If you are in your first attempts of making money online, you are probably trying to figure out the best way to do it. There is a lot of Controversy of what’s better. Today we are going to dive into the difference of Affiliate Marketing vs Network Marketing. I will explain what each one is, and how it works.
What Is A Network Marketing Business
Network Marketing is often referred to as Multilevel marketing (MLM). The business model tends to run on independent contractors that usually buy into the company, and then earns commission on the products that they sell.
MLM distributors sell the products by direct selling, or word of mouth marketing, often times talking to family members and friends about the products. They also encourage other people to join as a distributor so they can be apart of your down-line. The more you sell, and the more your downline sells, the more you money you make.
This can often seem appealing to the average person because you have the opportunity to escape from the 9-5, that everybody hates. You can be your own boss, work your own hours, and basically create your own success.
Often Referred To As A Pyramid Scheme
A common term, often used, to describe multilevel marketing. While there are a few legitimate companies, most are illegal pyramids. If you have been watching the news lately, the most recent pyramid scheme to get shutdown was Vemma. Herbalife has been under a lot of pressure as well, about their operations.
Often times, The CEO and top distributors will talk more about recruiting than the actual product. The more people you recruit the more money you will make. In this industry it’s really all about hustle. You need to be constantly recruiting more people, and then depend on their performance to make a substantial income.
Many times you are paying a high “membership fee” to join and then told to purchase that companies products. typically they are over-inflated priced products to cover the multi-levels of payments that stream through your downline. This makes it more difficult to acquire customers because of the high cost.
Because it’s difficult to recruit, often times, people that you meet might invite you over for maybe a cup of coffee. You know, “Get to know each other better.”
Then once you are already there, they go and start making an attempt to recruit you to do the same thing that they are doing. Often times they will say,” How would you feel to make money referring people to use the same products that you already use?” Of course, you already know what you just got yourself into, but it’s too late.
You have to sit there and hear what they have to say. They did invite you over for a cup of coffee, right? They tell you instead of using the shampoo at Walmart, buy this better quality shampoo and tell friends and family to do the same.
You ask them what the price difference is; it’s always a lot more expensive than what you pay. They just try to convince you it’s a better living and you can make money off of referring others to do the same. Just one big cycle.
Most people fail though. It’s tough cold calling. That’s basically what you are doing. Nine out of ten friends will more than likely tell you that they aren’t switching. I know, I’ve tried it.
Pros And Cons Of Network Marketing
To give you an idea of how well everything may work. Here are the Pros and Cons. Ultimately, you make the decision whether or not this is the type of business you want to pursue. So, here they are:
- Potential to make a lot of money
- Sometimes the products you promote can be very appealing and useful
- More time to spend with family; if successful
- You don’t have to create your own product
- legitimate companies can be cheap to buy into
- You can only sell their products
- You have to constantly recruit more people
- There could, potentially, be thousands of MLM marketers in your area
- Most sales are generated offline through direct selling
- You will here hundred’s, if not thousands, of no’s. It doesn’t matter whether you mention the business opportunity or the actual product
- The product you are selling is typically over-inflated on price
- Your coach is typically your friend that just joined too
- You depend on your “downlines” performance. If they aren’t selling, you aren’t making money
- More often than not, you have to keep purchasing the product yourself to qualify for payments
Honestly, the list goes on, but those are a few of the things that you should see when making a decision about which method you want to use to make money.
MLM’s Business Model Cannot Sustain Forever
There are plenty of Legitimate, good marketers out there. A lot of them are the CEOs and top distributors in the company. However, a vast amount also use very unethical business practices in the marketing scheme. Before you start asking, they will already know what questions you will have, and be able to answer them in a way to persuade you to become another sale for them.
They will tell you what you want to hear. You’ll be shown all the success “Average Joe” people are having that are making any substantial wealth. This is so they can convince you it’s not a pyramid scheme.
“This company is so much better than the rest. Trust me. Check out that guy. He got a Mercedes from the company.”
Ya that guy having the expensive car might be true. But, that just means he is a top distributor and has 1000’s of downlines under him. That took A LOT of effort. Which is the truth. Multilevel marketing is not quick or easy.
Unless you’ve got tons of friends, all willing to basically work so you can make money, it will be quite a bit of time to recruit enough people.
If you last that long, and can afford it, you may recruit enough to be high enough in the pyramid to make “decent” commissions. It’s a ton of work to pitch the product and sell it, as well as recruiting others to join your network.
Also think about this. If you are recruiting people so you have somebody else selling for you, what will the next person do? make you more money, or focus on finding their own recruits?
Now, let’s just say, for a second, you reach the top of the pyramid. Does this guarantee you will be making the big bucks? Not really. You are told you are running your own business, but truth is. You depend on others to run it for you.
If your recruits don’t sell, then you need to still do it yourself. Plus, don’t forget the fact that only that companies products will earn you money.
The owners of MLM companies do make millions. When they sell the products themselves, they get most of the commission. Another tactic many use is to sell you additional marketing plans that are supposed to help increase your performance.
You’ll get some kind of incentive, whether it allows you to sell ” higher ticket” products that earn you higher commissions or give you some tool that is suppose teach you more strategies for marketing.
