Today we want to five deep into the question of Affiliate Marketing versus Network marketing. Both have been around a while, but which is best for your business?
Network marketing has been around for well over a century, but it got a bad rap because of the various pyramid schemes. This does not mean that all networking companies are bad—there are legitimate ones out there that can really bring in money.
In more recent years, affiliate marketing has taken over as the most popular type of online marketing format.
But which one is better? What is the best type of business model to go after? In this Affiliate Marketing VS Network Marketing review, I will help you make that decision. I have to be clear though, I will review both of these business models from the perspective of the marketer, not the business owner.
I will discuss and compare:
- Ease of Joining
- Product Selection
- Potential Profitability
- Customer Acquisition
- Ease of marketing
Let us get started! Hope you can come along for the ride!
Ease of Joining
In affiliate marketing, the only thing that you need to do is to sign up for an account. On most occasions, the registration is fully automated, and you will get approved the moment you verify your email address.
Network marketing does not work this way. To be able to join, you often have to attend a seminar, and you have to know somebody from the inside.
While nobody gets rejected for membership in network marketing, the membership process is tedious, and it can take some time. You have to fill out the paperwork, pay the “registration fee,” then wait for a call from the company to confirm that your data is now in the system.
And speaking of costs, affiliate marketing is free. In networking, you either have to pay membership fees or at least buy a set of products. The underlying principle in network marketing is that you are not a good ambassador of the product unless you are using it. You may also have to pay for your marketing materials.
In affiliate marketing, you do not need to buy the product. All you have to do is to go to the affiliate registration page, and then sign up.
Once done, you will get your affiliate link, and you can start promoting the products of your choice. If you use websites like Clickbank, you do not even have to register several times. There are many affiliate marketplaces where you only sign up once, and then you can enroll to become an affiliate of hundreds of products.
Again, it is rare to get disapproved if you apply as an affiliate marketer. However, there are many rules that you have to comply with, especially FCC rules. If you break these rules, you can get banned. But as far as registration is concerned, affiliate marketing wins this round.
It is true that there are dozens of products you can sell in the network marketing business. These are usually physical products such as make-up, clothing, shoes, vitamins, and many more.
In affiliate marketing, there are thousands of products that you can choose from. Here are some examples:
- Software programs – this includes software-as-a-service products like website builders, apps, servers, web hosting, and so much more.
- Games and movie purchases or subscriptions – you can be an affiliate of companies that offer movie streaming services, or sites that sell games and DVDs.
- All physical products you can think of – Amazon itself is a good place to start. If you become an Amazon affiliate, you can promote all the products you can find in Amazon.
- Financial products – you can promote insurance, investment products, bitcoin and other digital currency products and investment platforms, and so much more.
You can even be an affiliate marketer for real estate products if you want. If you really think about it, there really is no limitation in affiliate programs as far as product selection is concerned.
But what about with network marketing? You are stuck with what you have in your locality. For example, if the only network marketing companies in your local are Avon and Tupperware, you really have no other option.
But you are selling just the same, right?
Well, product selection, or niche selection, is the fundamental pillar of success in network and affiliate marketing. You cannot sell a product that you do not believe in, or a product that you do not understand.
The great thing about affiliate marketing is that you can sell products that you love—products and services that you are passionate about. In affiliate marketing, there are literally thousands of products that you can choose from, and you can start selling products that you are already an expert about. Much more flexible than most network marketing opportunities!
Now, this is really debatable, so let us review the profitability mechanics of the two business models.
In affiliate marketing, you get a commission for each sale that you make. Most commissions are one-time, while some are recurring. There is no telling how much you can earn exactly because different companies offer different commission rates.
Here is some of the good stuff about affiliate marketing:
- Around 4% to 20% commission
- There are products where you can get recurring monthly commission
- You can benefit from the same link over and over again
Now, let us take a look at network marketing. In this line of work, you also get a commission. Like affiliate marketing, the commission is based on a percentage. Since the things you sell here are individual products, you can get a recurring commission, provided that it was you who processed the sale of the customer.
One good thing about networking is that you have downlines or members. If these members under you made a sale, you also get a commission from their sale even if you did not do the work.
