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Last Updated on August 4, 2021 by Mary Emmer
Confused about the difference between affililiate marketing and network marketing? If you’ve been researching different home-based business models, you’ve probably come across both network marketing and affiliate marketing options. Not sure what to do? Here’s the rundown of the difference between affiliate marketing vs. network marketing and which one might be best for you.
Affiliate Marketing vs. Network Marketing
In the battle between the affiliate marketing vs network marketing business models, it’s important to note that both can offer legitimate ways to make money. But to know whether they would be suitable for you, it’s essential to understand what each one is and what would be required of you before you would make any money.
What Is Network Marketing?
Network marketing is a business model that goes by a few different names, including MLM, referral marketing, multi-level marketing, and direct sales.
This business model is when a company markets its products and services via a distributor network rather than using more traditional marketing forms like offline and online advertising and then selling directly to the public. In a network marketing business model, the company’s products and services are only available to be purchased from a distributor of that company.
You may have heard of some of the most well-known network marketing companies like Mary Kay, Avon, Herbalife, or Amway. There are hundreds of different MLM companies out there selling a wide variety of products and services.
When you start a network marketing business, you are recruited by another distributor and work as part of a team. You will then be required to recruit others onto your team to build your network or organization.
While many MLM companies now offer a way of becoming an affiliate for free, you almost always have to incur a startup cost in the form of some type of starter package to position yourself to qualify for making any significant money in their compensation plan. In addition to the upfront starter costs, you will more than likely have to sign up for a monthly auto-ship of whatever products and services the company sells. Again, to position yourself for the highest payout in the compensation plan, your auto-ship might be higher than you would like.
What Is Affiliate Marketing?
Affiliate marketing is a business model where you can earn a commission by promoting and selling a company’s products and services.
Basically, it means that you sell “other people’s stuff.”
That may sound overly simplistic, but that’s basically it. You sell other people’s stuff. And I love this business model for so many different reasons. You can check out 11 of them here!
In reality, affiliate marketing sounds a bit like network marketing. Because either way, you’re selling other people’s stuff. But there are two significant differences.
First, in affiliate marketing, you can choose which products and services you want to promote and sell vs. in a network marketing company where you’re required to sell only that companies products.
And secondly, in affiliate marketing, there are no levels. You earn a commission on whatever items you sell vs. in network marketing where you are encouraged to build an organization (or recruit people). Hopefully, that organization duplicates through many levels, and you may earn commission on all of these levels.
When you start an affiliate marketing business, there is little or no upfront cost.
There are thousands of different affiliate programs that you can join for free. Once you have signed up as an affiliate, you can promote various products and services, and when someone clicks on one of your affiliate links and purchases something, you earn a commission.
You may think you’re not familiar with any affiliate programs, but think again! Have you ever heard of Amazon?
Yes, the Amazon Associates Program is one of the most well-known affiliate programs that exist. But that’s not the only one you may recognize. Almost every major retailer has an affiliate program. How about Walmart, Target, and Best Buy? Have you ever heard of those? They all have affiliate programs that you can join for free.
Interested in starting an online business?
Affiliate Marketing vs. Network Marketing – Pros and Cons
Network Marketing Pros and Cons
Network marketing is an entirely legitimate business model, but it gets sort of a bad rap because some companies operate their businesses in an illegal way.
Sometimes, people refer to MLM companies as “pyramid schemes.” And unfortunately, some companies have run illegal pyramid schemes and have been shut down by the authorities due to their illicit activities. These activities usually involve recruiting operations whereby they compensate their distributors for recruiting only and don’t make any effort to sell products and services.
Another problem with network marketing is that many of the products or services sold by these companies have no market other than their distributors. In other words, the only people that would want to purchase the products would be its distributors.
A real test of whether the products or services have value in the marketplace is whether someone who’s not a distributor of the company would purchase the products or services. A reputable network marketing company should have a large number of non-distributor customers.
And finally, while it’s possible to build a large team of successful distributors and residual income in your organization over time, it’s important not to be lured into joining a company based on the promise that you will earn a gigantic income in a short amount of time. It’s not quite as simple as that.
On the flip side, a network marketing business with a reputable company with reputable products and services can be a good fit for some people. As a distributor for a network marketing company, you can work from home on your schedule. The promise of flexible hours can be appealing to people looking for a part-time solution to make some extra money.
You do need to enjoy talking to and working with people. That’s the “networking” part of this business. But if you have some people skills and enjoy working with people, either in person or online, then a network marketing business could work for you.
Affiliate Marketing Pros and Cons
Since affiliate marketing is my favorite business model, it’s hard for me to think of any disadvantages. If I had to come up with any, I guess I’d say that one disadvantage would be that you work alone. If working at home alone and without a “team” would bother you, then affiliate marketing might not be right for you.
Another thing is that you have to have some knowledge of the internet and some computer skills to start. While it’s not impossible that a person could get started without either of those things, it would be much harder in reality and would take a lot longer to gain any traction with your business.
My list of advantages to building an affiliate marketing business could be endless, but I will stick to just a few here.
First, if you are looking for a business that doesn’t require you to talk to people (especially friends and family) to try and sell stuff or try and recruit them into your business opportunity, then affiliate marketing would be a great fit for you.
Network marketing companies are notorious for wanting new distributors to make out their list of everyone they know when they get started. Why? So that they can contact them all and beg them to either buy their products or join their business opportunity. With an affiliate marketing business, your customers will find you online. And learning how to position your products online so your customers will find you is a skill that you will learn. Calling friends and family is not part of the marketing plan in an affiliate marketing business.
Secondly, you can build an affiliate marketing business around almost any type of niche. So it’s easy to choose a niche that interests you. It could be a favorite hobby of yours, or just a niche of some sort that you enjoy researching, or one that you’re already an expert in. You can start and build an affiliate marketing site around any of those things.
Last, although you need some knowledge of the internet and computers, you don’t need to be an expert. You will gain all the skills you need by taking an online affiliate marketing course like this one that I took, which taught me everything I know about affiliate marketing.
Bonus Affiliate Marketing Training Tip
The affiliate marketing training program I recommend solves several problems in addition to giving you the best affiliate marketing training available anywhere online today.
First, you can start for free and even get a free starter website.
Also, this affiliate marketing training platform is not just training. It’s a virtual online community of people learning how to build an online affiliate marketing business. You get to be a part of this virtual community, interact with other members, ask questions, and get help while learning to build your business.
That means you can be in business for yourself but not by yourself!
So, did this article help you to better understand the difference between affiliate marketing vs. network marketing? Which sounds like a better fit for you?
Is this your first visit to Affiliate Cents? If so, you can learn a little more about Affiliate Cents and me here.
Hi, I’m Mary. Thanks for visiting me here at Affiliate Cents where I offer affiliate marketing training, tips & resources that will show you how to get started in the awesome world of affiliate marketing. You can read more about my story here.