What’s the Difference Between Affiliate Marketing and Network Marketing?
If you are thinking about earning extra money working at home you may be wondering what the difference is between affiliate marketing and network marketing, also known as MLM. Actually, there are a few differences which I will explain.
In both cases you earn a commission on the sales of products to customers. However in network marketing the real income is made by enrolling other people and earning monthly commissions from the business they generate. This is known as residual income, where you get paid every month that person you have enrolled remains a regular consumer of the products. Generally affiliates get paid just once on a sale they make. Occasionally there may be a product with recurring income but this is not typical.
People in network marketing who want to have a large income must spend time training new reps they bring into the business. In affiliate marketing you work independently. There are no phone calls to make or product training. The affiliate just learns the skills necessary to find customers who will purchase the products they are promoting and no personal contact is ever made.
Affiliate marketers usually earn much higher commissions, although the products they promote may be cheaper. Network marketing companies typically pay out 5 – 15% on product purchases whereas affiliates promoting digital products and eBooks can make up to 75%.
A person can build a successful affiliate marketing business without any out of pocket expense, but this is not the case in network marketing. To earn a regular income in MLM requires a monthly autoship, which usually ranges between $50 to $150 a month. It is recommended that anyone doing affiliate marketing purchase the product they are going to promote so they are fully informed as to what they are selling, but it’s not a requirement. Therefore, people on a limited budget will find affiliate marketing is often the best choice to get started.