A lot of people will listen to the hype, pay more money for those incentives and packages, then eventually quit after many months or years of making no huge amount of income.
Even though Network Marketing is growing, it has been growing in the amount of problems the industry is facing. So, now let’s move onto affiliate marketing.
What Is Affiliate Marketing
In simple terms, Let’s say you work at a gym. When people talk to you about where they should workout, they will ask you for advice. You might tell them to go to your gym and let them know who referred you.
Once your friends tells your gym their referral, you might get a small bonus or get another reward for bringing the gym a new customer (your referral).
In this example, you are the affiliate. Someone new came to the gym because of your efforts. Because of this, you get a commission for your marketing efforts. In the online world, affiliate marketing would work like this:
- Choose An Interest-So, choose something you are passionate about or have an interest in. Maybe you trimmed off 100 pounds and now you want to inspire others to do the same, Maybe you’re a world traveler and want to teach others how travel on a budget, or maybe you have a love for arcade video games and just can’t stop talking about them. Literally anything that you can constantly enjoy talking about can be your topic.
- You Build A Website- Often times people, new to affiliate marketing, think that it’s difficult to build a website. It use to be, but now it’s not anymore. It literally takes three clicks to have a full functioning live website. It can all be done in under 30 seconds in four simple steps. Your website is what you use to talk about whatever companies and products you decide to promote. There are millions of companies in all niches, so you can choose anything. A lot of people use Amazon because of the variety of products to choose from.
- Attract Visitors- Before money can made, you need visitors. Just like how I’ve attracted you to read this article, you would be doing the same. Writing articles about your topic or interest you decide to choose. It might be tutorials, or reviews, or the latest news going on in the world. You attract visitors by creating quality content. You need to make your website helpful and informative. It takes time to attract visitors, but remember, you are creating a business. There are many ways of attracting visitors. Some methods are through PPC, Social Media marketing, Email Marketing, SEO, etc.. Starting off, try not to do all of them at once. Become more experienced first.
- Earn Revenue– The final step is the most exciting. Now you get to see the fruits of your labor pay off dividends. The products you promote, whether it’s Walmart, Amazon, Nike, etc.. You will start earning commissions on the links people click, that you have posted on your website.
Affiliate programs are what you join to promote that specific companies products. They are free to sign up since you are basically advertising for them. You can sign up for as many or as little amount of programs you choose. I would first start off testing one program so you can taste the waters.
Pros And Cons Of Affiliate Marketing
No matter what you try to do for a living, there will always be advantages and disadvantages. We’ve already dived into Multi-level marketing, now lets dive in to affiliate marketing dis/advantages.
- Overhead is affordable by most people.
- You can make A full-time income
- You get to work from home
- You only need a computer and internet access to start
- Earn while you learn
- You create a passive income
- You are your own boss
- You can promote almost anything you want to
- Anybody can start, no skills required
- Only get paid when you make a sale
- Can be competitive if you don’t learn SEO
- It can take months before you see any kind of results
- Some MLM’s try to disguise themselves as affiliate marketing
- Self discipline can be hard with the daily distractions at home
Though there are disadvantages, if you do your research, it is well worth it to start. Whether it’s to get started for retirement or you are just getting out of high school and exploring your opportunities.
Affiliate Marketing vs. Multi-Level Marketing
So, how do they compare? based on what I’ve told you above, MLM is a lot harder.
- You can make money doing both.
- MLM takes a lot more capital to start than affiliate marketing.
- Affiliate marketing allows you to choose which products to promote, Network Marketing forces you to sell only one specific companies products.
- You can try promoting multiple companies with MLM, but it will be super difficult to recruit people to multiple companies in person.
- MLM starts in your local market, Affiliate marketing allows you to expand to the global market reaching more of an audience at a time than MLM
- In MLM you rely on other peoples efforts to make a profit while in affiliate marketing; it’s your work that creates your success.
- You don’t have to bother your friends and family about joining if you do affiliate marketing as where MLM is always telling you to refer family and friends
- Many MLM Companies have been shutdown and deemed as pyramid schemes; Vemma being the most recent
- Affiliate marketing training is a lot better, in my opinion, than network marketing.
- Affiliate marketing gives you more opportunity to create multiple streams of income
Like I mentioned before, Ultimately, it’s your choice on which path you want to go. I have tried both methods, and affiliate marketing is the one I have been most successful in. I’m also not a big fan of cold calling, since this what you are doing after all your friends turn you down.
Best Training Platform For Affiliate Marketing
While I will not vouch for network marketing. When it comes to affiliate marketing, I have only one program in mind. If you have read my other articles, this wouldn’t be the first time I mentioned this program. It’s called Wealthy Affiliate, and just click on the link, to check out my review. It’s the most affordable program, with the best training for new to expert marketers. The best part about the program is it’s free to get started, no credit card required. But hey, Check out my review, and you be the judge if Wealthy Affiliate is right for you.
Question and Concerns
Once again, if you have any things on your mind to say or more questions; Please Leave Me Comments. I love hearing your opinions. I promise, leave a comment, and I’ll be responding.