or get free product samples.
Therefore, when your distributor supply gets low, you must restock all the products.
The easiest way that MLM or Network marketing can be explained is in the following details.
- You join a network marketing company.
- As a network marketer you’re supposed to be focused on both, selling and recruiting.
- When you make a sale, you earn commissions on your own sales. And if you were to recruit, you earn money on the sales of the distributors that you recruited.
To sum it all up, if you decide to get involved with network marketing be prepared to work hard as with any other business model.
What Are The Pro’s Of Affiliate Marketing?
Imagine that you could promote products which you don’t own and never purchased. Instead, you genuinely believe in the service or product that you’re sharing with other people. This is the beauty of affiliate marketing.
No Product Creation Required
All your doing as an affiliate is taking someone else’s product and reselling it to someone else. For instance, Amazon that ecommerce platform has millions of products.
As an Amazon affiliate, you could share the product that is related to your chosen niche, and sell it to an audience that needs it as a solution.
Furthermore, while we’re on the no product creation topic, this brings me to my next point. Not only, do you not have to create the product, but with affiliate marketing you can bypass all of the inventory management. You don’t have to provide customer support, returns, complaints or shipping.
Instead the business that you become an affiliate with, handles all this for you. This allows you to tap into profit protentional of already existing products without being burdened with all the above.
You Can Make Money Without Spending Money
Although affiliate marketing is an online business with the lowest barrier to entry. It will cost you minimal upfront money. In fact, you can get started with affiliate marketing penniless. Yep, you read that right!
As a matter of fact, there are ways for you to get started in the affiliate marketing, even if you don’t have a dime. There are programs in affiliate marketing that doesn’t require followers.
Meaning you can join most Hosting companies, Mango or even places like ClickBank, none of these require you to have a blog, or a following. Besides that, they are all free to join.
After you get access to your affiliate links, all you would do is promote your product on platforms such as Pinterest, YouTube and so on.
To sum it all up, if you have the will, strategic planning, you can create a successful affiliate marketing business.
Of course, its always important to approach affiliate marketing with realistic expectations. You need the will to learn, adapt, and commit to consistently improving your skills.
As an affiliate marketing there is tons of flexibility. You can set your own hours while working as little or as much as you’d like. Additionally, you can work anywhere at anytime making it a great option for those who have other important responsibilities to take of.
Furthermore, you can promote any products and services through a variety of different channels. Such as a blog, social media, video marketing, email and so on. They call this digital marketing.
Moreover, this gives the affiliate some freedom to experiment with what is working for them and what is not. Also, you have a greater chance of higher financial scalability because, of the variety of affiliate programs, and opportunities that come your way. The best part of all of this is that you don’t need followers to get started as an affiliate.
What Are The Pro’s Of Network Marketing?
What if you could build a team that grows, and helps you earn even more income leading you to a significant income. This is the beauty of network marketing.
You Can Make Money On Your Sales And Your Recruits
Probably one of the most attractive things about network marketing is the money potential.
It can be a rewarding experience for people who enjoy recruiting new distributors while helping them achieve their goals because, the more people you can recruit and retain, increase your chances of earning more money.
In addition to earning money from your new distributors, now your downline. You’ll also have the potential to make money from selling your company’s products or services as a distributor.
The bottom line, the income potential is there. However, its important to understand that network marketing should not be viewed as a get rich scheme opportunity.
Potential For High Income
As a network marketer you have a high potential of income, especially if you’re good at recruiting, helping others, and selling products. This all depends on a few factors, the company you sell for, the products, and your skills. However, if you’re willing to put in the time and effort, the potential for high income is there.
One of the key features about network marketing is you have the ability to personally develop. Since network marketing requires you to communicate to various of people, network marketers tend to learn how to communicate effectively which can be beneficial in both professional and personal life.
Furthermore, network marketers build teams, which causes them to learn how to motivate and inspire others. These skills can be valuable in any leadership role. Again, having these types of skills can improve your lifestyle in others areas of life.
The bottom line here is that as a network marketer your self-confidence can tremendously improve as you achieve your goals and build your online business. Ultimately, giving you a sense of accomplishment and self-assurance.
What Is The Main Difference Between Affiliate Marketing and Network Marketing?
While both affiliate marketers and network marketers are both considered self employed people, there is a difference in each of their independence. Therefore, it’s important to understand while both can gain more freedom and flexibility, you will have more responsibility.
Independence and Level Of Commitment
As with affiliate Marketing there’s a lower level of commitment because, affiliate marketers don’t have to depend on recruiting and building a team or downline. Additionally, affiliate marketers tend to have more control over their business because, they aren’t tied to one company. Also, affiliate marketers make money from their own efforts.
On the other hand, Network Marketers have to sell products and potentially recruit and keep track of direct and downline recruits. The larger the team the more responsibility you may potentially have. As a network marketer you may have to train your downline so that they too can continue making money. If not, your downline commissions may not be as successful as you’d like.
