Affiliate Marketing Vs Network Marketing: What’s better for you?

affiliate marketing vs network marketing

Marketing is an important aspect of every business and there are several ways of doing marketing. But the two most discussed are Affiliate Marketing and Network Marketing.

In Affiliate and Network Marketing, individuals or companies can promote products of others and earn commissions.

In this post, we will make a comparison between Affiliate Marketing and Network Marketing. So you can make a wise decision to be an Affiliate or Network Marketer, or even BOTH. 🙂

So let’s start with a brief introduction.

Affiliate Marketing

Affiliate Marketing mainly consists of three entities.

  • Seller
  • Affiliates
  • And Customers

Sellers start affiliate programs for increasing the reach and sales of their products or services.

Anyone can join the affiliate program and start promoting the products of the seller. Each successful sale produces commissions for affiliates.

Affiliates on the internet can either share reviews of products or promote products to a targeted audience which eventually helps the seller acquire more customers.

Network Marketing

Often called MLM, network marketing is a type of direct selling

Companies opt network marketing concept for marketing and distribution of their products.

People involved in network marketing companies can be called direct sellers, distributors, or members.

Distributors join the company in a pyramid-like structure. Please don’t get confused with pyramid schemes, which seem similar, but they are scams.

With the promotion of products, Network Marketers also needs to recruit new people in downline to get more commissions.

Affiliate Marketing Vs Network Marketing

To make the comparison detailed and easy to understand, we are using some comparison parameters.

On every parameter, we will examine both Network Marketing and Affiliate Marketing. So you can make your conclusion.

History

Network Marketing was started in the 19th century and got popularized in the late 20th century.

Originated from the USA, now some international network marketing companies are spread across the globe and most countries also have local MLM companies in operation. Unlike Ponzi schemes and Pyramid schemes, Network marketing is legal.

Affiliate Marketing is relatively a new concept, started in the 90s after the birth of World Wide Web (WWW). Affiliate marketing is an internet-based business modal. With the rise of Internet, affiliate marketing is grown parallelly.

In the last 1-decade network marketing’s growth rate got slow while affiliate marketing is a rapidly growing industry.

How to Join

Affiliate programs and network marketing companies always want more people to participate. 

It is quite easy to join both of them.

For network marketing, a person can directly visit the company’s website and get enrolled, or contact to existing network marketer of a company to become their downline. Choosing the right upline is important, cause upline plays a big role in growth.

After joining successfully person can make the first product purchase.

To join any affiliate program, get register to the merchants’ website and apply for the affiliate program.

There can be an intermediate between merchant and affiliates called affiliate network, ShareASale and ClickBank are two perfect examples.

Affiliates have to register on these intermediate sites and then apply for any affiliate program.

Joining Fees

Generally, there are no joining fees in affiliate marketing as well as network marketing.

Most affiliate programs cost zero to affiliates and any interested person can become an associate and start earning. 

But there can be some provisions to join affiliate programs.

Sometimes affiliates have to prove their audience source or few affiliate program may require qualifications sales for every certain period.

On the other hand, the first purchase of a minimum amount is mandatory in most network marketing companies. 

Network marketers have an option to buy any of the products of the MLM company.

Now even some affiliate programs exist, which mandate one purchase of their products for affiliate, and most of them are scams.

Dummy-products scams held in network marketing now can be seen in affiliate marketing as well.

So be careful and analyze products, it will help to find genuine affiliate programs as well as network marketing companies.

Products

Products are vital, cause affiliate marketers & network marketers both have to promote them. 

Products should be reliable in terms of quality and price. Demanding products make the promotion process easy.

In network marketing, companies may have own tangible products (mostly wellness, cosmetics, and FMCG products) or intangible products (computer courses, holiday package, gift vouchers). 

Most network marketing companies have products with elevated prices, so they can share heavy commissions to distributors. Network marketing companies with intangible products are more likely to be pyramid schemes such as cryptocurrency-based MLMs.

Affiliate marketing provides a wide range of products and one can join multiple affiliate programs at a time, which usually not the case with network marketing.

Amazon sells millions of products worldwide and associates can promote products of their favorite brand as well. While network marketers have to promote products about which very few people aware.

Apart from giant e-commerce like Amazon, affiliate marketing is the core of various online service provider businesses like hosting companies, domain registrars, digital product sellers (i.e. theme, eBooks, and other SaaS).

Commission

Network marketing companies have predefined compensation plans, on that basis network marketers get commissions.

There are mainly two types of commission: retail profit on direct sales, and another is on indirect sales when someone in downline purchases company products.

Sales in downline generate the most commission for network marketers.

If a network marketing company paying for recruitment, then it is a signal of pyramid schemes.

Most MLM compensation plans are complicated and required strong calculations to understand profit. While affiliate programs are more transparent and disclose commission percentages on each sale. 

Affiliate programs may offer recurring commissions if sold products required renewal.

Below is a screenshot of the commission structure of Amazon. They offer 0% to 10% commission and give fixed bounties on sales of different services.

amazon-affiliate-commission

People

For promotion, we require people, to whom we can show products and generate sales.

Network marketer seeks for the customer who can join them in future, so they can make passive income on their every purchase. 

Network marketer generally targets friends and relatives individually and lure them for the opportunity.

Affiliate marketers required a large audience for promotion. It can be social media followers, YouTube subscribers, or website traffic.

Affiliate marketers have to provide affiliate links via which the audience can visit the merchant’s site and make purchases.

Affiliate Marketers need audience channels while network marketers are more oriented towards one-to-one sales. But now the game has slightly changed, network marketers also use internet and audience channels for new recruitments.

The Future

If we consider the previous few years, no doubt affiliate marketing emerge better. 

As affiliate marketing is Internet-oriented, no doubt it will grow more exponentially in the future.

Network marketing is struggling, most people consider the whole industry as a scam and unable to differentiate between illegal pyramid schemes and legitimate MLM.

It’s hard to change the opinion of people towards network marketing. From the beginning, it is a controversial industry and recent stats indicate network marketing is less leveraging.

Affiliate Marketing is also not absolutely pure, here also scam exists.

Often affiliate and network marketers misguide people for more commission. By offering high commissions, companies are selling nasty products using affiliate marketing and network marketing.

Lastly, I want to conclude, Whatever direction you choose, always promote quality products without thinking about the commission.

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