Marketing has always been a dynamic industry. What is in trend today might become truncated tomorrow. That’s just the nature of this industry. In 2023, affiliate marketing and network marketing are the trending terms in the marketing industry. The network marketing industry stood at a whopping $189 billion at the end of 2021 and is growing at a CAGR of 6.1% while the affiliate marketing industry is valued at $17 billion. These techniques together bring a lot of opportunities to the table. Let us have a look at what both of these terms mean and which one might be the best choice for you to earn a steady income.
Affiliate Marketing vs Network Marketing
On this page:
| Parameters | Network Marketing | Affiliate Marketing |
|---|---|---|
| Definition | Network marketing is the practice in which different tiers of salespeople are hired to create a network of marketers who promote different products & services directly to the customer. | Affiliate marketing is the digital marketing practice in which a marketer earns a commission for promoting different products from an online retailer through different channels on the internet. |
| Reach | Network Marketing can create a huge network of marketers who can promote a product to millions of potential customers without putting much additional cost on a business. | Affiliate marketing requires some effort to create a huge following. Content creation helps marketers to influence a large number of people to buy their affiliate products. |
| Competency | A network marketer does not require much technical background. Some basic company training along with soft skills development can make you a successful network marketer. | An affiliate marketer does not require any prior experience. Any amateur or experienced person can enter the industry to start earning. |
| Investment | Network marketers may be required to keep an inventory of products to effectively market their products. | Affiliate marketers do not require to invest a single penny into their business. |
| Component | A network marketing funnel gets multiple times bigger as more tiers get added to the strategy. | Affiliate marketing has three main components – an affiliate marketer, an online retailer, and the customers. |
| Customer Interaction | Network Marketing requires active customer interaction on part of a marketer. | Affiliate marketers do not get in direct contact with potential customers. |
What is Affiliate Marketing?
Affiliate marketing is the process by which a marketer earns a commission for promoting an online retailer’s products and services through different online channels. These channels include social media, messaging platforms, blogs, video streaming platforms, and more. Affiliate marketers generally depend on content creation to create demand for any product in the market. It is a mutually beneficial agreement through which companies get higher returns with minimal investment, marketers get a steady income and customers get to take advantage of exclusive discounts and offers.
Many people get confused between affiliate marketing and Influencer marketing but let me tell you they are altogether a different marketing channels. Check out our guide to know more.
Types of Affiliate Marketing
1. Unattached Affiliate Marketing
Unattached affiliate marketing involves running pay-per-click (PPC) campaigns on platforms like Google AdWords or Facebook ads without having a personal presence or authority in the niche being promoted. The focus is on using these platforms to display affiliate links and entice users to click and make a purchase, earning a commission without establishing a direct connection with the target audience. This approach appeals to those who don’t want to invest in building a reputation or gaining trust within a specific online community. It provides an option for individuals who are hesitant to dedicate time and effort to creating a blog or website or have limited availability.
2. Related Affiliate Marketing
In related affiliate marketing, affiliates promote products or services directly relevant to their niche or expertise. They use their influence and knowledge to drive traffic to these offerings, positioning themselves as trusted sources. It is essential to mention that affiliates do not make claims based on personal use or experience with the promoted product or service.
3. Involved Affiliate Marketing
Involved affiliate marketing occurs when an affiliate has personal experience with a product or service, genuinely believes in its value, and wholeheartedly recommends it to their audience. This type of marketing establishes a strong connection between the affiliate and the offering, as their endorsement is based on firsthand knowledge. The affiliate’s positive experiences become the advertisement itself, positioning them as a trusted source of information. However, it is essential to consider that if any issues arise with the product or service, the affiliate’s reputation could be impacted since they have provided recommendations.
Parties involved in Affiliate Marketing
Affiliate marketing generally involves four primary parties:
- Affiliates: These are individuals or entities who promote products or services to their audience.
- Product creators: They are responsible for developing and creating the products or services affiliates promote.
- Networks: These platforms or organizations manage affiliates, handling tasks such as tracking, reporting, and payment processing.
- Consumers: They are the end users or customers who purchase and use the products or services that are promoted through affiliate marketing.
Can you Really Make Money as an Affiliate?
It is possible to earn money as an affiliate marketer. Numerous affiliates have established profitable businesses and generated substantial income through affiliate marketing. However, success and earnings can vary significantly depending on several factors, including the chosen niche, marketing strategies employed, audience reach, product selection, and the individual’s dedication and effort.
How Much Money Can You Make as an Affiliate?
In affiliate marketing, the commission rates for successful conversions through affiliate links usually fall within 5% to 15%. However, in high-demand product categories, sellers may offer lower commission rates. While most sales result in one-time payments, there are instances where referrals can generate recurring payments, especially for products or services with subscription-based models that involve regular costs.
In terms of potential income for affiliate marketers, statistics indicate that their earnings can be considerably higher. According to affiliate marketing income statistics from Glassdoor, the average annual income for affiliate marketers is ₹1,80,000, with earnings ranging from ₹84,480 on the lower end to ₹3,32,759 on the higher end.
How to Start Affiliate Marketing?
To start affiliate marketing, follow these steps:
1. Choose a Niche: Select a niche that matches your interests, knowledge, and target audience.
2. Research Affiliate Programs: Find reputable affiliate programs related to your niche, such as EarnKaro, individual company programs, or affiliate marketplaces.
3. Join Affiliate Programs: Apply to affiliate programs that meet your criteria and align with your niche.
4. Establish an Online Presence: Create a platform (e.g., website, blog, social media profile) to connect with your audience and promote affiliate products.
