In this article, “Difference Between Affiliate Marketing And Network Marketing,” we will not only discuss the differences between the two models but also point out the similarities. This will hopefully, enable you to choose which strategy might well be suited for you.
We will commence this discussion with definitions of the affiliate marketing and network marketing models.
Definitions Of Affiliate Marketing And Network Marketing.
Affiliate Marketing
Affiliate marketing is a business model, that allows the affiliate to promote a product or service of a company using a given link that is unique only to the affiliate.
The affiliate can use different channels to promote said link, and if someone clicks on the link and makes a purchase, the affiliates makes a commission which is generally a percentage of the sales.
You can join an affiliate program by going directly through the company or through a network of affiliate marketing companies such as:
- J V Zoo
- Click Bank
- Shareasale
- Commission Junction
Network Marketing
Network marketing is also a business model that allows individuals acting as independent reps or distributors to sell company products to network of friends, relatives, co-workers or school mates etc. for a commission.
He does so by way of word of mouth, phone and by posting on social media.
Some network marketing companies are single -tier in nature, whiles others are multi-tier. With the single-tier with no layers, you could sell directly to your friends, family members, acquaintances and are paid for your own individual efforts.
However, the multi-tier network marketing model, allows for the building of a sales force of independent reps, as team members to help you promote company products.
With the multi-tier model, you are paid not only for your own individual efforts but also for the efforts of each member in your team and of the efforts of their own team members. You receive a percentage on all their sales.
A Brief History Of Affiliate Marketing And Network Marketing
Affiliate Marketing
Briefly, affiliate marketing got its start in 1989, by a man named William J Tobin who was the founder of PC Flowers And Gifts. He started the idea of affiliate marketing. His program was launched on the Prodigy network which consisted of paying the Prodigy network a commission on every sale.
Because of the success he received., this motivated him to patent his idea in 1996, but was issued in 2000.
William T. Jones’ success further prompted others to launch their own affiliate marketing businesses or directories. Some examples of these are Amazon.Rakuten, Commission Junction, Clickbank etc.
History Of Network Marketing
Network marketing began to gain recognition following the second world war, in the 1940s with the California Vitamin Company, now known as Nutrilite, and the California Perfume Company now known as Avon.
These products were in such a high demand that independent distributors were recruited to increase the sales force. These distributors were encouraged to recruit their friends, relatives, co-workers and other acquaintances. They received commission based on sales of the representatives they personally recruited.
The successes of these companies, gave rise to others launching their own network marketing companies, such as Amway, which utilized the MLM organizational structure. And Amway’s own successes paved the way for creating network marketing companies in countries like Canada, United Kingdom, Australia, Germany and France.
Similarities Between Network Marketing And Affiliate Marketing
Both models give you the opportunity to work from the comfort of home. Since most people have the desire to be their own boss and to work independently, both models are well suited for such ones.
Another similarity between affiliate marketing and network marketing, is that both are based on reward system. You are entitled to a commission if you produce the desired result, that is make sales. So both models are performance driven.
In Both Models, Success Depends On Some Factors
In both models, your success is going to depend on some factors. One of the factors is knowledge. And most writers don’t address this major point.
Therefore, most people who join either models, don’t have the slightest idea as to what is involved and what it takes.
Self education as mentioned is necessary for your success as a business person. Hence, before you join either models, you have to take the time to learn about the how’s of affiliate marketing and the how’s of network marketing. How can you succeed, if you don’t known what you are doing?
So both models are similar in that, both require that you educate and train yourself, and acquire the skills necessary to run a successful business.
Also, not only do both systems, the affiliate marketing and network marketing models require you to known the how’s, but equally important the what, that is what is involved?
Know What Is Involved
So what is involved in both models or systems? The affiliate marketing and network marketing models both require work and effort.
Sadly though, many of the so called experts, shamelessly fail to highlight this essential element for success. Therefore, many who join either models, come in with the attitude that they are going to get rich without having to do any work. They expect others to do the work for them. They are living in a world of illusion or fantasy, not the real world.
In the real world you have to work. If you don’t work you don’t earn, if you don’t work, you don’t eat.
Hence, both models are similar in that, they both require work. Even though one model requires much work than the other, nonetheless, both require work and effort.
Both Require Participants To Possess Certain Qualities
In both models participants must posses certain qualities. You must possess qualities such as determination, persistence, patience and devotion.
