Affiliate Marketing vs Network Marketing |Which Way to Go?
Chances are, you might have heard of both or one or the other. Welcome to my review of Affiliate Marketing vs Network Marketing
I have been involved in both network and affiliate marketing so I will try and give you a very objective review on how these two forms of marketing operate.
As long as products exist there will always be marketers. The fruit vendor at the local market shouting at the top of his voice in an attempt to draw you to buy their products is a marketer. So is the lovely lady with a sweet voice at the other end of the line trying to sell you an insurance premium.
In all likelihood, you might have been approached by someone, probably a friend or relative with an opportunity to sell products or services for a small profit.
Marketing has a lot to do with not just selling products but helping people decide on whether to buy or not. Affiliate Marketing and Network Marketing is the one place where the buzz really flares up.
Which is better and why?
What is Network Marketing?
Network marketing sometimes referred to as Multilevel marketing (MLM) is a business model that allows members often referred to as IBO’s (Independent Business Owners), consultants, affiliates, distributors, etc.. to earn commissions based on their efforts.
Typically, commissions are paid from the sale of products and from recruiting others to join the company. Those who join your team are referred to as your downlines while the person whose team you join is your upline.
Even though it’s not clear when network marketing started, it’s generally believed the origins can be traced back to a California-based multi Vitamin company called Nutralite in the early 1940s.
How Does it Work?
To simplify things, think of your local supermarket where you buy all your groceries. You walk in, pick the products, go to the cashier, pay and go home.
Your supermarket will need to spend money on paying for premises, transport, storage, and various other overheads. They will also need to advertise so that the community knows of their presence.
So they decide, why not make a deal with the customer?
Whenever you buy products from us we will pay you a small commission.
Tell your friends about us and if they become customers you get a commission for the sales they generate.
If the friends of your friends join and become customers as well, you still earn commissions for the sales they too generate. And the list goes on.
Early network marketing companies coined the word prosumer meaning product to the consumer. Technically you become part-owner of the organization. The entire arrangement looks and sounds nice and dandy, but there is more than meets the eye.
Is Network Marketing a Scam?
If there is one thing that is difficult to escape is the controversy and misconceptions that surround the network marketing industry. The reasons are pretty genuine.
Nobody likes being sold stuff. Especially when there is a hidden agenda behind the sale.
The trouble with network marketing is that nothing much has changed in terms of the business structure. Many consultants will approach you without telling you what you are getting into. They will invite you for a party or meeting and then before you know it, you are presented with the opportunity of a lifetime.
Next thing you know, you will be doing the same thing that got you on the bandwagon in the first place and the cycle goes on.
Do people succeed in Network Marketing
As a distributor with Amway, I met a lot of people who had achieved massive success with the business.
The one quality that I saw with these guys is man, they had the gift of the gab! These were the kind of guys that would sell a fridge to an Eskimo. Some people just have it in them, some don’t. I was one of those guys from the don’t have it department.
I like to keep my life quite and private. I just didn’t have what it takes to approach strangers to join my opportunity. That is the one thing that your upline won’t tell you.
Companies like Amway have remained consistent for years. Many come and go. Your success remains tagged to the company whose products or services you are distributing and your ability to recruit.
The multi-billion-dollar question is, do you have what it takes to succeed?
Having been there and done that, I can tell you for a fact that the majority of people do not succeed. By majority, we are talking close to 99%. Check out the facts from Wikipedia
Most people who join network marketing companies drop out when they realize just how difficult it is to run the business. Probably 1 in 10 will join and there is no guarantee that they will stay or be active in the business. That is partly why it’s hard to saturate a business with such a high dropout rate.
It’s really hard to make a decent living with network marketing. The odds are heavily against you.
People are generally suspicious of network marketing because of Ponzi and illegal pyramid schemes. The network marketing structure is easy to duplicate and many people take advantage of that.
There are heaps of companies that sell fictitious or downright useless products or services that offer no real value and in the process have ended up scheming millions of dollars from its members only for the top members to disappear when the structure finally crumbles. Ponzi schemes always fizzle out and unfortunately not without casualties.
Most network marketing companies are legal entities and operate within the law. As long as you have a product, there is no law against reselling for a profit.
I will leave with Dave Ramsey’s take on it.
The flow with network marketing
What are your friends worth: When you join most network marketing companies, you will be told to list down the names of everyone you know, including people you haven’t kept in touch for years. Well, you never know who is looking for an opportunity, do you?
This is called your warm market. I call it the easiest way to isolate yourself from friends and family. Family might go easy on you, but good friends are hard to come by. Why turn them into business transactions?
Inflated prices: There is a narrative that is pitched that products sold by network marketing companies are superior in quality and that justifies the high prices you pay. I use multivitamins daily. A 2 month supply costs me $22. It works for me. I don’t get sick as often as I used to. I don’t see the difference in quality.
When I was with Amway, a 1 month’s supply of multivitamin tablets would cost me $40. I was told I could resell the same product and make a 20% profit. Who is going to buy the same product for an inflated price? You will be surprised, but people do. I know I have.
It’s an easy business to get into: Compared to starting a McDonald’s franchise which can cost you hundreds of thousands of dollars if not millions, you have yourself a pretty good deal here. All you need to do is buy a starter pack and you are in business. What they don’t tell you is that you have to keep buying and recruiting to be eligible for commissions.
People end often end up getting stuck with tons of products that they can’t dispose of. No wonder you can find the same products being sold on places like Amazon and eBay. A lot of these folks are just trying to recover back the money they invested.
