“Affiliate marketing” and “network marketing” are the two most effective marketing channels that most businesses use to generate leads and increase sales and income of their products.
However, affiliate marketing and networking, are not the same thing there are differences between them.
Many individuals, in my opinion, misinterpret what affiliate marketing and network marketing business models imply.
So, in this article, I’m going to be sharing with you:
- The difference between affiliate marketing and network marketing.
- The business models in both affiliate marketing and network marketing.
- The compensation plans in both business models.
- The pros and cons between affiliate marketing and network marketing.
- The skills required with both business models.
- Examples of successful programs/companies in both models.
- And how to decide which model is right for you.
That being said, let’s dive in!
Table of Contents
Understanding Affiliate Marketing Business Model
Affiliate marketing is a process, marketing strategy, or tactic that involves advertising businesses or an individual product or service in exchange for a commission on the sales.
Affiliate marketers search and sign up for an affiliate program. Then promote it to his audience.
And when the customers buy the product through the affiliate, the affiliate earns a commission.
The product owner or the business benefits from the increased sales, while the affiliate benefits from the customer earned.
- Recommended Reading: I wrote another article where I go into more detail on what affiliate marketing is and how it works. Check it out.
Understanding Networking Marketing Business Model
Network marketing is also known as multi-level marketing (MLM). Network marketing is a business concept that relies on recruiting other people to become agents or distributors of a product or service.
As a distributor in network marketing, you may need to build a network of people or partners to help you generate leads or close sales.
Distributors sell the product directly to customers, while the company compensates them for their sales or for recruiting new distributors.
The distributors can also earn commissions from the sales made by their recruited team.
The Similarities Between Affiliate Marketing And Network Marketing
Here are a few things that “affiliate marketing vs network marketing” have in common.
- Both affiliate marketing and network marketing are done on the Internet.
- Both business models require proper marketing skills and hard work to achieve success.
- Both business models are a form of direct sales: selling products or services directly from the producer to the consumer through an independent representative.
Compensation Plans In Affiliate Marketing
How you get compensated in affiliate marketing is straightforward.
You get compensated for each sale you generate through your affiliate link.
There are several ways you can get paid in affiliate marketing, eg:
- Pay-Per-Lead, etc
And the affiliate commission can be in the following:
- A percentage of the sale of the product
- A fixed amount
- Monthly recurring income, etc
Depending on the agreement between the affiliate program and the affiliate.
The Compensation Plans In Network Marketing
The compensation plan in network marketing is different than in affiliate marketing.
In network marketing, distributors or agents earn a commission in the following ways:
- From their direct sale
- From their referral sales
- Bonuses for referring a certain number of people to the business
The Pros And Cons Of Affiliate Marketing
Here are a few advantages and disadvantages of affiliate marketing.
Pros of affiliate marketing:
- One of the benefits of affiliate marketing is that you don’t have to create your own product or service to make money with affiliate marketing.
- You don’t have to deal with shipping of product, refund, customer support, etc
- It easy to get started with affiliate marketing
- You can earn passive income by promoting products or services you believe in or have used before.
Cons of Affiliate Marketing
- One of the disadvantages of affiliate marketing is that you don’t have control over the product you promote (how much you can potentially earn from promoting the product)
- It can be challenging to grow or scale your affiliate business, especially if you’re in a highly competitive niche.
The Pros And Cons of Network Marketing
Below I share with you a few advantages and disadvantages of network marketing:
Pros Of Network Marketing
- One of the advantages of network marketing is that, if you’re able to build downlines, referrals, or a team of distributors who are also constantly promoting the business, you can earn money on auto-pilot without having to do any active work again.
- Network marketing provides a flexible way where both you and your team can earn an income.
Pros Of Network Marketing
- In network marketing, the person who introduces you to the business is always going to earn more money than you.
- In network marketing, it can be difficult to requite or build a team of distributors, especially if you’re starting out.
Skill Sets Required For Affiliate Marketing
When getting into affiliate marketing, there are some skills you need to master to see success with your affiliate business.
Starting affiliate marketing, you need to learn skills such as:
- Social media marketing
- Content creation and content marketing
- Email marketing
- search engine optimization (SEO)
- A sales funnel, etc
Affiliate marketing can be very lucrative when done correctly, so, you must master the above-mentioned “skills”
You also need to learn excellent communication skills, as this will help you persuade potential customers to purchase your product.
- P.S. I have another article where I share some crucial skills needed for affiliate marketing success.
Skill Sets Required For Network Marketing
Here are some important skills that are required to succeed in network marketing.
- As an agent or distributor in the network marketing space, you need to have excellent communication skills, as this will help you to be able to recruit and retain new distributors.