In affiliate marketing, these qualities are going to be needed especially when you encounter challenges and obstacles, such as not making money as you might have hoped.
When confronted with such challenges, the tendency for most affiliate marketers is to give up and quit. Why? They lack the determination, persistence and patience.
Also, Needed In Network Marketing
These qualities are also very needed in network marketing. The reason is that in network marketing, you are going to be selling to your circles of network, this will be to friends, family members, co-workers and even strangers, and you might do so face to face.
Do you have what it takes? Are you prepared for the constant rejections. At times, it is going to fake a thousand nos to get a one yes. Can you handle the rejection?
If you don’t have the patience, determination, and perseverance, those rejections can easily overwhelm, frustrate and discourage you to the point that you give up and quit without realizing your dreams.
In view of this, you must develop these qualities, if you are to make it in the network marketing business world.
Network Marketing And Afffiliate Marketing Require Research
Another similarity between affiliate marketing and network marketing is that both models require the affiliate or the network marketer to do research. This is very important.
If you intend to join an affiliate program, then the foremost thing that must be done is, researching the company you want to affiliate with.
This is vital, because if you partner with an affiliate company, that is not trustworthy, is dishonest and has a bad reputation, by so doing you not only risk losing your hard-earned money, but most importantly you could tarnish or destroy your own good reputation.
A good reputation is something that must be protected and safe guarded. Hence, one of the best ways you can do so, is to affiliate with reputable companies.
It is equally important that you research the product you want to promote. Is there a demand for such a product? An evergreen or just a fad? A quality product and therefore beneficial to your audience?
The Same Must Be True Of Network Marketing Companies
The same must hold true of network marketing companies you intend to join.
For the sake of your own reputation and the risk of losing money, the same advice stands. Before you join any network marketing company, it will be in your best interest to research the company and product.
Some questions to ask yourself:
- How old is this particular company?
- What product or service do they offer? Is it valuable and beneficial?
- What is the reputation of the company? Do they have a good track record?
- What support and training does it offer?
Again, it is worth repeating, you have to protect and safeguard your reputation. So it is vital that you do your research before you join a network marketing or affiliate marketing company.
Both Models Offer The Potential Of Making Lots Of Money
In both the affiliate marketing and network marketing models, affords the opportunity for anyone to make lots of money. Both industries are flourishing and prospering.
For example, affiliate marketing is said to be worth well over $12 billion and is still growing. And in 2021, the direct selling industry according to Epixel, made $186.1 billion USD in retail sales. And the total direct sales grew 1.5% year-over-year.
Hence, as you can see both models, offer the potential for anyone to make serious money, you can make passive or residual income. However, this can only happen, if you know what you are doing, and you have the training, skills, education and the proper mind set.
With both models you have the potential to make lots of money and the potential of not making any money.
Affiliate Marketing And Network Marketing Require Traffic
In my previous blog, I have stressed the point that traffic is the life blood or life line of any business, whether online or offline. This can also be true of affiliate marketing and network marketing.
If you are going to be successful either as an affiliate or as a network marketer, you have to make sure that you have the ability to constantly drive traffic to your website or product.
Without a flow of traffic, you are not going to make any money, and in effect your business will fail and die.
Hence, it is imperative that you acquire traffic generation skills which will make available to you a constant flow of traffic.
There are many ways that you can send traffic to your website or product:
- Person to person and building relationships
- Social media
- Paid advertising
- Email marketing campaigns
- Doing SEO etc.
The point being made, is that both models require a steady flow of traffic if you are to be successful.
Both Models Are Competitive
The economic conditions in the world and the Covid-19 pandemic, have forced many people to look for alternative means of providing for themselves and families.
As a result, many see network marketing and affiliate marketing as vehicles that will help them attain their goals and dreams. Therefore, thousands on a daily basis are either joining network marketing or affiliate marketing.
Hence, the influx of people streaming into either models have increased the level of competition in both models.
To be able to succeed in such an environment of intense competition, it will be advantageous for one to acquire the proper training, skills, mindset, resources, tools and knowledge about who your competitors are. You have to known what they are doing to make them successful, and find ways to improve on what you are doing, so that you can do things better than they.
The point being made, is that you must always strive to be one step ahead of the competition in either model you choose to operate in.
Differences Between Affiliate Marketing And Network Marketing
We have looked at the similarities between the two models, now we are going to focus on the differences.
In my previous blog about affiliate marketing, it was mentioned that there is no cost involved to join an affiliate company. You can virtually join any affiliate marketing program for free.
