My experience of Network Marketing or Multi Level Marketing as it is also known started back at the beginning of this century before the internet really got going, OK yes I am getting on a bit, I would rather call it experience!
I must admit the lure of earning big money by only doing the work once was a great temptation and one I could not resist. Over the years I have been involved with a few different companies and in my experience have only ever known that the people making the most money has tended to be those that have either joined the company at its launch or while it was still small. The other attribute you will need is the ability to sell confidently.
Over the last few years I was introduced to Affiliate Marketing which in my opinion is a far easier way to make money. More and more people are starting to become affiliates and build full time incomes working from home.
So that you can make your own mind up in this article I will explain what is Affiliate Marketing and MLM (Multi Level Marketing, I will also take you through the pros and cons of each.
If you are ready let’s get started.
What is Affiliate Marketing
Affiliate Marketing is the process of recommending products and services that are owned by someone else. These could be physical or digital products and cover a wide range of niches from clothing to insurance, e books to coaching programs.
The way this works is that you join, for free, the affiliate program of the company that you wish to recommend. This is normally a simple process of just creating an account with your name and email. You are then given access to your own individual account where you will discover promotional materials such as videos, emails, banners plus your all important unique affiliate link.
This link is tracked to you so when people click through and make a purchase then you will earn a commission. This commission is paid to you, normally monthly, directly by the company. The company itself will then deal with all the sending and support for the product.
Commissions can vary depending on the company from a few percent to 50%. Some will give you a set amount every program is different.
Together with blogging, affiliate marketing has seen amazing growth over the last few years, so there’s no time like the present to get started.
What is Network Marketing
Let’s break this down and make it simple to understand… Firstly, you will need to network with friends, family and people you don’t even know. Secondly, you will have to sell the companies products and that’s where the marketing comes in.
The industry is very highly regulated to stop so called Pyramid Schemes being set up as network marketing companies. Although, this only normally gets stopped after a couple of years. By then 1000 s of people would have already invested time and money.
Also known as multi level marketing (mlm for short). If you are looking to join any company please do your research before signing up.
Affiliate Marketing Pros
Free to Start
One of the biggest advantages of affiliate marketing is that all programs are free to join. If any company ask for payment to join their program then walk away and find a different product to recommend. There are millions out there do move on.
No Selling Required
This is the one I love, you don’t have to sell any product or service with AM as what you are offering is normally a solution to a problem that your customers has.
Here’s a couple of examples… You are not happy with your house insurance and want to find another company. I recommend a good solid company that has better deals. You end up with a great deal, I get a commission. Maybe you were looking to build a website for your business and so would need hosting, I could recommend a great hosting company that meets your needs.
Again we both end up happy
Well Known Companies
Affiliate marketing has grown so well because of the big brand names that are now associated with this form of marketing. Brands such as Amazon have given even more credibility to a solid way to earn money.
No Experience Needed
Another great plus is that you can start with no experience and learn as you build your business. A great way to learn is to ask questions and watch what others are doing within the industry. Wealthy Affiliate is a great community based training site that enables you to get free training and access to 1000s of like-minded people who will help you every step of the way. My top recommendation!
No Purchases Necessary
There are no purchases that you need to do. Like I said earlier the majority of the time you are just recommending a solution to the customer. With digital products you can even get access to a copy of the product for free so you give an honest review.
Do The Work Once
If you find some products that have recurring income then these are like gold dust. This means that you recommend it once but get paid every month (or year). Products such as membership sites, software and even pet insurance all can give you recurring income. I recommend a few of these very successfully.
Not Relying On Others
With Affiliate marketing there is only one person responsible for the success of your business and that is YOU! You NEVER have to rely on others.
Network Marketing Pros
Easy to Find Companies
One advantage of Network Marketing is that there are plenty of them around. There are of course some great companies that have stood the test of time such as Amway, but I would always due some research before joining any company.
If you do manage to get people into your company, you will receive a monthly fee, this is normally a percentage from a membership or product purchase. The difficult part is recruiting the people in the first place.
Affiliate Marketing Cons
The only disadvantage that I can think of is the some companies such as Amazon have very low commission rates. This means that you would have to make a fair few recommendations before you could see life changing results. That said it is still possible I know people doing just that.
Network Marketing Cons
Set Up Costs
Starting with any MLM company will involve set up costs, this means you are out-of-pocket from day one. Although there are normally fast start incentives to earn that money back and more, most unfortunately don’t. This is generally achieved by recruiting people into the business.
Building A Team
The principles of Multi Level Marketing is building a team of people, how then build themselves hence this is where the multi level part comes in. If you are a natural sales person you can have some success in recruiting people. The problem then comes when you want them to do the same otherwise everything grinds to a halt.
Most companies hold big training days that you are requested to go to. This are not normally local, sometimes in a different country.
