Welcome To My Post “Network Marketing vs Affiliate Marketing – Pros And Cons.“
Network Marketing and Affiliate Marketing are popular ways to make money.
You are here because you want to find out the difference between Network Marketing and Affiliate Marketing, their pros & cons and also want to find out which is the best one.
Not to worry! I am here to help you.
By the end of this post, you’ll have all the information that you’ll need to know about Network Marketing vs Affiliate Marketing.
I have involved in a few MLM’s and currently Full-Time Affiliate Marketer. So I am writing this post based on my experience.
I have tried a few MLM’s conducted meetings, taken people to the meetings, sold products to my friends and families.
I am doing Affiliate Marketing since November 2016 and from December 2017, I am a Full-Time Affiliate Marketer working from home.
Since I have tried both the business models I believe I can provide you with helpful insights on Network Marketing and Affiliate Marketing.
What Is Network Marketing?
Multi-level marketing and Network Marketing are the same.
Wikipedia – Multi-level marketing (MLM), also called pyramid selling, network marketing, and referral marketing, is a marketing strategy for the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company’s products/services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system.
Network Marketing is all about buying a product from the MLM company at a wholesale price and selling it at retail for profit.
Also, you recruit other people to join your network so that you earn more money from your downlines.
Normally, MLM companies don’t spend money on advertising they focus on direct selling using their independent distributor.
To make it simple, you are the salesperson and HR for the Network Marketing company.
In a nutshell, Network Marketing involves selling and recruiting. The more people in your team you earn more money.
What Is The Difference Between Network Marketing And Pyramid Scheme?
There is some difference between Network Marketing and Pyramid Scheme.
- Network Marketing is a legit business model and Pyramid Scheme is an illegal business.
- Network Marketing involves product selling & recruiting. However, Pyramid Scheme mainly or totally focused on recruiting.
- MLM products are similar in price or slightly expensive to traditional retail outlets. Pyramid products are quite expensive compared to retail outlets.
For more information, you can watch the below short video…
Pros Of Network Marketing
Below are the Pros of Network Marketing…
- Legit business model.
- If you are good at networking, recruiting people and building a big team you can earn good money with MLM.
- Passive Residual Income.
- Work from anywhere
- Easy to start.
Cons Of Network Marketing
Below are some cons of Network Marketing…
- Selling & Recruiting Required – If you are not good at selling or don’t like selling MLM is not for you.
- Might lose friends and relationships – Normally, MLM’s teach to promote their products to your family and friends. When we contact them they feel uncomfortable and some will avoid us.
- You need to purchase the product and some companies need auto shipping (You need to buy every month and maintain certain points to qualify for commissions).
- Most of the MLM products are quite expensive
- Uplines and meetings – In some cases, there will be some pressure from the uplines on recruiting more members. In some cases, they will ask to bring people to the product introduction meeting.
- In most MLM companies, people at the top make the most money.
- Without a big team or downlines, it’s not possible to make a reasonable amount.
- The Success rate is low (more on this later).
- You Are Not In Control Of Your Business.
No, I am not saying MLM’s are bad. There are genuine MLM companies and some of my friends are doing network marketing and earning a full-time living as well. To be honest, many of my friends and relatives failed.
What Is Affiliate Marketing?
Wikipedia – Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts.
To make it simple…
Affiliate marketing is a business model in which you promote the products you like and earn a commission when sales are made using your special link.
You are like a middleman but instead of reaching out to people one by one and doing hardcore selling face to face, you can build your own website and make these people find you instead of you chasing the people.
As you came to my site!
Pros Of Affiliate Marketing
Below are the pros of Affiliate Marketing…
- Low Investment
- Work anywhere at anytime
- Turn Your Passion Into Profits – Love What You Do
- Huge Earning Potential
- You Can Work With Multiple Companies
- No Direct Selling Involved
- No Inventory Is Required
- You Are In Control Of Your Business When You Do It Via Website.
- Multiple Source Of Income When You Do It Via Website.
- No Customer Service And Billing Involved On Your Side.
Cons Of Affiliate Marketing
Below are the cons of Affiliate Marketing…
- Takes Time To See Results
- Involves Continuous Learning
- Some Vendors or Merchants Might Change Their Affiliate Commission At Any Time
Similarities Of Network Marketing And Affiliate Marketing
Below are the similarities of Network Marketing and Affiliate Marketing…
- Legit – Bothe are legit business models
- Part-Time – Both can be done Part-Time by working on your day job.