- You also need to have a basic understanding of marketing and sales, as well as personal development skills to motivate your downlines or team.
Examples Of Successful Affiliate Marketing Programs
There are tons of successful affiliate programs out there in the affiliate marketing industry.
Here is a list of some of the successful affiliate marketing programs:
- Clickfunnel Affiliate Program
- Legendary Marketing
- Affiliate Lab
- 123 Affiliate Marketing
- eBay Partner
- Amazon Associates, etc
P.S. I wrote another article where I share with you some of my best affiliate marketing programs and courses. You can check it out here!
Examples of Successful Network Marketing Companies
There are many excellent network marketing companies out there with great products and services.
However, you should always do your research before joining or signing up with any network marketing companies.
That said, here are some of the best and most successful network marketing companies.
- Mary Kay
NB: Before joining any company you should evaluate the 3P of this industry.
- Profile: You should check the following things in the company’s profile: How long has the company been in this industry? How many people are associated with the company, Does the company have global expansion? etc
- Product: You should always check product certification of quality.
- Plan of the business: A good direct-selling company never charges a fee for joining.
So, How To Decide Which Of The Two Models Are Right For You?
Well, deciding whether affiliate marketing and network marketing which is right for you will depend on factors such as your interests, skills, and goals.
To help you out, if you’re good at marketing and have a decent number of visitors to your blog, website, or followers or subscribers on social media, maybe you should start affiliate marketing.
Affiliate marketing is easy to get started and you don’t have to create your own product or services, this makes it ideal for those who are just starting out in the online marketing world.
And affiliate marketing when done right can earn you a lot of money than network marketing.
On the other hand!
If you’re good at building and maintaining a team, well, network marketing may be your best bet (I mean, it might be your right choice).
But one thing about network marketing is that it requires greater time, effort, and commitment to build a team and generate significant income.
However, if you’re able to build a solid team in network marketing, you can earn money passively and achieve financial independence.
Whichever model you pick, you must work hard and be patient, as both require consistency, dedication, and commitment to achieve success.
And also Both are not super get-rich-quick kinds of things, it takes a fair amount of time and hard work to make money from any of them.
Frequently Ask Questions
What’s The Difference Between Affiliate Marketing and Network Marketing?
The differences between affiliate marketing and network marketing are:
Affiliate marketing is an arrangement between you (the affiliate) and another company in which you get paid a commission for sending traffic to their website or product.
In affiliate marketing, you get paid only if the traffic you send over successfully purchases a product or performs a certain action.
Once the sales are made, the system or the program will automatically record and pay out the commission to the assigned affiliate.
In Network marketing, you represent a company or brand and make person-to-person sales as an independent representative.
In network marketing, you’ll mostly have to build a network of people or refer a person to join you before you can make money.
And your profit value or margin is determined by the number of people you have signed up under you.
Is Affiliate Marketing The Same As Network Marketing?
No, affiliate marketing is not the same as network marketing. The term affiliate marketing refers to typical online marketing or advertising where a company (which is also known as merchants, vendors, or affiliate networks) offers a commission to people (affiliates or publishers) for selling their product or service. Whereas network marketing refers to a business mode based on person-to-person sales by a network of distributors.
Which Business Model Make More Money, Affiliate Marketing Or Network Marketing?
I have done both affiliate marketing and network marketing, but I found affiliate marketing more rewarding than network marketing. With affiliate marketing, you are probably going to be paid a higher percentage of the value of each product you sell. You could even earn up to 50% to 75% per sale. While, with network marketing, you’ll start small and the returns will be very small for the amount of work you put into it. You’ll typically earn less than 5% on products you sell or for people you recruit.
Can I Do Affiliate Marketing And Network Marketing Together?
To put it simply – yes, you can do affiliate marketing and network marketing together. While there are differences between the two business models, they share some similarities and can complement each other. Combining these two strategies can allow you to reach a wider audience, create multiple streams of income, and increase your income.
Is Network Marketing And MLM The Same?
Network Marketing And multi-level marketing (MLM) are two terms that are often interchangeable. Network marketing typically involves selling products directly to customers or consumers through a network of independent distributors. These distributors earn commissions on the products they sell. While MLM involves building a network of distributors who not only sell products but recruit new distributors into the network. In MLM, distributors earn commission not only on their sales but also on the sales by the client or distributor they recruit.
That’s It Folks!
In every business, marketing is extremely important for success. Marketing helps businesses build or increase brand awareness, reach more potential customers, and generate more leads for their business and this helps them increase their product sales and income.
And affiliate marketing and network marketing are the two most effective marketing channels that businesses use to reach their ideal client and generate sales and income.