Network marketing and affiliate marketing are the most competitive methods for making money online.

But what are the pros and cons of these two giants marketing types?

If you are still confused about whether or not to choose one over the other, then this post can probably save your day, your time and even your money.

I have tried and tested both business models for years and I hope you can learn something from my experience.

You can read my personal experience of network marketing and affiliate marketing in the last part of this post.

Let’s go through the pros and cons of network marketing vs affiliate marketing and see which of the two is better.

In this article, network marketing refers to the most popular type of it, which is multilevel marketing. See the other types of network marketing below.

Table of Content:

Network Marketing is a typical home-based business model that depends on person-to-person sales by independent representatives. 

There are many reputable network marketing operations. Unfortunately, some have been denounced as pyramid schemes. The latter may focus more recruitment of salespeople who may be required to pay upfront for expensive starter kits than on sales to consumers.

Affiliate marketing is an advertising business model in which a company compensates third-party publishers to generate traffic or leads to the company’s products and services. The third-party publishers are affiliates, and the commission fee rewards them to find ways to promote the company.

The Internet has increased the prominence of affiliate marketing.

How Does Network Marketing Work?

  1. Join a network marketing company by paying an expensive starter kit
  2. Promote the company/products through word of mouth i.e. meetings, workshop, etc. (Some companies are offering a pre-made website for their members to promote on social media using paid ads)
  3. Recruit new members to buy the same starter kit
  4. Earn commissions every time people join the company on your down line.

How Does Affiliate Marketing Work?

  1. Join affiliate network (FREE) and find the products according to your interest. 
  2. Promote the products through your website
  3. Attract visitors to your website
  4. Earn commissions when people buy products through your affiliate links on your website

Network Marketing vs Affiliate Marketing: PROS and CONS

PROS: Network Marketing Vs Affiliate Marketing

Network Marketing

  1. Proven business model
  2. Unlimited potential income 
  3. Home-based business
  4. No skills required (training necessary)
  5. Investment starts from $200
  6. Teamwork with up lines and down lines
  7. Use the Internet and Social Media to Build an MLM Business

Affiliate Marketing

  1. Proven business model
  2. Unlimited potential income
  3. Home-based business
  4. No skills required (training necessary)
  5. Investment starts from $0
  6. Teamwork with the community with the same interest
  7. Use the Internet and Social Media to Build an Affiliate Marketing Business
  8. You can work anytime and anywhere as long as there’s internet
  9. Independent business
  10. You can promote different products from different companies in your chosen niche
  11. No recruitment
  12. No personal contact needed
  13. No inventory or startup kit required
  14. No customer service tasks
  15. No administrative work pertaining to direct sales
  16. No personal rejection
  17. No personal demonstration
  18. No personal meeting or workshop
  19. Passive income stream
  20. Expandable business model

CONS: Network Marketing Vs Affiliate Marketing

Network Marketing

  1.  Expensive startup kits from $200 or $100 a month and up to thousands of dollars
  2. Requires strong communication skills for personal contacts, meetings, workshop, etc. (acquired through training)
  3. You need to build your own network/team
  4. High turnover rates (people stop working at some point)
  5. High rejection rate
  6. Takes relative long time in building network
  7. Customer service required
  8. Administrative work (purchase and delivery requisition etc.)
  9. Recruitment of new members required to accelerated income
  10. Your business is based on membership or dealership.
  11. Geographically limited to where the company is legally operated.
  12. Takes time to earn money
  13. Passive income depends only on active down lines

Affiliate Marketing

  1. You need to build and maintain a website – cost from $0.
  2. Requires written communication skills (acquired through training)
  3. Conversion rate is very volatile (so it does to any business)
  4. Takes time to start earning money (it will compound as your website becomes bigger and bigger)

 

Different Types Of Network Marketing

 Multi-Level Marketing

Multi-Level Marketing (MLM) is the most popular type of network marketing business model. This is a distribution-based marketing network that is two or more tiers “deep”. Some MLM programs allow you to earn money five or more tiers deep.

MLM has at least 4 types of compensation plans: Unilevel, Binary, Matrix, and Breakaway.

