Updated: September 27, 2022
Network Marketing vs Affiliate Marketing. Who is the Winner in 2018?
Filed in affiliate marketing, Making Money, Popular, Starting an Online Business by Rufat
I’ve been working online since 2013 and making money since 2015. Over the past 4 years I reviewed over 400 make money programs and gained many skills for this period. I’ve been reviewing various programs, such binary options trading programs, affiliate marketing programs, multi-level marketing programs. Reviewing programs is not an easy work. But this allowed me to gain a lot of knowledge and now I know how many of these systems work. I know which one to recommend and which one to avoid. Today I want to talk about affiliate and network (multi-level) marketing to help you understand how they work and who is the winner. I believe any of this can be a winner because everything depends on your skills and experience. At the same time I believe affiliate marketing is way better and there are way more success stories than in network marketing. I will try to show all pros and cons of both affiliate marketing and network marketing. Let’s see who is the winner.
Network or multi-level marketing
Multi-level marketing is one of business models that has been around for many years and it actually can make you money if you know how to do it. Some people love network marketing while others hate it. Some people even call all MLM companies scams. I’m not in the position to call everything what I hate a scam because it’s not a realistic approach. I think we have to be honest and make conclusions based on strong arguments. Someone may agree and someone may disagree. This is ok. This is very normal. I may be wrong too. But I will try to stay objective in my article.
Getting new customers through recruiting
Multi-level marketing means you make money not only from each sale that you make personally but from anyone whom you recruited and they make a sale too. Once your recruited person has made a sale you earn a commission. Some MLM companies pay even from sales made by people recruited by the person who you recruited. That’s why it’s called multi-level marketing. Their compensation plans are always very complex and it’s not always clear how you make money and how much. They push you to the top and assign you as a director, or regional director or ambassador or whatever it may be. I don’t know exactly. It varies from one MLM to another MLM company. Is it good that you get paid from the sale that someone makes? Yes and NO. It’s good when you can recruit a huge army of people that you will be making money from. And it’s bad if you can’t recruit them or if your recruited people can’t make sales. In fact, most people that you recruit can’t do it. Most of them will quit after 2,3 month of joining. This is the reality.
Getting new members is an extremely hard in any business, offline or online. I know it firsthand. I’m involved in affiliate marketing and over the past 3 years and half I invited 4900 people and only 428 became members of affiliate marketing community. So, it’s not easy. I’m not a network marketer. I’m an affiliate marketer. I promote varies products on my site and affiliate marketing program that I’m a member of is one of many other products that I’m promoting on my website. I mean affiliate marketing is different from network marketing. Network marketing is mainly focused on recruiting people. If you can’t recruit enough people you won’t be making enough money. Like I said, most people can’t do it and that’s why most members of MLM programs fail in the business.
Another aspect of network marketing is about making sales. In fact, when you join MLM company you need to be able to sell their products to others because your income from MLM comes from two sources: sales and recruiting. In order to make sales you need some good experience in this field. If you can’t do it your income will be equal to zero $. Most people who join have no previous experience. I mean you need to constantly find new people, new customers and promote to them. Also keep in mind that most MLMs require you to meet their minimum sales quota. For example, it may be a requirement for you to make $1000 in sales per month. If you can’t meet then you can be a member and make money. If you think it’s not for you then you better stay away from MLM business.
Strong communication skills
When you join MLM company you become a different person. You need to become another person or you won’t make money. I mean you need to have good communication skills to make new contacts almost every day. You need it in order to promote MLM products. You also need to organize home parties and promote products, show brochures. Some people don’t like this type of communications and don’t like selling. If you are one of this type of people then you shouldn’t join an MLM company.
It’s not a secret that all MLM companies always have a good compensation plan and give good payouts to their members. The question is: How do they pay such high commissions? And why? Because their products are sold at a high price so they can pay such high commissions to their members. Some MLM programs sell products for $10.000 or even $20.000. This leads to MLM products being so expensive. And this leads to another problem which is the competition.
Competition is a very serious aspect that you will face in MLM business. You will have to sell expensive products which is not going to be easy. Because there will be many other products of the same quality but sold by non MLM companies at a lower price. You will have to compete with all these companies. You will have to explain to your potential customers and convince them why they should pay for MLM expensive products instead of paying for non MLM cheap products.
Questionable MLM product claims
Not always but vey often MLM companies describe their products as the best products in the world that contain some special
additions that no other products in the world do. They claim that their products will cure you from cancer, diabetes, AIDS or some other serious incurable diseases. Plus they try to convince people to buy their products on a long term basis, i.e. by subscribing to monthly purchases. As if their products can cure them only if they take them for 6 months at least. Of course such an approach will make MLM company more money.
Forcing you to buy more
When you join an MLM company you will be assigned to a team and the sponsor. Your sponsor will be always convincing you to buy more MLM products so you can make more money. Not all MLM companies practice this approach but many of them do so.
U.S. Securities and Exchange Commission and MLM
Due to a high number of complaints from people failed in MLM business U.S. Securities and Exchange Commission issued a warning that you can read below. It clearly says that pyramid schemes can’t be sustained and collapse eventually. `it also clearly says: Be skeptical if you receive more compensation for recruiting others than for product sales. This is what we can see in many MLM companies. It’s not a rule but true fro many MLM companies. They normally have a very generous compensation plan so they can attract people.
