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
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| 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 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.
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.
What is the 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.
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.
