Affiliate Marketing Vs Network Marketing – Similarities & Differences
Affiliate Marketing vs Network Marketing – Are they the same? Or do they have any differences? Many people tends to get confused between the two, or think that they are of the same thing.
To start off, let me first give you the definition between the two (extracted from Wikipedia):
Affiliate marketing is a marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s marketing efforts. Examples include rewards sites, where users are rewarded with cash or gifts, for the completion of an offer, and the referral of others to the site.
Multi-level marketing (MLM), (also called network marketing, direct selling, referral marketing, and pyramid selling) is a term that describes a marketing structure used by some companies as part of their overall marketing strategy. The structure is designed to create a marketing and sales force by compensating promoters of the company’s products not only for sales they personally generate, but also for the sales of other promoters they introduce to the company, creating a downline of distributors and a hierarchy of multiple levels of compensation in the form of a pyramid.
What I’m going to share with you in this post are the similarities, as well as differences, between affiliate marketing and network marketing:
In affiliate marketing, you work directly with the merchant and you’ll get paid whenever someone purchases the products and/or services you recommend from your unique affiliate link (which is used by the merchants to identify which affiliate generated the sale, thereby allowing him/her to pay the affiliate accordingly).
However, in Network Marketing, you work not only with the merchant, but also with the person that’s immediately above you in the network hierarchy. You’ll get paid whenever someone purchases the products and/or services from you. Not only that, you’ll also receive a cut of the commissions generated by your downlines (meaning those that are under you in the network hierarchy).
In affiliate marketing, you are not responsible in training other marketers to promote the merchant’s products and/or services – It’s the merchant’s responsibility to provide affiliates with the information necessary to promote his/her products and/or services.
However, in network marketing, in order for you to be able to generate more income from your downlines (which is where most of your income should come from), you need to help them with their marketing efforts.
3. Recurring Payments
As far as affiliate marketing is concerned, most of the products that you promote are single payment products (where you’ll only receive one-time commission for every sale you refer), unless you are promoting membership sites where, in order for one to remain as a member, he/she is required to pay membership fees on an ongoing basis.
With network marketing, as most of these products require people to buy again and again (such as vitamin pills, weight loss products, skin care products, etc.), you’ll receive commissions from your customers over and over again (as long as they keep on purchasing these products).
4. Cost To Signup
In affiliate marketing, there’s no need for you to pay to sign up as an affiliate for the merchants (I know there’s a very small minority of merchants that requires you to pay a sign up fee to be their affiliate – I would advise you to move on and promote for other merchants that allow you to promote their products for free instead).
However, in network marketing, you will need to pay a cost to join their company – Where you’ll get their “Starter Kit” with product information, as well as other company information that you need.
5. Marketing Techniques
As far as marketing techniques are concerned, you can use the same techniques to promote products and services for both affiliate marketing, as well as network marketing.
6. Monetization Potential
Both networks, in my opinion, are great potentials for you to generate a substantial income from, as long as you follow proven step-by-step instructions.
I hope that with this article, you now have a clearer understanding of both affiliate, as well as network marketing, along with the similarities and differences between each of them.