Worth noting, that even though it is free to join, if you however want to be successful as an affiliate, then you are going to spend some money to build a website, buy a domain name, and hosting services. Again, it is worth repeating that you can join or start an affiliate marketing business without money.
Network Marketing
Unlike affiliate marketing which you can start with absolutely no money, this is not however the case with network marketing. You are required to pay a start up fee, membership fee on an ongoing basis, further most network marketing companies expect distributors to buy products and promotional materials. Again, unlike affiliate marketing, with network marketing you have to pay to join. How much you pay depends on each network marketing company.
Another Difference Is The Monthly Quota
With affiliate marketing, you are not tied to a monthly quota requirement. If you don’t make sales for a given month, you are not going to lose your position or be kicked out. If sales are not made, you don’t make commission.
This is not so with network marketing companies. A monthly sales quota has to be met, or you could lose your position. To avoid loosing their position or dropped as a distributor, reps are known to have gone into debt, using credit cards to purchase products. The products remain stockpiled in their garage because they are unable to sell them, they have thus faced financial ruin.
Another Difference Between The Two Models Is The Number Of Business To Promote
The affiliate marketing model, does not restrict the affiliate as to the number of products to promote. The affiliate is free to promote as many products he wishes.
On the other hand, most network marketing companies, place restrictions or have stringent policies regarding promoting another network marketing company’s products.
It needs to be mentioned that even though, affiliate marketing is not restrictive in terms of the quantity of products an affiliate can promote, a word of caution is necessary.
If you are just starting as an affiliate marketer, it will be prudent to focus on just promoting one, and not try to promote too many.products, until you have acquired the skills and experience.
With such skills and experience, you will be able to build your own niche website and promote as many products on it, write quality content, do product reviews on your site and optimize it to have it ranked in search engines, bringing you traffic and sales.
Another Difference Is Closing Sales
Another difference between affiliate marketing and network marketing, is that with affiliate marketing, you don’t close sales. Your responsibility is to promote your unique affiliate link.
And if someone clicks on your affiliate link and buys a product, your task ends right there, because the company from then on does everything including customer service.
This however, is not the case with network marketing. With this model, not only are you involved in the selling activity, but also in the closing. This can create a sense of nervousness and anxieties for new distributors without the skills and experience to close deals.
Recruiting A Difference Between The Two Models
As mentioned, network marketing and the affiliate marketing models allow you to make money by recommending products to people.
However, with the network marketing model you stand to make lots of money, if you can recruit people to help you sell the company’s products. With this model the emphasis is on building a dynamic and solid team. Hence, the more people you have in your team, the more money you will make.
Before the advent of the Internet, the independent distributor, will not only try to sell products to his circle of friends, family members, co-workers and acquaintances, but will also recruit them in his business.
Network Marketer Has The Ability To Recruit Globally
However, with the coming of the Internet, the network marketer has the ability to recruit not just relatives, friends and acquaintances, but can recruit people from all over the world in his team.
Having the capacity to bring hundreds or even thousands of people into your organization, will give you the opportunity to make huge amount of money. Won’t you agree?
How can you make lots of money? With this model, not only are you paid for your own efforts(sales volume), but are also paid for the sales generated by your members and their own team members etc. You are paid % of everything they make.
As you can see, the commission can be a staggering amount. Of course, making such amount is not going to happen overnight. It is going to take much work, dedication, discipline, determination and devotion. And it will also require that you acquire the skills, experience, training and tools that will be vital in building a successful organization.
Unlike network marketing, that requires constant recruiting, this is not the case with affiliate marketing. It does not require that you keep recruiting. You still have the potential of making lots of money as an affiliate without recruiting, if of course you also know what you are doing.
Your Success Will Also Depend On Helping Your Team
Since your continued success will also depend on each individual member in your team, your goal therefore, should be to give the proper help and training to all in your team. Then they also will be in a position to train and help their own down lines, and they also will do the same. This will have a snowball effect on the entire organization.
By so doing, you build a strong and solid network marketing organization, where everyone is a winner and succeeds.
Sadly Though
Sadly though, most network marketing companies are designed in such a way that only those at the top of the hierarchy make the most money, and those at the bottom make no money, but intact lose money. They waste their precious time, effort and money with nothing to show for it.
There is a simple adage that states,” Help people get what they want, and you will get what you want.”
