Network Marketing vs Affiliate Marketing Pros and Cons

Network Marketing vs Affiliate Marketing Pros and Cons

In this post I will investigate what is involved in getting started in each of these popular home businesses models, what the work is on a day to day basis, and what the long-term prospects are. By the end, you will the clear on what is the best for you. This site includes affiliate links – if you buy through my link I may get paid a commission but the price remains the same for you. Thankyou for your support.

Network Marketing

What is it?

Network Marketing (also known as MLM – Multi Level Marketing) is simply a system of distributing products. It differs from the standard business model where a Manufacturer has its own stores (or outlets in other stores), employing staff, and the hefty cost of marketing their products through magazines, television, radio and social media.

In contrast, Network Marketing consists of an ‘army’ of distributors who retail the product directly to the customer, consequently saving money for the business.

Network Marketing vs Affiliate Marketing Pros and Cons
An ideal Network Marketing structure.

What do you do as a distributor?

Distributors sell the products, either through word of mouth, online, through Facebook parties and through catalogs. Some distributors even join just so that they can get the discount on the products. To increase your income, there is the opportunity to sponsor other people into the business who then make up your team.

How do you make the big money?

In his classic book, The 45-Second Presentation by Don Failla, Don shows his recommended way of building a team which is for you to sponsor 5 serious people and teach them all to do the same until you are ‘5 deep’ which, believe it or not would give you a team total of 780! If they all just had 10 customers, you would make a significant income as you receive a percentage of sales in your ‘downline’. I can tell you from experience that this is anything but easy!

Alternatively, your upline (person who sponsored you or team leader) may prefer that you build ‘wide’, i.e. sponsor 10 people on your front line in the hope of finding at least one person that gets started and also wants to build a team.

Network Marketing vs Affiliate Marketing Pros and Cons
Don Failla’s ‘napkin presentation’ from The 45-Second Presentation

How to pick a good network

  1.  Make sure that there is a desirable, ideally consumable product that you will be happy to sell and can make decent commission on – some people will join just to do the retail so this is very important. Consumable products are great because you will have repeat customers.
  2.  If the retail opportunity is unclear in any way, do not get involved. Believe it or not, pyramid schemes do still exist – this is where people pay to join and get paid to sign others up but there is no actual product. In my experience, the vast majority of Network Marketing opportunities are genuine.
  3.  Make sure that you are joining a successful team – this could really affect your success. It doesn’t matter if the person you join with is new, but before you sign up, ask to get on a call with one of the leaders in the team and ask about the training available. There should be a system that anyone can duplicate so you can get results straight away.
  4.  Ask to talk to someone who has been in the business for about 6 months also. Your sponsor should be delighted to help – if they are not, either find another sponsor or another business.
  5.  Personally, I prefer to be with a company with a successful track record rather than a ‘ground floor’ opportunity. You could put all your time and effort in and the business could tank, but then there have been some successful new starts over the years. It’s your choice.

What are the Pros?

  1. The cost to start is low, putting it within the reach of people who need to earn extra cash.
  2. You get a discount off the products (which hopefully you love!).
  3. There is usually a training program in place and you can get really good mentorship in the right team.
  4.  There is the opportunity to earn a significant income.
  5.  You can do it around your existing job or commitments.
  6. Depending on which countries your program operates in, you may be able to work anywhere with an internet connection.
Network Marketing vs Affiliate Marketing Pros and Cons
Eric Worre interviewing some of the top women in Network Marketing

What are the cons?

  1. The start cost is low, meaning that it is likely you will sponsor people who put in little or no effort because they don’t have much to lose.
  2. Unless you have a good retail plan, you can run out of sales. You can’t keep selling to friends and family and will need to find a way to get new customers.
  3. Unless you are happy just retailing, you are at the mercy of your team with regard to what you will earn. You may be a great leader but everyone is in business for their self and you cannot dictate to them what they have to do. You can put in lots of effort for very little reward.
  4. A massive 97% don’t stay in the business. I lasted for 10 years, and although I loved it for much of that time, got fed up with the constant recruiting and training only for people to leave.

Final thoughts on Network Marketing

The interesting thing is that the opportunity is the same for everyone but only a small number soar to the top.

If Network Marketing is the route for you, in addition to your own team training, it’s good to seek out training from leaders in the field. One of my own favorites is Eric Worre who has lots of free training at his website networkmarketingpro.com. Check him out here. Also Tom ‘Big Al’ Schreiter who is absolutely hilarious. Check out his training about choosing the right words here. I saw him at a live event some years ago and have never laughed so much but he hits the nail on the head with his training.

Affiliate Marketing

What is it?

Affiliate marketing is retailing products on behalf of someone else for a commission. You don’t ever have to see the product. You simply drive traffic to the website link of a particular product that you have signed up to sell, then you receive a commission.

How do Affiliate Marketers sell the products?

The most popular way to sell products is through a Blog. You pick a topic (commonly referred to as a ‘niche’) that you are interested in and write articles and reviews that will help the people who are searching online. You can also promote products on YouTube, Pinterest and Social Media.

How do you make the big money?

There are several answers to this question.

The more mature your website is, the more visitors you will have (assuming you have put in the effort required!) and consequently the more sales you are likely to make. However, there are also tactics that you can use to grow your income that make a lot of sense.

If you pick a product to sell that has recurring commissions, your income will be compounded month on month – everyone should have at least one of these product among their offerings if possible

Next, you can pick a ‘high ticket’ product or two – it may take slightly longer to sell but can make the difference between earning £1.50,  £15, £150 or £1,500 per sale.