With a lot of these companies you are selling physical products, health juices, skincare lotions and potions that sort of thing. In these cases you have a quota per month that you yourself have to buy. This can drain even more money from your bank account and if you are struggling to recruit people. Then a lot of people quit after just a few months.
Good At Sales
Like I have mentioned previously having a sales background or at least not being afraid of people saying no is a tremendous advantage when it comes to the Network Marketing game. Although you can learn these skills many fail as they are not 100% comfortable with either the selling process or the products they are trying to sell.
A Founder Member or Early Sign Up
From my experience being a founder member, or one that joins the business early on can have huge benefits in building your business. This of course very rarely happens as some MLM business are decades old and have tens of thousands active members.
Relying On Your Team
As I have briefly stated previously that the Multi Level Marketing business model is created around building a team down several levels. This means that you have to recruit people who are going to be actively replicating what you are doing. I know from experience that this is hard to do and things don’t always work out. You can be constantly rebuilding your business as people in your team become dormant or even leave the company all together.
You of course have no control on what others do, so this can be very frustrating and annoying.
Although your have loads of good companies within the Network marketing industry you do also get the companies that launch, run for a couple a years and then get shut down. These do tend to be ones that operate with little or no real products. You can normally spot them as they are promising a quick fix and their main objective is not the products but getting people to sign up.
As you can see from going through the pros and cons of both Affiliate Marketing and Network Marketing, it’s Affiliate Marketing that comes out on top in both cases.
The advantages have affiliate marketing winning by 7 points to 2 … and the disadvantages again figures show a resounding victory towards affiliate marketing with only one real disadvantage whereas network marketing has a less then impressive 7.
I think you can see why I would now always recommend affiliate marketing verses network marketing.
If you would, like to learn more about AM then would recommend a site called Wealthy Affiliate where you can get a free website, hosting, training and support for free on their starter membership. Read more on the features on Wealthy Affiliate right here on this blog.
8 thoughts on “Affiliate Marketing verses Network Marketing – Which One Comes Out On Top?”
This is a great and comprehensive summary of both affiliate marketing and network marketing. I am involved in a multi level marketing company and I do love it! It is a product though that I used for years before deciding to sell it. That said, being a shy, quiet introvert, I struggle with selling it. But I have made some money and it continues to slowly grow. But I have also recently started blogging to do affiliate marketing and I am loving this process also! I can see a lot more potential for myself to earn a decent income than I can with the MLM.
Thanks for your honest insights into both MLM and Affiliate Marketing. It’s great that you are earning from both, having more than one income stream is always a good thing. I wish you continued success.
Thanks, I think I understand better the difference, and I’m interested in doing affiliate marketing, but I still don’t understand how I would make any money, how I would sell products. Can you explain, like how is it that I would get a commission on a product?? What are the skills that I need to succeed??
Hey Phil, Thanks for your questions. Most companies would pay you a pre agreed percentage of the product sale. These can vary between companies. To succeed you must be willing to learn and want to helps others as most people are looking for solutions to a problem they have. For more info on this read How to become an affiliate marketer.
Hey there Martin,
Wow, lots of good information, and a great perspective on the two methods of generating income. I do have experience in both. The MLMs are just as you said, hard to get going. Seems like most people plunk down their initial fee money, buy some products, find out they have to sell to people to their face, the product is overpriced and no one is interested and they get out. Then they’ve lost their initiation fee, they have a product that they probably won’t use and they have a bad taste in their mouth over an MLM. Affiliate Marketing, on the other hand, can give you residual income because once you get the website up and running, it’ll always be there, and eventually thousands of people will see it without you doing anything but maintaining it. I vote for Affiliate Marketing! This “Wealthy Affiliate” platform you were speaking of, how much do they charge for web hosting and training?
Thanks for the great comparison,
Thanks for comments Steve, sounds like you had the same experience I had with MLM, either that or the company folded. Regarding Wealthy Affiliate you can start by having a free starter membership that allows you to start building your own website and get training. The Premium which includes, hosting, training, support and up to 50 websites is just $49 a month this can be dramatically reduced by taking the yearly payment option. For a more in depth overview of what you get check out my full Wealthy Affiliate review
This is a good comparison between affiliate marketing and Multi level marketing. I know a lot of people that have been burned by MLM “opportunities”, including myself when I was younger. I am currently using Wealthy Affiliate to pursue my online income and am just now starting to see the sweetness of success. Following their true step by step lessons, I am now seeing almost daily sales from one of my websites. I am not quitting my day job yet, but I think in a year, perhaps I will be looking to do just that!
Thanks for dropping by Dave and taking the time to share this. That’s amazing you are making almost daily sales I am sure this will only grow to enable you to quit your day job. I wish you continued growth in your business.