 

Two-Tier Network Marketing

This type of network marketing applies to a business model that pays you for direct sales or traffic you refer to a website and for direct sales or traffic made by affiliates or distributors you recruit to work under you.

From the word itself, the network stops on the second line, which means you and the people directly under you. 

Single-Tier Network Marketing

This type of network marketing applies to an affiliate program wherein you sell their product or service and you get paid commissions when a direct sale is made through your recommendation. Some example of single-tier networking is the pay-per-click (PPC) and the pay-per-lead (PPL) affiliate programs. 

In this method, you do not need to recruit new distributors and you are not limited to only one affiliate company.

 

Other Types

There are two other types of network marketing strategies, which are not so popular compared to the above-mentioned types:  market-driven networks and name-driven network marketing.

 

IMPORTANT:
The FCC advises that that single-tier network marketing operations tend to be more reputable than multi-tier schemes.

My personal experience with Network Marketing

Hearing the words “networking”, “network marketing” or “multi-leverage marketing” reminds me just one thing – all the MLM businesses I tried and failed before.

Thinking back why I failed, was probably because I’m honestly a shy person and I don’t enjoy public speaking as well as explaining the business over and over again to my families and friends.

I was first introduced to this business model through Forever Living when I was in college. I tried to borrow money from my dad for the investment and he directly went to the office to find out what it was, then he immediately turned down the opportunity (lol).

I also sold Avon products when I was in college mainly because I personally used the products and I get huge discount being a distributor. That was pretty cool.

I joined an MLM company, called PowerHomes when I was in my 20s because my brother recruited me (lol). We held a lot of workshops, free dinners for seminar and symposiums. I managed to recruit just one person outside my family and friends circle. Believe me, it wasn’t easy.

One time I applied for a job as an area manager of a newly established company. To my big surprise, it was a network marketing business.

They required me to sell just 2 water filter packages and I was told that it was the pre-requisite to become qualified for the position (lol). I managed to sell just one package and I quit. Don’t ask me who bought it (lol) – ok, it was boyfriend’s mom who was just too shy to say no (lol).

So, I said. No more! But it didn’t actually end there.

After many years have passed (approx. 10 years), my brother recruited me again (I honestly have difficulties in saying “no”) so I joined the VitaPlus. Well, it was a good company and I love their products – beauty products, herbal juices, and herbal oil.

I earned a little bit. However, the entire effort of inviting all my friends and the friends of my friends, cooking dinner and talk about the same thing over and over again didn’t worth it all. Men! I was so exhausted! I wasn’t just born to be an MLMer or networker – I just can’t imagine myself doing that every single weekend (lol).

Personal Conclusion: The Scammer Paranoia

One thing I noticed from time to time during my failed journey in networking was that it’s very difficult to convince people to join in.

As soon as they hear about the business model or just hearing the words “MLM” or “Networking”, they will automatically think it’s a pyramid scheme or just a scam. The worst thing was that I was thinking all the time about whether people thought I was a scammer too just because they didn’t understand the business.

My personal experience with Affiliate Marketing

If you have been following me, you’d probably know that I love side hustles. It was actually how I achieved financial freedom at the age of 24, because of different side hustles. 

I always have an open mind, I like to learn new things and I like trying things out.

My biggest regret with affiliate marketing is that I took it for granted for many years. I started back in 2009 during my maternity leave with my firstborn child and stopped just because I thought it was complicated and I didn’t have time to learn.

My online business could have been much bigger today if I didn’t stop back then.

One my second maternity leave, I met one of the best affiliate training programs for online entrepreneurs and I took it seriously this time.

Today, I finally learned how to properly build and leverage the billion dollars online industry. And the best part is – nobody can steal the skills that I have and will have in this business. 

Conclusion: Passive Income Effect

What I love with affiliate marketing business is that it can become your passive income stream. For example, writing product reviews. Writing a product review is like a set and forget mechanic.

You simply: Write a product review–> apply SEO technique for free traffic on search engines like Google –> Earn revenue.

That’s it. Just write as many product reviews as you want, keep them updated once in a while and you can continuously earn commissions from them over and over again even while you sleep. 

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