affiliate marketing vs network marketing

Making money online is a dream that many people have. In this blog post, we will compare Affiliate Marketing Vs Network Marketing so that you can decide which business model is right for you in 2022.

Both of these businesses have their pros and cons, but ultimately it comes down to what you are comfortable with and what you think has the most potential for success.

Affiliate Marketing is a great way to start making money online, but Network Marketing can be even more lucrative if done correctly. We hope that this information helps you make the best decision for your future.

If you purchase through our partner links, we get paid for the referral at no additional cost to you! For more information, visit my disclosure page.

Now for reference, I’ve tried both and still do affiliate marketing today which reflects through this blog and youtube channel.

I’ve also reviewed different MLM companies and network marketing companies which goes over their sales model and key differences. 

What Is Affiliate Marketing?

Affiliate marketing is a form of passive income that allows you to promote someone else’s product or service and earn a commission when someone buys from your link.  

When you become an affiliate marketer, you join an affiliate program and receive a unique affiliate link. 

You can then share this link with your audience, and whenever someone clicks on it and makes a purchase, you will earn a sale. 

By creating digestible content online, you can attract an audience and drive traffic to your affiliate links which is exactly what I have done for myself.

I honestly think being an affiliate is a great way to earn passive income, and it’s also relatively easy to get started. 

There are many affiliate programs available, and new affiliates can often start earning commission without any upfront investment. 

Start-Up Costs

Most affiliate businesses do not require any start-up costs. You can get started with just a computer and an internet connection (Sounds like one of those YouTube Ads).

You will need to create content, but you can do this for free or with little to no money using a platform like WordPress and YouTube.

You will also need to sign up for an affiliate program, but many of these are free to join. So you won’t lose money, but you might just waste your time. 

Just go to the bottom footer of a website you will typically see a “Affiliate Program” link.

To summarize your investment, these are the only costs:

  • Your time
  • A Domain name: 10/yr (optional)
  • Web hosting & A WordPress theme: $60/yr (Free & Paid)
  • Youtube Channel: Free
  • Email Marketing Service: $19/mo (optional)

Total Yearly Costs = $70-$100 USD.

 This is if you choose to get a domain name and web hosting, which I recommend. You can start for free with just a YouTube channel and social media platforms.

Once you start bringing in more revenue, I’d recommend to start investing in better tools for your affiliate marketing business.

Earning Potential

The earning potential in affiliate marketing is really up to you. 

You can make a few hundred dollars per month or thousands of dollars per day, it all depends on the effort you put in and the size of your audience.

You’ll need to view the commission rates and terms of each affiliate program you join to accurately gauge your earning potential.

But in general, the larger your audience, the more sales you will make, and the more money you will earn.

You can always look up income reports for those that like to share it online such as Adam Enfroy’s blog post.

It’s also important to note that some affiliate programs offer recurring commissions, so you can continue to earn money from the same customer even after they have made their initial purchase.

This is a great way to earn passive income, and it’s one of the main reasons I recommend affiliate marketing to people who are looking to make money online.

What Is Network Marketing?

Network marketing, also known as multi-level marketing (MLM), is a business model in which you promote a company’s products or services and earn a commission on every sale you make.

But unlike affiliate marketing, in network marketing, you also earn a commission on the sales of the people you recruit into the business (your downline).

Image Source: The BalanceSMB

This is how most people make money in network marketing, by building a team of other salespeople who then go out and promote the products or services themselves. 

Network marketing is often compared to affiliate marketing, but there are some key differences between the two businesses.

This is why most people run the other way when they hear you’ve joined a network marketing business model.

Because most network marketers are told to recruit their family members and friends into the business, and then they wonder why nobody wants to join them.

If you’ve ever been approached by someone in a network marketing business and felt pressured to sign up, then you know what I’m talking about. 

Start-Up Costs

Most MLM participants need to buy products from the company they’re promoting (which can be expensive) and still need to pay a monthly fee just to participate in the direct sales business.

So your start-up costs can be quite high, and there’s no guarantee you will make any money at all. In fact, the majority of people who join MLM businesses never make any money.

To summarize your investment, these are the only costs:

  • The cost of the products you need to buy from the company: $100-$500 USD
  • The monthly fee to participate in the business: is $20-$100 USD
  • Online Platforms: $29-$49

Total Yearly Costs = $1440-$12,000 USD. 

This is if you choose to join a person-to-person sales business that requires you to stay on a monthly subscription.

Earning Potential

The earning potential in network marketing can secure decent income if you know how to recruit people and build a large team.

Side note: 

Be careful of pyramid schemes that promise you’ll make money from the people you recruit, without having to sell any products yourself.

These are illegal and will only leave you in debt.

In a legitimate network marketing business, you can earn a commission on every product sale made by your team, as well as your own effort in driving sales.

