You have probably been pitched by someone in a network marketing company at some point.
Health shakes, skin creams, eco-friendly home products, you name it and there is probably a network marketing company behind it.
Maybe you have briefly heard of affiliate marketing or dabbled in it before.
My goal is to compare the two industries (network marketing vs affiliate marketing) based on my own experience.
There are pros and cons to both. In the end, I let you know which I prefer (although it may be obvious already if you’ve read some of the other articles here.)
What is Network Marketing?
Network marketing is direct sales. Meaning, a network marketing company offers products or services in which sales are made by the people (independent distributors) of the company.
The industry is also referred to as MLM (multilevel marketing) or relationship marketing. When you become an independent distributor with a network marketing company, you promote and sell the company’s products and/or services as well as build a team of other distributors under your own network.
The more team members you have under you, the greater your income potential. This is why a lot of the focus is on building your team once you become a distributor.
How Much Does it Cost to Be a Network Marketer?
The costs to get started vary from company to company. On average, most of the network marketing companies I’ve read about have upfront costs between $300 – $500 dollars plus monthly fees.
Monthly fees can include the purchasing of the products in order to stay active with the company. The particular network marketing company I’m a distributor of cost me $39.95 to join and $15 a month in fees.
However, depending on the company, you can expect to come out of pocket for several hundred dollars.
Can You Make A Lot of Money in Network Marketing?
This is where you will have to do your due diligence and read the financial information of each company you are considering.
They should disclose what the average earnings are. In general, the results are not common. Meaning, making 5 figures or more is not the norm for most people who join the company.
It’s not to say it isn’t possible. The potential is there for anyone who becomes a distributor, but it isn’t likely if you do not work hard to build your downline.
What is Affiliate Marketing?
Affiliate marketing is much different than network marketing in that the start-up costs are extremely low and the earning potential is extremely high.
Like network marketing, you have to work your tail off to achieve success. However, there are no upfront costs to join or monthly fees. It is free to join affiliate programs.
For example, Amazon.com has an affiliate program. If you join it (and accepted) and add affiliate links to their products on your website, you earn a commission (percentage of the sale) each time someone purchases a product from clicking on your affiliate link(s).
Here is a flow chart of how it works:
How Long Does it Take to Make Money in Affiliate Marketing?
This is a tough question. Some people do really well in affiliate marketing right out the gate. On average, many people go through a huge learning curve, lots of trial and error, months or even sometimes years before they make any money.
The good news is, most people can make money anywhere from 6 months to a year if they stick to one method, become good at it, and work hard.
Many new affiliate marketers suffer from “shiny object syndrome.” They come across a product that promises to show them how to make thousands of dollars a month or how easy it is to live the dot-com lifestyle and they purchase it with no results.
A lot of scammy affiliate marketers will display themselves in front of sports cars, mansions or sipping drinks on the beach with their laptop. They will have you believe that you can do the same easily by buying their system.
True affiliate training programs that are about helping people learn the business won’t flash all of those dollar signs and fancy cars.
They will come across as professional and will show proof in the form of genuine success stories that their training works.
Network Marketing vs Affiliate Marketing Pros and Cons
Now that I’ve gone over the difference in the two industries, it is time to weigh the pros and the cons.
I’m basing this solely on my own experience as I am an affiliate marketer and also an independent distributor of a network marketing company.
Network Marketing Pros and Cons
Pros of Network Marketing
- You can choose a company to become a part of.
- Network marketing companies tend to have high-quality products/services.
- Earning potential is high (depending on your effort.)
- You choose who you want to work with.
- It is a very social business.
- There are a lot of perks for being a top seller/producer/recruiter.
- You are your own boss.
- You can work when and where you want.
- Offers lifestyle freedom.
Cons of Network Marketing
- It can be expensive to start.
- There are typically monthly fees and product to buy.
- You may spend more than you are making.
- You may face a lot of rejection when building your downline (team).
- It is a lot of work to build your team.
- The learning curve can be huge in terms of marketing.
- Whether you believe it or not, you are in sales so you must sell (products and the business opportunity).
- Many people will quit in your downline.
- Achieving 5 and 6 figure income isn’t the norm for most distributors.
- Sometimes the person you’ve signed up with isn’t the best mentor.
- You’re limited to promote/sell the products within the company.
Affiliate Marketing Pros and Cons
Pros of Affiliate Marketing
- Low cost to start – you can often start for free.
- No cost to join affiliate programs.
- You can promote products using free traffic, paid traffic, or both.
- Earning potential is unlimited.
- There is lots of training, tutorials, and programs to learn from.
- Unlimited amount of affiliate products to promote.
- Tech experience not required to start (but it helps.)
- You do not need to build a downline (team.)
- You can work alone, outsource help, or hire employees.
- Work your own hours.
- No purchasing of inventory.
- No shipping of products.
- No customer service.
Cons of Affiliate Marketing
- There is a learning curve if you research on your own. I suggest getting guidance.
- Income from affiliate sales can be slow going in the beginning.
- If you use PPC (pay-per-click) marketing, you can lose a lot of money without training.
- Obtaining free organic web traffic requires writing a lot of content.
- It is easy to start affiliate marketing and even easier to quit.
- A bulk of affiliate marketing is done online so you need to be comfortable with long hours on a computer.
The Verdict: Which is a Better Home Business?
Personally, I will choose affiliate marketing over network marketing any day. However, it is because I am more comfortable behind a computer screen rather than socializing with strangers about a business opportunity.
I’m not big on relationship building. If that is something you enjoy, network marketing may be the better fit for your personality.
I feel that there is unlimited potential with affiliate marketing. If there is a product or service you want to promote, you can. If there is one you no longer want to promote, you can stop.
When you are in a network marketing company, you are stuck promoting their products and services.
Also, I like the fact that there is nothing to buy on a monthly basis with affiliate marketing. It’s not to say it doesn’t cost money to do it. You have to pay for things like web hosting, buying domain names, training (if you choose to get it), software, tools, etc.
Those things can add up. However, not all of them are necessary. Mainly, you’ll need domain names and hosting to start with.
Can you do both network marketing and affiliate marketing? Absolutely! I am part of a network marketing company but I promote the products as if it was an affiliate marketing company.
You can be a network marketer and do affiliate marketing on the side. There is nothing wrong with doing both. You can become an excellent marketer in both industries.
Now that you have read the differences, pros, and cons, what is your opinion? Do you prefer network marketing or affiliate marketing? Leave your feedback in the comments. I’d love to get a discussion going!