Low success rate and complaints about MLMs
I can’t say that all MLM companies are bad or scams. Not at all. Some of them have been in the business for 20,30 years. They offer quality products and reasonable compensation plan. Most MLM companies are doing it in the wrong way. That’s why they get shut down, such as Empower Network, Zeek Rewards, Wake up Now, Digital Altitude and many others. There have been many lawsuits against many MLM companies. For example, Mannatech paid $750.000. Amway paid $34 million. Many MLM companies have hundreds complaints against their companies. Just as an example you can read my review about , or . All these MLM companies have been in the business for many years and still there are many complaints against them. Also, it’s a fact that success rate in MLMs is very low. John Taylor believes 97% of mlm members fail and never make any money in this business.
Compared to affiliate marketing MLM requires you to invest in MLM products first and then sell them in order to make money. Sometimes it may be $100 in the form of a starter pack. This is totally acceptable. But very often you need to invest thousands of dollars like , . Sometimes they ask you to pay up to $20.000 like in MOBE. This is absolutely unacceptable in my opinion. In affiliate marketing it’s different. You can start your online business even with $200-$300 and turn it into solid monthly income like $2000-$3000 or even $10.000 per month.
Affiliate Marketing vs Network Marketing
I hope it’s clear for you now what MLM business model means and what you can expect from it. You already know if network marketing is for you or not. From the first day I knew it was not for me. Compared to MLM affiliate marketing is very different.
First of all, there are no obligations whatsoever. You can promote any product, program, service and make money from your website. There is no minimum sales quota you must meet. You make a sale you earn a commission. You don’t make a sale you don’t earn a commission. That’s it. But some programs are a little different. For example, if you decide to become an Amazon.com affiliate then you must make at least one sale in the first 6 months. If you can’t then Amazon can terminate agreement with you. Amazon is the biggest player in online space and they have their rules. Most companies don’t have such rules. Very few of them do it.
You can start with zero or little investment
Affiliate marketing doesn’t require monetary investment. In fact, you can start with a free hosting and free domain name. But it’s highly recommended to buy a domain name that will cost you approx. $10 per year and a hosting that will cost you approx. $50 per year. Premium wordpress theme will cost you around $60. This is all need for your online affiliate marketing business. All other tools, such as keyword tool or analytics tool are free. You can you Google keyword planner, Google webmaster and Google analytics. All other tools, such as Semrush or broken link checker or page speed tester, seoreviewtools and many others are free too. Most plugins are free too. Even if you invest in autoresponder it will cost you $19 per month. Not so much to be honest compared to how much you can make online. But email marketing is not so important when you are just starting. More important is to go through affiliate marketing training that will show and teach you all you need to be successful in affiliate marketing. You can start with a free account like I did back in 2013 and then upgrade your account and become a paying member for $49 per month. This is really important for your success. You can stop paying at any time you want. There are no obligations. To complete the training you will need approx. 3 months at least. This will be your starting point.
Hard work required
But affiliate marketing is not an easy path to success. Without hard work you can’t make money. Your main work will be writing articles for your website, creating videos for your youtube channel, hanging on social media, such as Facebook, Twitter, Instagram, doing SEO for your website to get it appear on the first page of Google search results, email marketing or even creating Telegram channel. You will be doing all this in order to get free targeted traffic to your website. The more traffic you get the more money you can make. Otherwise you will have to buy traffic from Google, Yahoo or Facebook. It’s highly recommended to start with a . This is going to be your main skill you need to develop as an .
How much can you earn online as an affiliate marketer?
As an affiliate marketer you can make zero $ or thousands of dollars per month. It depends on how much work and time you put into your affiliate marketing business. I’m personally making $1000 per month. Sometimes $1500 or even $2000. Sometimes I make $200 per day. It really depends. I haven’t been working hard enough for the last year to be honest and that’s why my income is not high. I could be making more if I worked harder. Here is my income proof here and here. I know affiliate marketers that are making $10.000 per month. So, it’s possible if you are willing to work hard.
How long does it take to make your first dollar online as an affiliate marketer?
It depends. I made my first dollar online back in 2000. When I started my second main business in 2014 I made my first dollar after 4 months of launching my affiliate marketing website. I started making money consistently in 2015. I know affiliate marketers who made their first $10.000 after 18 months of starting affiliate marketing business. So, I don’t know when you earn your first dollar as an affiliate marketer. It depends on how badly YOU want it.
Recap and final word about network and affiliate marketing or who is the winner in 2018?
I tried to explain everything in details regarding network and affiliate marketing. In my opinion, affiliate marketing is the absolute winner and I explained why. It doesn’t require a lot of monetary investment and you are free to work out your own schedule. You can build your very own affiliate marketing business based on your passion or interest. There is no sales quota to meet or recruiting work. Making money in MLM is also possible. BUT success rate in affiliate marketing is much higher than in MLM. Maybe I was wrong somewhere in my conclusions. If you think differently you can leave your thoughts below in the comment section.