5. Create Valuable Content: Produce high-quality content that provides value to your audience and strategically incorporates affiliate links.
6. Drive Targeted Traffic: Implement marketing strategies to attract relevant traffic to your platform, such as SEO, social media marketing, and content promotion.
7. Promote Affiliate Products: Integrate affiliate links naturally into your content, including product reviews, tutorials, comparisons, or personal recommendations.
8. Track and Optimize: Monitor the performance of your affiliate campaigns using analytics tools and optimize your strategies based on data.
9. Adhere to Guidelines and Disclosures: Comply with regulations and guidelines by transparently disclosing your affiliate relationships and following ethical marketing practices.
10. Expand and Diversify: As you gain experience, consider expanding your content, diversifying your income sources, and exploring new affiliate programs or niches to scale your affiliate business.
What is Network Marketing?
Network Marketing, also known as Multi-Level Marketing or Consumer-Direct Marketing is a business model that depends on salespeople (network) to bring leads and conversions for a business. Network marketing is also known as ‘Pyramid marketing’ since the salespeople hired by the company (tier 1) can form another tier (tier 2) of salespeople on their own accord. The tier 1 salespeople will earn a commission on their own sales along with a commission on the sales that their hired lower tier salesperson makes. The second tier is also free to hire more people to work under them. This creates a pyramid-type structure in which the topmost individual (the company) ends up making the most amount of money while the lowest tier may be left for chunks.
Difference Between Affiliate Marketing and Network Marketing
1. Definition
Network marketing is the process of building a pyramid type of structure with different tiers of marketers. These network marketers are free to form more tiers of marketers to help in promoting a product/service. Network marketers contact customers directly to promote their company. Affiliate marketers, on the other hand, act on a commission-per-sale basis and help companies create demand for different products through content creation.
2. Reach
Network marketing may be able to increase the reach of a company by creating a pool of a large number of salespeople. Affiliate marketing may require some time to create a considerable number of potential consumers since it is based on a passive form of customer interaction viz. content creation.
3. Competency
Network marketers may need some training before they start promoting the products/services for a company. They might need some technical skills, a basic understanding of the product, and soft skills like communication, coordination etc. to find success in network marketing. Affiliate marketers, on the other hand, can start without any training on experience. However, they might need some basic understanding of customer perception and content creation.
4. Investment
Network marketing might require a good investment from the company as well as the marketer. The company has to pay commissions to all network marketers that get added to different tiers and the marketers might have to maintain an inventory of products to sell further. Affiliate marketing is a much more affordable way to make money for both companies as well as marketers.
5. Component
Network marketing involves the main company, different tiers of salespersons, consumers, distributors etc. Affiliate marketing mainly involves three players – the company, the marketer and the consumer. Occasionally, one may find the involvement of an affiliate marketing intermediary as well.
6. Customer Interaction
Network marketing requires active interaction with the customers to help them understand the product and to generate effective leads and sales. However, affiliate marketing does not require any direct interaction with the end consumer.
Is there any similarity between Affiliate Marketing & Network Marketing?
Yes, there are some similarities between network marketing and affiliate marketing.
- Both Affiliate Marketing and Network Marketing require the active promotion of goods or services on behalf of a business. Marketers may use different techniques to affect customer perception but the end goal to increase sales remains the same.
- Both forms of marketing call on the user to spread the word about the good or service to their personal network of contacts. Word of mouth is a big factor to bring recurring as well as new sales for both kinds of marketers.
- Both Affiliate, as well as Network marketing, use a commission, per-sale model. This means that marketers make money for every conversion they bring for their retailer partner.
Which one should you Choose to Make Money?
Affiliate Marketing is the trend in 2023. Everybody is doing it and making good money by creating demand for their clients. Network marketing may generally involve low commissions depending upon which tier you fall under in the company’s marketing pyramid. On the other hand, affiliate marketing provides you with the freedom to join the highest-paying affiliate programs.
All in all, affiliate marketing can be a better way for marketers to make money while working from home. It leaves marketers with the freedom, earning potential, and simplicity that they may need to build a successful business.
Affiliate marketers can start their business by joining platforms like EarnKaro which has partnerships with over 150 online retailers. EarnKaro provides the best deals in the market which affiliate marketers can share and earn great commissions. Everything related to tracking links, commission tracking, and confirmation is taken care of by EarnKaro. So, beginner affiliate marketers do not have to worry about anything.
Conclusion
Affiliate marketing and Network marketing may have some similarities but they could not be more different from each other. Different marketers may choose to engage with different techniques depending on their preferences, goals, time availability, skills, etc. We are sure that if you have come this far, you will now be able to make an informed decision on which road to take.
Last but not least do check out our recent blog where we have explained how affiliate marketing is different from dropshipping. Do give it a read.
FAQs
Depending on where you are in the company’s marketing pyramid, network marketing may typically have low commissions. On the other side, affiliate marketing gives you the flexibility to join affiliate programs with the best payouts.
In many network marketing programmes, marketers at various levels simply recruit new marketers, with no one actually selling many things. Affiliate marketing is a much easier and more rewarding way to start generating income by promoting goods and services that you genuinely value. Because of this, affiliate marketing outperforms network marketing.
The term “affiliate marketing” refers to a sales model where affiliates are used to promote products or services online and generate leads or sales in exchange for a commission. Network marketing, on the other hand, is a company strategy focused on direct sales made by a network of distributors.