MLM programs recommend contacting everyone and anyone you know to try and sell them products or recruit them into the business.

You’re also told that you need to be very active on social media, constantly posting about the products or services you’re promoting which is your main lead generation source.

So this will also mean you need a lot more personal interaction than affiliate marketers need.

I’ve made a few sales myself as a network marketer which you can see below.

In short, network marketing companies can be a great way to earn residual income, but only if you’re willing to sell products, recruit people, and build your social network.

Differences Between Affiliate And Network Marketing

Most people who try to start an online business are just learning about internet marketing.

I have been in both affiliate marketing and network marketing, and I can tell you that they are two very different business models. Here’s a quick overview and the major key difference between these two:

In affiliate marketing, you earn a commission on every product sale that you drive. There is no need to recruit people into the business or sell products yourself.  You are able to freely join whatever affiliate program you want.

In network marketing, you earn a commission on every product sale that you drive, as well as a commission on the sales of the people you recruit into the business (your network recruitment).

Network marketing is often compared to affiliate marketing, but there are some key differences between the two businesses. 

The Freedom To Promote Multiple Products As An Affiliate

The beauty of affiliate marketing is that you can be an affiliate for multiple products at the same time.

You’re not limited to just promoting one product from one company.

In fact, most successful affiliate marketers promote multiple products from multiple companies.

This gives you a lot of freedom in terms of the products you can promote and allows you to pivot into different niches.

When you join a multi-level marketing company, they typically have very strict policies about what products you can promote and how you can promote them.

As a network marketer, you need to use the assets the company provides you through your online account.

The Income Potential Is Higher With Affiliate Marketing

The income potential is higher with affiliate marketing and you don’t feel as shady because you’re not constantly pestering your friends and family to buy things from you.

P.S Blogging and affiliate marketing is currently my favorite combo.

It’s important to note that affiliate marketing is a business, and like any business, it takes time to grow.

Most affiliate programs will pay out 20%-30% and at times, if you bring them enough product sales, you can increase your commission rate.

Most Affiliate Marketing Programs are Totally Free to Join

As I said earlier, MLM companies have huge costs, to begin with. The parent company generally charges significant fees for launching, which include everything you want to sell, and it would be very difficult to offset these expenses.

They often charge membership fees on an ongoing basis, and you’ll probably need a certain amount of revenue to see an initial return.

Affiliate programs, on the other hand, allow you to join for free and access thousands of distinct niches from affiliate networks like ShareASale, Cj Affiliates and Clickbank.

To sum it up, if you’re looking for a side hustle to start in 2022, I would recommend affiliate marketing over network marketing. It’s less risky.

You Don’t Have Close The Sale With Affiliate Marketing

New affiliate marketers have complete control over how they want to run their own business.

Unfortunately with a person-to-person sales business like network marketing, you have to close the sale yourself or find someone who will.

The process of closing a sale can be very challenging and takes a lot of skill, which is why most people fail in direct sales.

If you’re not a “people person” and can’t provide direct communications consistently, then network marketing may not be for you.

Now when you join an affiliate marketing program, individual affiliates do not have to worry about closing the sale.

They just need to generate traffic and let the merchant or affiliate network take care of the rest.

In short, as an affiliate marketer, your priority is to start promoting products that solve your audiences’ problems.

FAQ

Is Affiliate Marketing A Pyramid Scheme?

No, Affiliate marketing is not a pyramid scheme.

A pyramid scheme is an illegal business model where participants only make money by recruiting more members.

In affiliate marketing, you earn revenue through selling products and services, not through recruiting people or other member’s profits.

Is Network Marketing And MLM The Same?

Network marketing and MLM are often used interchangeably, but they are actually two different things. Network marketing is a sell-based system where you earn commissions for every product you sell.

MLM, on the other hand, is a payment system where you earn commissions based on the number of people you recruit into the company.

So, what’s the difference? Well, network marketing is usually much easier to get into and doesn’t require a large upfront investment.

You also don’t need to recruit people in order to make money – you can simply sell products and earn commissions. MLM, on the other hand, is extremely difficult to get into and usually requires a large upfront investment.

In addition, you need to recruit people in order to make money, meaning that it can be tough to turn a profit unless you’re very good at recruiting.

Affiliate Marketing Vs Network marketing: Final Pick

Most people mistake affiliate marketing for network marketing or MLM, thinking that they’re the same thing.

And that’s probably why you are reading this blog post, to get a clear understanding of the difference between affiliate marketing and network marketing.

If you want to sell multiple products from your own website or digital marketing strategies, then the affiliate business model is for you.

Join affiliate programs and start an affiliate website like mine that can possibly bring you residual income for years to come.

And don’t forget, startup costs are insanely low compared to an MLM program or network marketing company. So, what do you think is better? Affiliate Marketing Vs. Network Marketing?

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Author J Lipsky

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