- High Earning Potential – Network Marketing and Affiliate Marketing both have high earning potential.
- Start Immediately – You can start Network Marketing and Affiliate Marketing immediately with a few simple tasks and investments.
Who Is Network Marketing For?
People who are good at networking, socializing and having a big network. If you are comfortable talking with more people and ready to sell your product comfortably MLM is for you.
Who Is Affiliate Marketing For?
If you are not comfortable in direct selling and if you are ready to build a website based on your passion and interested to help people via your recommendations Affiliate Marketing is for you.
Which Is The Best? Network Marketing Or Affiliate Marketing?
I believe you got some helpful insights. I personally believe compared to Network Marketing, Affiliate Marketing is the best for the below reasons…
Investment – There are cheaper options with MLM but many MLM products are quite expensive. However, Affiliate Marketing requires less than $400 per year including all the tools, training, support and guidance.
Recruiting – Network Marketing is fully focused on selling products and recruiting. However, with Affiliate Marketing no face-to-face selling required or you don’t need to build your downlines. All you are going to do is recommend the products on your website.
Might Lose Friends And Relationships – Since you approach your friends and family members to sell your products they might stay away from you thinking you might pitch for the product. It brings an uncomfortable situation when they say NO to your products.
However, some companies started providing tools and advice on promoting MLM products online but still many advice to start with your friends and family members.
Control Over Your Business – With MLM you are not in control of your business. By having a website and doing Affiliate Marketing you are in control of your business.
In case if the Affiliate Program you are promoting changes it’s commission structure you can easily switch to the other options.
Pitching The Product To The People Without Need – Often with MLM people will try to sell their products to everyone even if they are not in need of the product also they will insist to buy their products or become a member.
With Affiliate Marketing via the website, you are just addressing the problem and recommending the products. Customers are not pressurized and there is no hardcore selling involved.
When Things Goes Wrong – Because of the increased number of scams and bad business ethics we have seen many companies suddenly disappear.
Trust me, it will be a big headache when the MLM company you work with suddenly shut down its operations. All the downlines and direct referrals will be calling you and things hectic. I faced it so I know the pain and difficulties.
But with Affiliate Marketing if the merchant you promote shutdown the operation it won’t create a big impact we can switch to other options. We are not responsible or don’t need to answer anyone.
Work With Multiple Companies – With MLM business model it is very rare to see people working with multiple MLM companies. Mostly they will be promoting one company.
With Affiliate Marketing you can promote multiple affiliate offers. So you are not putting all your eggs in one basket with Affiliate Marketing.
Need To Purchase The Products – With most of the MLM companies you need to purchase the product but with Affiliate Marketing you don’t need to purchase the product you promote.
However, thorough research is a must before promoting a product.
Confusing Compensation Plan – Many of MLM’s compensation plans will be very confusing. Different levels and ways of earnings make it complicated but with Affiliate Marketing you earn a certain percentage that’s it very straight forward.
With many MLM’s they will be having PDFs and videos to explain their compensation plan which tells you the story.
Increased Number Of Scams – Because of the increased number of MLM scams when we approach people with a product and with an MLM offer they are afraid and it makes the selling of MLM products very difficult.
Offers A Lot Of Opportunities – Affiliate Marketing done via website can be monetized with different options and products. With MLM you are restricted with few options with one company (For Example placing ads on your website).
You Learn Skills To Run Your Business On Your Own – Most MLM’s don’t teach you deeply about online marketing and how to run a business online.
With Affiliate marketing, you learn the skills to build a website and how to drive free traffic to your site which is going to help you in the long run.
However, when an MLM fails you lose your business and often your team.
May I ask…
When an MLM business you promote fails, how many people in your downline are ready to work with you in the next MLM project?
Success Rate – All across the entire MLM industry, more than 95% of the distributors fail on their respective companies.
You can read – The Case against MLM Which can be found on the FTC site HERE.
I am not saying Affiliate Marketing success rate is awesome, often the affiliate marketing failure is because of the individual results.
I personally believe Affiliate Marketing is the best compared to Network marketing. However, it depends on individual preference.
Whatever you choose Network Marketing or Affiliate Marketing I wish you all the very best.
I would like to advise you to focus and build your own business and be your own boss. That’s the best way to spend more time with your loved ones and live the life you want to live.
Thanks for reading my post!
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