Affiliate Marketing Vs. Network Marketing
When first hearing about Affiliate Marketing, I’ve heard many people say “I don’t want to hear about Network Marketing”. Let me be very clear that affiliate marketing and network marketing are not the same thing. That would be like saying a leopard and a kitten are both good house pets.
Affiliate Marketing: Most all the big players out there offer an affiliate program. (amazon, eBay, wal-mart, etc.) It is simply that they pay you a commission for referring people to purchase something from their website and it is almost always free to do. The main thing is an affiliate marketer you are not asked to “sell” and they handle everything once they receive your referral.
- Affiliate programs look for different activity from your referrals: Pay-per-Click (when your referral clicks a link), Pay-per-Performance (when they take a certain action), Pay-per-Sale (when they make a purchase), or Pay-per-Lead (when they opt in).
- Affiliate programs also have different payout structures: Flat Rate, Percentage, Tiered affiliate programs (pay you for what your referrals refer, can be two tiered or more), One-time or Residual income programs (pay lifetime commissions each time that referral purchases).
Network Marketing:This falls under direct selling and is a business opportunity/marketing strategy where the sales force (often referred to as an IBO or independent business owner) is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. It is very popular with people looking for part-time, flexible businesses. Many times they charge you to take any part of earning money with them and you are to directly sell their products and are often extremely limited to what they allow as far as marketing on the internet goes (which takes away your most powerful resource).
- Almost all Network Marketing companies have a Multi-tiered pay structure designed to pay residual income on a per-sale basis.
So if you missed it, affiliate marketing varies a lot more but has more power behind marketing strategies and does not have you directly involved in the purchasing or signing up process of your referral.
I am a very big advocate for anyone looking into Affiliate Marketing as you can immensely grow your current business by offering this program to others and conversely you can also build a business and income utilizing ones offered by others (make sure you get the right mentor though). The rest of this article is some food for thought for those thinking of getting into Network Marketing.
Is Network Marketing Worth It?
This is not a site about network marketing though having been a part of 6 of them in the past, as some of my close friends and relatives can verify, I have some unique thoughts on them. I neither encourage nor squelch people looking into network marketing, though I do offer some words of caution. Also be conscious that a network marketer is not exactly the same as owning a normal business, though it comes with some of those benefits. I am not actively involved with any right now, though my wife is a part of Amway, which I like for one reason. I love the person they have encouraged her to become. Aside from that anyone that knows me, knows that I wholeheartedly support who she is as well as the goals and dreams she has set for herself.
The Network Marketing industry has its strengths, weaknesses, and middle-ground as everything does; so, let’s examine them.
- It offers a powerful business model when operated correctly, empowering the average person to create their own economic standing outside of a traditional job.
- One of the industry’s greatest strengths rests within the training and education that the “system” and/or “up-line” (people who sponsor you, or sponsored the person who sponsored you, etc.) will provide you, in order to teach you how to better yourself and be involved with direct selling. lol having said that, some of the direct selling/marketing taught is also a weakness if done wrong. The basic structure of Network Marketing encourages people to recruit; and then to train the people beneath them to recruit and so on.
- They give individual people an opportunity to own a business and determine their own economic standing. Having said that, I have never seen one teach you how to use the tax advantages of being a business owner… which would be one of its greatest strengths if ever utilized. Make sure you do your own research and speak with an accountant of all the ins and outs of being a business owner if you ever go this direction. As I encourage everyone and anyone with an inclination of owning their own business to do so, I would suggest you look into this anyway 😉
- In owning your business in an mlm you do not have to worry about all of the legalities and headaches of having employees. No payroll, deductions, taxes, insurance, etc. Which is a huge benefit but honestly one I would hire someone else to handle anyway.
- Most never place a CAP on what you can earn and it is a way to earn profits (not wages) which we discussed earlier as an awesome financial model for getting ahead in life.
- For some people, finding a passion in life is difficult; though it is also a key ingredient to finding fulfillment. There are some who are able to find that flare within Network Marketing and if you ever consider getting involved with it, that passion (for both the company and its products) will be essential to your success with it.