Once you have a good amount of traffic visiting your website, you can host adverts on it. For some affiliate marketers this makes up the bulk of their income as it can be significant.

Last but by no mean least, you can create a product or two of your own. Once you have learned the ropes, you could potentially create a course to teach people what you know. You only have the cost of creating the course once but you can sell it for a long time to come.

Network Marketing vs Affiliate Marketing Pros and Cons

How to pick good products

  1.  Pick good quality products that you would buy yourself – your followers trust you and you do not want to have to refund  commission in any case
  2.  Consider digital products which pay up to 80% commission
  3.  Make sure they are a great fit for you niche
  4.  Ideally, find out if it’s something that is already selling well through other affiliates
  5. Carefully consider if the commission makes it a worthwhile product to sell. Amazon’s affiliate program used to be popular (you get the commission for everything someone buys who clicked on your link) but the commissions now are extremely low and you would need to sell massive quantities to make it worthwhile.
    Network Marketing vs Affiliate Marketing Pros and Cons

What are the pros?

  1.  It fits in around your day job or other responsibilities
  2.  You can start for free but will normally need to factor in costs for a website / hosting / training etc.
  3.  Once you are up and running you can scale your business or build another blogs around a different niche.
  4.  When your website is making a decent amount of money, it is possible to sell it. There are people looking for money- making websites to buy for serious money.
  5.  It gives you the freedom to work from anywhere with an internet connection.
  6. You use a hobby or interest you are passionate about as your niche you never feel like you are working.
  7.  There is the potential to earn life-changing money.
  8. You are not relying on anyone else’s performance for your success – it is 100% down to you.

What are the cons?

  1. The biggest downside is that it takes time for a new website to gain authority and it’s unlikely you will see. much money (if any) in your first 6 months so you have to persist in producing regular content while not seeing results.
  2. You need to have a good imagination to keep coming up with new ideas for content and the patience to research what you don’t know about – it’s unlikely you will know everything there is to know about your niche
  3.  Ideally, you need to enjoy writing. Having said that, there are some very successful affiliate marketers who have built their businesses using a YouTube channel and then sharing their content on social media.
  4. Unless you have experience in this area, you will need to seek out training to learn the ins and outs of building a website, keyword research and good article writing and all the other important elements that make for a successful business. Do not blindly attempt this or you will waste your time.

Final thoughts on Affiliate Marketing

If you can take the pain of the first months of hard work with little or nothing to show for it, Affiliate Marketing is a proven, long-term business model that will pay you for years to come if you build it the right way. There is lots of training that you can find online but the most comprehensive one that I have found is Wealthy Affiliate. Check out my review and details of the free starter offer here.

Network Marketing vs Affiliate Marketing Pros and Cons

So which is best? I know some Network Marketing superstars that I am lucky enough to call friends and I will forever be grateful to them for sparking my interest in Personal Development, but for me, the fact that you don’t need to constantly sponsor and train people in Affiliate Marketing makes it a winner and gives me a great sense of freedom and control over my future.

I would love to hear about your own experiences in Network Marketing and Affiliate Marketing in the comments below.

Posted in MLM

10 thoughts on “Network Marketing vs Affiliate Marketing Pros and Cons

  • Great post! You make some great points with picking an affiliate that closely relates to your niche and it takes a while for newer sites to make money based on their DA. Thank you for your insight.

    • Hi Leeann

      Thanks for taking the time to comment. Not everyone can take the pain of getting off to a slow start with a new website, but it’s so rewarding to have something that is all yours that will create income for years to come. I’m glad I made the switch.

      Kind regards,

      Jean

  • I think the hardest thing in such a business – Network Marketing – is to find the right people who are as serious as you and who want to be really successful. Thinking about myself, personally, I realize that I don’t know too many people who are self-motivated to succeed.

    • Hello Sas

      I know what you mean – people who will start something and stick with it are hard to find. I think the secret is to cast your net much wider and not focus on people that you know (which historically has been how you go about sponsoring). A blog would be a much better way to go, then you find people looking for your opportunity in which case they should be much more motivated than someone you have had to persuade!

      Thanks for taking the time to comment.

      Kind regards,

      Jean

  • I’m a big fan of Affiliate marketing but vehemently against MLM/Network marketing for the majority of people. There was a really good podcast about MLM’s called The Dream (you can get it on Spotify and apple podcasts) some really interesting info and insights!

    • Hi Charlotte

      Your response to MLM is quite common!

      I am quite defensive of it as I did it for 10 years and have many good friends in the business – everyone has the same opportunity but not everyone can find their inner leader and if you don’t have a really good retail offer you are unlikely to make any money. I started watching The Dream but it was so one-sided I couldn’t watch it.

      I was very excited to discover affiliate marketing because I am not relying on anyone else’s performance. Whether I succeed or fail, it’s down to me!

      Thanks a lot for taking the time to comment.

      Kind regards,

      Jean

  • I found this really useful as I have been writing my blog for a little over a year in addition to working and am almost at the point where I can start to benefit from affiliate marketing- fingers crossed!

    • Hi Melanie

      Really glad it helped! There’s no reason you can get benefit it you follow the process. Thanks for taking the time to comment.

      Best,

      Jean

  • I have some affiliate links with a few brands. I don;t utilise it enough though and haven’t really made anything from it which is my own fault.

    • Hi Sarah

      I’m sure you are not alone in that! If you focus on reviews or comparisons and select good, low-compeition keywords, you should find people looking for the products you are promoting. I know when I am thinking about buying something the first thing I do is check out the reviews.

      Thanks for commenting,

      Best,

      Jean

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