The bottom line here is, affiliate marketers are not dependent on a team to make commissions. Instead they simply promote products and earn commissions from their own efforts.
On the other hand, network marketers can and in most cases are dependent on their team. Of course, this all depends on the company that you decide to join as a network marketer. In short, affiliate marketers tend to have more independence than network marketers.
The Risk Involved and Compensation Structure
Of course, all businesses, whether its online or local come with some sort of risk. However, its a fact that some businesses are more risky than others. There are a number of factors that can contribute to the riskiness of the business you decide to get involved with.
With that being said, affiliate marketers aren’t immune to business risk. However, the risk an affiliate marketer faces is less risky than other businesses such as network marketing. The risk an affiliate can face are as follows, such as promoting low quality products.
Some affiliate may use deceptive tactics to generate clicks and or sales which wouldn’t effect you but, could leave an impression if you are promoting that same product. Ultimately, causing all other affiliates harder work in sharing the product.
Lastly if you promote low commission rate products, this could cause you to need to generate a lot of sales in order to reach your goals.
As far as compensation, affiliate marketers are only paid when they generate a click, lead, or sale. The commission rate is typically a percentage of the sale, which can anywhere from 5% to 200% of the sale. This all depends on the company and product or service that is being promoted.
Network Marketing tends to be more riskier due to the fact that some MLM companies engage in fraudulent activities. As a result the FTC have been known to shut these type of companies down, way more than an affiliate marketing businesses.
The reason being, network marketing programs have a increased probability to be a pyramid scheme. This is due to most, not all, but most network marketing members primary focus is recruitment and building a downline.
Rather than focusing on both the sale of a product or services and maybe sharing the opportunity with others so that they too can benefit from the program.
Either way, when I first had the bright idea of making money online, I unknowing joined a company called MOBE. It was shut down in 2018. After that I tried another company called MCA and ironically it was shut down the same year 2018. Then all the gurus where like join Digital Altitude. Thank goodness I didn’t join that company because it too was shut down in 2019.
Therefore, I’ve been involved unknowingly with companies that the FTC deems as being pyramid schemes.
Regardless, the compensation for network marketers have many different types of compensation plans. The most common are commission, bonuses, overrides, and royalties.
The point to this section is that regardless, of which business model you feel more comfortable with, there is always some sort of risk. Please do your research so that you are aware of the risks involved. In addition to that always go with a company, that is legit and has a good reputation.
On a side note, if you’re not familiar with the FTC I encourage you to learn more about their agency. They have an entire website with a wealth of information, which includes their more recent enforcement actions. I never thought the FTC was real until I received a surprise check from the MOBE lawsuit so they do play an important role in consumer protection.
The Community Involvement
Although is definitely difficult to say if affiliate marketers or network marketers have more support in their communities both have their weakness and strengths.
While affiliate marketers work independently, they do have support for the most part especially, if they join a community. Like forums, affiliate marketing platforms, other bloggers, or social media groups. Of course, many of these groups ultimate goal is to sell their product, course, or service to you.
On the other hand, if you decide to ride solo, then an affiliate marketer will not have a community nor support. Additionally, there are communities available to affiliate marketers that may be non active, very little support, or not enough experts to help support you as an affiliate.
Essentially, an affiliate marketer has more online community support from courses and programs. Therefore, when deciding on what community you should join as an affiliate, you’ll want to choose wisely.
Either way, network marketers also have communities. In fact, its a vital part of being in the network marketing business. In my opinion, network marketers have more supportive communities, especially if your upline provides additional support, coaching, guidance, or training.
Also, network marketers have the opportunity to attend more live and virtual events where you can meet and learn from more experienced leaders. Ultimately, increasing your chances of growing a bit faster than an affiliate marketer, especially, if you take action and apply what you learn.
Final Thoughts Of Affiliate Marketing Vs Network Marketing
The bottom line here is that both affiliate marketing and network marketing can potentially help you towards financial independence. Eventually, you’ll need to decide which business model you want to work with.
The purpose of this article was not to say who was better than the other because, both opportunities can be great. It all depends on your skills, efforts, and time that you’re able to put into it.
The goal today was to help you understand that affiliate marketers sell other peoples products, get paid off their own efforts, work independently and they don’t build a team.
While network marketers distribute products, build teams, work together, and get paid from their own efforts, plus their downlines efforts.
Both opportunities can be profitable but, they also have their own challenges. Ultimately the best way to decide which method is best for you is that you should take in consideration, your own skills, interests, and goals.
If you’re good at promoting products and services, and your willing to put in the time and effort then affiliate marketing can be a great option for you.
On the other hand, if you’re willing to learn how to get good at recruiting and building relations with the people, then you could be well on your way to a successful network marketing business.