- Few people actually get ahead earning money through MLMs for a number of reasons… failure to take personal responsibility in life, poor training from up-lines and not knowing what to do or able to figure it out. I have never heard of one that teaches good marketing principles that goes beyond your warm market (hopefully some actually exist though). Sometimes they just have poor products. Products are almost always way overpriced. Sometimes it is a startup company, which shortly after starting goes under. (startup is the most opportune and risky time to join one). Those are the main ones on my mind in the moment, though there are likely others.
- I believe it is hard to find a perfect business (one with integrity that has the best interest of everyone and always looks for a win-win). That also has the perfect product (which is one that you would naturally use anyway in my normal day to day life). That also doesn’t sell its products way over priced above normal industry standards. I think these 3 things are important because in order to sell something with integrity you need to believe in the company and the product you are selling and in general people have to be able to afford it.
- While you go into business for yourself which is a HUGE benefit, doing so in network marketing comes with it’s prices as well. The biggest one is company image and marketing (you have to remain in the bounds set by the main company). Since you’re building your business based on the company, a lot of possible failure ultimately remains outside of your control. Whether you spend a year or 20 years building your business, if the main one flops, then you are done.
- Because this business model has been abused (bad company, product , or pricing; often combined with poor marketing techniques) in the past it has left a sour taste for most people which will inevitably make it a bit more difficult to build and a harder sale.
- Your network you build up is in constant motion. Either it is growing or shrinking. If you quit growing it, especially since most sell products people don’t use all the time at prices paid they are used to paying then when you quit growing your network it will likely collapse in time; unless you have solidly set people to take over what you once did and they continue to do the same. My experience here is there really is no retiring from it. Though once people are high up they always seem to want to talk about how they got there anyways, so it may or may not be that big of a deal.
Summary and some of my own thoughts:
I see Network marketing companies as having an intriguing concept for a business model that contains a lot of potential and power – people working together to achieve a dream or vision. If I found a network marketing business model which, as mentioned above, was not being abused (i.e. a company that I believed in with a product I naturally used, sold by a company with complete integrity). I would jump in with both feet and join it (which is the only way someone should join one anyway).
As it is, I haven’t found one with 100% congruence to all of that.
Having said that, it doesn’t mean one isn’t out there, nor does that mean there is no other reason to join one. As mentioned, my wife is a part of Amway and I love that. Why? Because of the person they inspire her to become and the principles she learns from it. Robert Kiyosaki says the network marketing industry offers many unique benefits for those who want more out of life.” He says “the rich don’t work for money” they work for what they will gain and learn from the experience.
Jim Rohn said to “Set a goal to become a millionaire for what it makes of you to achieve it.” I certainly don’t believe that setting such a goal is for everyone but ask yourself. what would you have to become in order to double your income? Or if you want to be a millionaire? What fears would you have to learn to overcome? What skills would you have to acquire? Would you have to stretch to be comfortable in front of groups? What communication skills would you need? What kind of a leader or mentor would you need to be? How many lives would you need to touch in amazing ways?
Truth be told I have a BHAG (big hairy audacious goal) to start one of from scratch that merit’s all of the positive qualities above in everyone’s life. It will change a few markets and industries in doing so and will take about a billion dollars to get it off the ground… It may perhaps take me a number of years to get there but I will!!
Basically, Network Marketing has its merits for some and not for others. If you join one pay attention to who you are joining under and find someone you would want to be your personal mentor. Keep in mind that’s what that person is committing to be for you. The people you join up with will either encourage you to learn how to win friends and influence people or conversely the wrong people will teach you how to lose friends and alienate people. The people you are around will either inspire you or drain you. You cannot change those people, however you can change the people you choose to be around and you can choose how you will perceive and interact with the world around you.
As always thoughts and comments are welcome, please keep out propositions of selling your own MLM. Comments here are to encourage and empower growth and thought so everyone can make an educated decision that is right for their own life.