Is there a difference between affiliate marketing and network marketing?
Many people use the terms interchangeably, with network marketers often referring to what they do as ‘affiliate marketing’ (although rarely will affiliate marketers do the same in reverse).
So, when it comes to affiliate marketing vs. network marketing, are they the same thing?
If not, what are the main differences between the two, and more importantly, which one is the better option when it comes to making money online?
Let’s find out.
What’s the difference between affiliate marketing and network marketing?
What is affiliate marketing?
Affiliate marketing is a marketing technique where you promote somebody else’s product or services and make a commission from every product/service that someone buys as a result.
These purchases are then tracked using a unique link that lets the company know who referred the customer to them.
The company that produces the product is known as the ‘publisher’ or ‘merchant,’ the person who promotes the product is the ‘affiliate,’ and the ‘customer’ is the person who buys it.
Sometimes affiliates work with the publisher directly, and sometimes they use something called an ‘Affiliate Directory’ or ‘Affiliate Network.’
If somebody is working with many different publishers directly, it can get a bit messy keeping up with earnings, sales, login details for every site etc.
Affiliate Networks aim to make the process easier for both publishers and affiliates by providing everything in one place.
An example of an affiliate network is AWIN.
AWIN is a huge directory of both affiliate marketers and companies.
Affiliates can search the database for companies whose products they want to promote (AWIN’s database includes M&S, Boohoo, Missguided, Etsy and more), and all of their links, commissions and sales are tracked in one place, making everything a lot smoother.
One of the main ways that people become successful with affiliate marketing is by creating their own niche websites that rank well on Google.
For example, if your niche is laptops, you would review various laptops and link to the product that you are reviewing.
People who are searching Google for ‘best gaming laptops’ and stumble on your website are already in a ‘buying’ mindset, and so if your review wins them over, they are likely to click the link and buy the product.
You will receive a commission every time somebody buys a product based on your recommendation.
Another popular way to make affiliate sales is by becoming an influencer and recommending products on social media.
For example, if you have a lot of followers on Instagram, brands may send you products (clothes, for example) and give you a special code that your followers can use if they want to buy the product.
Every time someone does so using your code, you will receive a commission.
Influencers with thousands of followers often do well with affiliate marketing, but even micro influencers can make good money in this way, provided that they have an engaged audience.
This, in a nutshell, is affiliate marketing.
What is network marketing?
Network marketing is also known as multi-level marketing, and it is a business model where you do earn money by recommending products to people, but you can also earn money by recruiting others into the business (often referred to as ‘growing your team’).
Unlike affiliate marketing, where you can promote as many businesses as you like, network marketing involves promoting the products of one company.
An example of a network marketing company is Monat, which sells haircare and skincare products.
A more well-known MLM company is Avon, which has been around for donkeys years!
Network marketers typically have to pay the network marketing company to promote their products (usually in the form of a sign-up fee and ‘starter pack’), while affiliate programmes are free to participate in.
Another characteristic of a network marketing company is that it has a hierarchical structure (this is why network marketing is also called multi-level marketing).
Unlike affiliate marketing, where there is just the customer, the affiliate, and the publisher, there are several ranks in a network marketing company, and the higher the rank of the network marketer, the more money they can make, because they earn money from the sales of people beneath them in the company.
This is great for the people at the top, but not so good for the people at the bottom.
For example, when you sign up to a network marketing company, a percentage of all your earnings will go to the person who signed you up, as well as whoever signed them up and so on.
In other words, most of your money will be trickling up to the higher ranks and other people will be rewarded for the work that you have done.
The emphasis on recruiting in these companies also means that the business model is ultimately unsustainable, and it is for this reason that network marketing is often compared to pyramid selling.
The Wikipedia diagram below illustrates just how unsustainable it is – after just a few levels of recruitment, the business would have recruited everybody on the planet and there would be no-one left to recruit!
Another downside of network marketing is that it involves intentionally saturating the market by hiring your own competitors.
Let’s take Savvi, for example, a network marketing company that sells premium athleisure wear.
I might be the only person in my neighbourhood selling Savvi, but because I earn bonuses when I recruit people into the business, I manage to convince my two best friends, my mum, and a couple of old high school friends into selling Savvi as well.
If each one of those people recruits just another two people into the business, there will be a huge number of Savvi reps in my neighbourhood, and only a certain number of people around to buy expensive leggings!
I have saturated the market and made selling Savvi products infinitely more difficult for myself.
Because the business model is unsustainable, most people who join network marketing companies lose money.
In fact, after studying 350 network marketing companies, Jon M. Taylor found that 99.6% of people in network marketing make no money or actually lose money.
It is because of this huge unlikelihood of making money that Not Your Boss Babe does not recommend network marketing.
Some Key Differences Between Affiliate Marketing and Network Marketing
Cost
There are generally no costs involved if you want to sign up as an affiliate for a particular company or directory.
Of course, if you want to build your own website or pay for promotions on social media then there are costs associated with that, but you do not have to pay to be an affiliate marketer.
With network marketing, on the other hand, you have to pay a company in order to be able to promote and sell their products.
This can cost anywhere from $100 all the way into the thousands.
You are then expected to ‘live the product’ that you are promoting by purchasing it and constantly promoting it on social media. These costs can rack up pretty quickly because most network marketing companies have a wide range of different products.