You are running a business: When you are running your own business, you call the shots. You are in total control of investment, management, pricing…pretty much every aspect of the business. At the end of the day, you decide which direction your business will take.
Selling products is what it is. You are just a salesman with a fancy title. The guys running the business are the people whose products or services you are selling. If they go out of business, you go out of business. That often happens.
What is Affiliate Marketing?
Affiliate marketing is the process where one is paid a commission for promoting another person’s or company’s products. There are four main players in the industry.
- The merchant –retailers or owners of the products
- The network – the platform (websites) where affiliates and Merchants handle the transactions.
- The affiliate or the publisher – produce the content that draws the customer to buy.
- The customer – The end buyer.
The affiliate normally uses the internet and other online tools to create websites that will draw customers to buy the products that they are promoting. This includes the e-product display, search engine optimization (SEO), email marketing, content publishing (blogging) and even product reviews.
How Does it Work?
While network marketing is a numbers game, affiliate marketing is a big numbers game but in the mathematical sense. Affiliate marketers can leverage the billions of people connected to the internet to drive their campaigns and make money.
In affiliate marketing, you build a website that promotes products that are relevant to your interests. A website forms the launching pad for all your online campaigns.
Have you ever bought anything online either from eBay, Amazon or some other online retail store? The first thing most people do is a Google search to learn all there is to know about the product that they are after? 81% of online shoppers research their products online before making a purchasing decision.
Businesses understand this and so they are quite happy to offer affiliate programs to promote their products. An “affiliate program” or “associate program in the case of Amazon” is a relationship in which a merchant pays you (the “affiliate”) for links from your site to their site.
Check this out.
I did a review of a product called the BullyEyes cell phone camera lens attachment. It’s a simple lens that you attach to your smartphone camera lens which enables you to take shots that are beyond your smartphone lens ability.
I bought the lens because I needed a product that would help me take great pictures for my design work without spending a fortune on an expensive camera. Most smartphone cameras are just as good as a digital camera but there are still limitations. This tiny lens helps you capture wide-angle shots and can magnify tiny objects up to 10 times
I get paid a commission by the Bullyeyes affiliate program when people visit my website and buy the smartphone camera lens attachment and other related accessories. It’s as simple as that.
So how do I go about it?
The diagram below shows you the 4-step process that is required for you to get your online venture up and rolling.
We all come from different backgrounds in life. Some people love painting, others are into motor mechanics, others love music, etc. An interest should be something you are passionate about.
For me, I love photoshop, watercolor painting, smartphone photography, etc.
In marketing, it’s called a niche. That word has many meanings the most common being a comfortable or suitable position in life or employment. With online marketing, it takes a slightly different meaning.
Let’s go with this school of thought.
Jack is an artist.
Jack is an artist who only works with acrylics
Jack is an artist who only works with acrylics and only paints portraits.
Who is Jack?
Jack is a portrait artist who works with acrylics.
Essentially, Jack is the niche.
At the very heart of it, a niche is simply a very targeted group of people with a particular interest.
I love photography, but this is a wide and broad subject. There are thousands or perhaps hundreds of thousands of websites with photography related information. I would need to narrow down to a specific group of people who are interested in a particular form of photography. Take your pick.
- Landscape Photography
- Wildlife Photography
- Aerial photography
- Sports / Action Photography
- Portrait Photography
- Architectural Photography
- Wedding /Event Photography
- Fashion Photograph
- Macro photography
Whichever direction you go when picking up your niche, understand that there are over 550,000,000 products and services that you can choose, promote and earn revenue. Affiliate marketing has unlimited growth potential.
Choosing a niche is something that requires a bit of time to think over. You want to go with a niche that you love because you want to have fun growing your business. It’s shouldn’t feel like a job.
The good news, there is an online education platform that you that I would highly recommend. Here you learn all there is to know about affiliate marketing. They are called Wealthy Affiliate.and they have a massive resource of tools, training and round the clock support.
It’s FREE to get started and you also get access to 10 FREE lessons.
There is a premium membership, but I would highly encourage you to take full advantage of the free membership and ONLY upgrade if you feel it’s worth it.
If you have any comments or questions, please leave them below. I would love to hear from you
Once your site is up and running, and is generating traffic, meaning you have visitors coming to your site, the next step is to join affiliate programs that sell coffee machines. Joining affiliate programs is free. Their products will be displayed on your website and if somebody buys their product through your website you earn a commission from the sale.
Do People Succeed in Affiliate Marketing?
Yes, they do. Again, Bigly!
It does, however, take an immense amount of work before you can start making money. Some people have multiple websites that have taken years to build for them to start seeing results.
It also takes time and so you will not see results in a few weeks or even months. Not that it’s impossible but highly unlikely.
A very important aspect of affiliate marketing is content. As an affiliate marketer, there will be a lot of writing to do. People are always looking for information on products and services and if you can provide it then you can succeed.
Another thing you have to consider is the training. You have to learn how to build websites and all the technicalities that come with that.
The internet is huge and diverse and so it’s constantly evolving hence the need to keep up to speed with new technologies. That’s why it’s important to plug yourself into a training program that can assist you in your journey as an affiliate marketer.
Check out this video by Kyle to learn more.
Both systems of marketing have advantages and disadvantages to them and so whichever you choose depends on personal preference. For example, if you are the sort of person who gets easily along with everyone network marketing could well work for you.
However, as I mentioned, the majority of people are not.
I think despite all the hard work and effort that goes into affiliate marketing, it still is a solid and less stressful way to build passive income and is my preferred model. Your chances of success are way bigger than network marketing.
Many thanks for reading my review. If you have a question or a comment, please leave it below. I would love to hear from you.
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