How true that statement is. If you are going to be successful, you must take the time to help others become successful. Hence, if you find yourself in a network marketing company, and you want to be successful, you have to change the old way of doing things.
Make it your aim to have genuine interest in those under you, train and help team members. And always realize that you can only succeed, if they are successful
Affiliate Marketing Is Digital, Whiles Network Marketing Is Personal
Another difference between affiliate marketing and network marketing, is that affiliate marketing is digital, whiles network marketing is personal.
Affiliate marketing is digital in that you can use online marketing to promote your brand. This will include not only email marketing campaigns, social media, and web based advertising, but also text and multimedia messages as a marketing channel.
Unlike affiliate marketing which is digital, network marketing as indicated is personal. It requires talking to friends, relatives, acquaintances, co-workers etc. to get them to buy or join your program.
However, the personal should be more evident in the single-tier network marketing model., than the multi-tier. With the single-tier network marketing, you are talking to your circle of friends, relatives, co-workers, school mates etc The single -tier then can be well suited for the personal face to face approach, due to the size of the number of your contacts.
Not Sketched In Stone
The concept that affiliate marketing is digital, whiles network marketing is personal should not be sketched in stone. Why not?
Prior to the advent of the Internet, the network marketer could easily contact, as mentioned earlier, those that he knows, to try to sell to them or recruit them.
However, with the advent of the Internet, he has the ability to sell and recruit globally. He cannot do so relying on just the personal approach. Hence, since the market place is vast, he will also have to employ digital channels to reach his target audience.
We can clearly see that, network marketing should not just be limited to the personal, but rather a combination of both the personal and digital marketing.
The same can be said of affiliate marketing. It should not just be limited to the digital channels as has been suggested, but it should include both the personal and digital. Why so?
Don’t Be Viewed As A Salesperson
An affiliate marketer does not want to be viewed by your audience as a sales person. If viewed as such, you won’t be successful in your online business. It will be difficult for people to trust you enough to buy your product.
Rather, you want your target audience to see you as a people person. A people person that cares, that goes out of his way to help them, and has their best interest at heart. Their goal is not just to sell them products, but to help them solve their problems.
This will require putting a human face to your approach, having a personal touch, which builds trust, establishes and nurtures good relationships.
With good relationship established, your audience will trust you enough to buy whatever you are promoting.
And you can do so, by way of your email, blogs and social media.
Hence, just as the network marketing model as discussed must include both the personal and the digital, the affiliate marketing model must also encompass both the personal and digital channels, if success is to be attained.
Which Model Is Best For You?
I cannot tell you, you will have to decide that for yourself.
However, what I can say is that, if you are the kind of person, that takes delight in developing and training others, and you have the skills and abilities to build an organization where in all are successful, and you are not afraid of deadlines, then network marketing is for you.
On the other hand, if you have the desire to start an online business, but have no start up money, then affiliate marketing should be the way to go.
The truth of the matter however is, if you are willing to work hard, acquire the training, education, skills, and cultivate the necessary qualities such as determination, devotion, perseverance, and patience, you will succeed in either models.
Conclusion
In this blog,”Difference Between Affiliate Marketing And Network Marketing,” we discussed not only the similarities, but also differences between the two models.
Similarities
We mentioned that both models are similar in that:
- Both allow you to work from the comfort of home, and are based on reward system
- They both require that you acquire the training, skills and knowledge. And that you cultivate qualities such as determination, persistence, patience and dedication.
- Both require hard work, and you have to research the company before you do join
- The affiliate marketing and the network marketing models, we stated, are both competitive and both require a flow of traffic
Differences
What are the differences:
- It was stated that in affiliate marketing, there is no cost involved to join the program. Whereas in network marketing you have to pay to join.
- In affiliate marketing, there is no quota requirement. But with network marketing, you have to meet a monthly sales volume requirement.
- Affiliate marketing does not place limit on the number of products you can promote. However, with the network marketing model, you are restricted from promoting other programs.
- In affiliate marketing, you are not obligated to close sales. On the other hand, network marketing requires you to close sales.
- To make more money in network marketing, you have to keep recruiting, This is not the case with affiliate marketing. You are not obligated to recruit.
It is my hope that you found this blog, “Difference Between Affiliate Marketing And Network Marketing,” to be useful. And if that is the case, I will appreciate, if you can share it with others who might benefit from it.
Further, if you see areas that you feel I need to make improvements so far as this blog is concern, please leave me a comment or two.
Sincerely,
Sten