Take Scentsy for example.
Scentsy distributors will make sure to buy every new flavour of wax melt that the company releases so that they can be the first one in their area to start posting about it and recommending it.
In summary, network marketing is a lot more expensive than affiliate marketing, and so this is one of the big differences between affiliate marketing and network marketing.
Monthly Quotas
Another difference between affiliate marketing and network marketing is that with affiliate marketing, if you have a rough month and don’t manage to sell anything, nothing happens.
You aren’t ‘demoted’ to a lower rank, you don’t lose your previously-earned commission, and you aren’t kicked out of the company.
You just don’t make any money that month.
With network marketing, you have to hit a minimum sales target each month, and if you fail to meet this target, you will either lose your rank in the company, not receive your commission for that month, or even be kicked out of the company.
If you are struggling to make sales but you don’t want to suffer the consequences of this, you can game the system by purchasing products yourself as this will count towards your sales target.
Essentially, you’re spending money in order to keep your place within the business.
Number of brands you represent
As an affiliate marketer, there is no limit to how many brands you promote.
On this website you will find affiliate links to many different companies, from web hosting platforms to blogging courses, domain providers and more.
Most network marketing companies, on the other hand, have strict rules about being a member of multiple network marketing companies or promoting another company’s products or ‘opportunity.’
Which is best, affiliate marketing or network marketing?
When it comes to affiliate marketing vs. network marketing, affiliate marketing is definitely more likely to make you money, simply because the business model is not designed to make you fail.
It is mathematically impossible for most people to make money in network marketing, and most network marketing companies operate in a very similar way to illegal pyramid schemes.
When it comes to affiliate marketing, although it is still a highly competitive industry, there are an infinite number of things that you can promote and your commission is not trickling up to other salespeople in higher ranks.
From power tools to kitchen appliances, affordable fashion to hair treatments, there will be an audience ready and willing to buy what you are selling.
You can create a website dedicated to the niche of your choice and begin promoting and reviewing products that your readers will find interesting.
As long as you are committed to consistently writing content, learning search engine optimisation (getting your posts ranking highly on Google) and putting in the hours needed to build a profitable site, there is nothing stopping you from making 5 figures a month from affiliate marketing!
Getting Started With Affiliate Marketing
You certainly won’t make money with affiliate marketing overnight.
There is a lot to learn when it comes to selling products online, and whether you decide to go the website route or the social media route, you will still need to put in a lot of work before you start seeing results.
Below are a few recommendations of courses and other tools that may be useful if you want to build a blog and make money with affiliate marketing.
The following links are affiliate links, which means that I may make a small commission if you decide to purchase anything recommended!
Affordable Affiliate Marketing Courses
Affiliate Marketing Diploma – This Centre of Excellence course will teach you all you need to know to get started with affiliate marketing and build your own successful affiliate marketing business. The usual price is £147, but if you use code TRAVELLINGJEZEBEL466 you will get 70% off! (The code uses the name of my travel blog!)
Blogging Business Diploma Course – This is another Centre of Excellence course that will help you turn your blog into a business. This course is usually £127 but you can get 70% off using the code TRAVELLINGJEZEBEL466.
Travel Blog Prosperity – This is a fantastic selection of blogging courses that you pay for monthly access to, with new material being added all the time. You can get your first month for only $9 (usual price $59.29) when you use code JEZEBEL.
Social Media Marketing Diploma Course – Want to create a successful affiliate marketing business using only the power of social media? Turn your socials into money with this course. It is usually priced at £127 but you can get 70% off with code TRAVELLINGJEZEBEL466.
Blogging Tools You May Find Useful
GoDaddy – I used GoDaddy to buy all of my domain names (website names). I’ve been with them for years and I love their low cost and user-friendly interface. You can get 30% off GoDaddy with this link.
Ezoic – An ad network that will enable you to make money based on how many people visit your website (even if they don’t click on your affiliate links!). There is no minimum traffic requirement to sign up, so you can start running ads and making money on your website from the very beginning. Ezoic is free to join.
Siteground – This is a great web hosting company. They offer so much to their publishers, including a free business email address, site speed tools, caching tools and 24/7 customer support.
Hostinger – This is another web hosting company. Hostinger is more affordable than Siteground, but still offers excellent features and is perfect for new bloggers.
Bluehost – This is another popular hosting company favoured by many new bloggers.
Mailchimp – Having a mailing list is invaluable as it is a direct way to contact your biggest fans and let them know about your favourite products! Mailchimp is free up to your first 2000 subscribers.
17th Avenue – 17th Avenue is where the website theme for Not Your Boss Babe is from.
Keysearch – if you want to be a successful blogger, you need to learn SEO, and if you’re learning SEO, you need a paid keyword research tool. Keysearch is by far the cheapest on the market for the quality service it provides. Get 20% off your Keysearch subscription with code KSDISC.
Affiliate Marketing vs. Network Marketing | Final Thoughts
With 99.6% of people in network marketing companies losing money, Not Your Boss Babe does not recommend network marketing.
Affiliate marketing, on the other hand, holds a lot of potential, and if you want to have your own successful online business, affiliate marketing is a game changer.
If you have any questions about anything affiliate or network marketing related, please leave them in the comments section below!
Until next time,
XOXO
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Great post, Thanks for sharing.