Yes, some affiliate programs also have multi tiered commission structures, but it is less widespread than in network marketing.
So, here are the benefits of networking from a perspective of profitability:
- Earn from your members even if you do not do the work
- Get recurring commissions on most products
One big caveat in network marketing is that if you stopped working, you no longer earn money. While many networkers market their business model as a way to earn millions, this is a rarity—only those who joined the bandwagon earlier on really get to become millionaires. Those who joined late are not likely to get the same success.
Also, you will not get a recurring commission in network marketing if your customer bought the product from someone else on the second purchase. The system will register that sale to another seller, not you, even if you made the first sale. In affiliate marketing, the customer who bought from you is listed under you for the rest of his or her purchasing life.
Ease of Delivery and Fulfillment
Before you choose between the two, the one thing that you have to take into consideration is how you will deliver the item to your customer.
Here is the process for network marketing:
- You talk to a potential customer and sell
- Customer orders from you
- You buy the product from your distributor
- You deliver the items to your customer
Now, here is how it works in affiliate marketing:
- You create marketing campaigns
- Customer clicks on your link
- Customer orders from the merchant
- Merchant delivers to the customer
So, what do you think works better?
The obvious answer is affiliate marketing.
In network marketing, you are responsible for the product delivery. This is a massive headache, if you ask me. Also, if the products are defective, your customer is going to blame you.
Affiliate marketing is not like this. The customer knows that you are merely a promoter, or an influencer. When a customer buys, he or she is buying it from the merchant’s website. All transactions therefore are between the merchant and the customer.
Even if you are selling a physical product, you are not liable to ship it. The merchant does this. For example, you can promote the best chainsaws on Amazon. If a person clicks on your link and goes to the Amazon product page, Amazon is now responsible for that customer moving forward, not you.
You will never have this luxury in network marketing. You need to go to your distributor, pack the items, and then ship the items to your consumer. The only alternative is that you stock up on the physical products, store them in your house, but you will still have to ship them.
Or, you can do Amazon FBA. You buy lots of products from your distributor, send them to Amazon, and Amazon will ship it to your customers. But still, this is an active way of selling, not passive.
Ease of marketing
Let us take a look at the many ways by which you can market your products for both business models.
In affiliate marketing, you can do the following:
- Website – you can write blogs and position yourself as an expert in your niche. You can embed your affiliate links inside your blog posts.
- YouTube – create content that people will love to watch. You can embed your affiliate links in the video details, too.
- Social media – you can create your Facebook page, Instagram page, and other social media profiles. You can build a following, and then make a sale from your affiliate links from these sites.
- Ads – you can create and publish ads on any network. You can do this on social media sites, Google, YouTube, and many more.
I have to say that you can do the same for network marketing. But there is one big challenge you will face. How will the customers order your product?
If you do network marketing, you must have a website where you can drive traffic. Without it, your only other option is to meet up with them, or talk to them via phone or a messaging app. While this can work, this is not always very effective.
In affiliate marketing, you only have to leave your link. Any customer who is interested in making the purchase will do it.
And the best part with affiliate marketing is that it has cookies which usually last for 30 days. If a customer opened your link, and decided not to buy, you will still receive a commission if he or she purchases that same item within 30 days.
This cannot happen in network marketing. With this type of business, you have to take the order yourself, and then submit that order form to your merchant. If the customer decided to make a purchase, but contacted someone else, you do not get that sale at all.
Clearly, affiliate marketing wins this round again.
Affiliate Marketing VS Network Marketing: Which is Best for You?
In my opinion, affiliate marketing is the winner in all rounds. It has all the merits of a business model that will help you get established as a successful entrepreneur.
I feel like Network marketing was all good back in the day before widespread use of the internet, but these days it is more like a dinosaur best put to bed! Affiliate marketing allows you to move everything fully online, making it a much simpler and more efficient type of business.
Having said all of that, network marketing is great for people who are not internet and computer savvy or plan to work face to face in their local markets. If you enjoy building face-to-face relationships with your customer base, this would suit your better. However, it requires more work than affiliate marketing.
For most people in the modern business world, they would choose affiliate marketing over network marketing most days of the week!