Digital marketing is a vast ecosystem. So vast that it’s nearly impossible for an individual to master every aspect of it. This is why people find their area of interest and carve a niche for themselves. Speaking of niches, affiliate and network marketing are two of the most popular aspects of digital marketing. But when it comes to these two, it’s very easy to mix things up due to their similarities, especially in the way they operate. Therefore, this article aims to dissect these two important aspects of digital marketing and compare affiliate marketing vs network marketing to give you a deeper understanding and help you make an informed decision.
Are you excited to learn more? Well, I am excited. Nevertheless, we need to take things from the basis if we’re going to achieve the goal of this article. And to achieve it, let’s start with the definitions;
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What is Affiliate Marketing?
While it’ll be a lot easier to give you an abstract definition of affiliate marketing, I’d rather give you a practical scenario for a better understanding. So, picture this: Company A sells T-shirts and is looking for new customers. You as a digital marketer approach Company A and offer to advertise their T-shirts through their affiliate marketing programme. Company A then gives you a tracking link that you will use to refer customers to their website so they can buy their T-shirts. Now, whenever a customer uses your link to access their website and buy a T-shirt, you get a certain commission off of whatever the customer buys. That is how affiliate marketing works.
In a nutshell, affiliate marketing pays you based on every paying customer you refer to the affiliate company. However, this equally depends on whether the company is selling a product, or services, or just looking for more sign-ups. For example, a website that sells products or services will pay you whenever a user comes in through your affiliate link and buys their product or requests for their service. On the other hand, you get paid for every sign-up in the case of companies looking for signups. Additionally, some companies may pay you for impressions and clicks generated by your affiliate link.
What is Network Marketing?
Here’s another scenario for you: You’ve had a stressful day at work and you’re trying to make your way home to get some rest and prepare for the next day. Amidst the bustling traffic noise, a random guy approaches you, telling you about this programme that can potentially turn you into a millionaire. However, you need to buy a certain number of products and refer five (5) more people to sign up for the programme. Those people you referred will also need to refer 5 users each and buy the product. The more users you or your referrals bring to the company, the higher your chance of becoming a millionaire. That is the scope behind network marketing.
Put simply, network marketing or multi-level marketing (MLM) is a pyramid scheme that utilizes a person-to-person approach to generate more sales while at the same time recruiting more marketers. In this scheme, your priority is referring as many people as possible to the programme to promote you to the next stage and earn more. The higher up the rank you are, the more money you make. In addition to referring people, there’s usually a monthly, quarterly, or yearly target on the number of products you must buy from the company. By meeting the target on product purchases and referrals, you have a higher chance of earning more.
Affiliate Marketing vs Network Marketing: What Differentiates Them?
Now that we have a basic understanding of what affiliate and network marketing are, let’s take things a little deeper by talking about their differences. How does affiliate marketing differs to network marketing?
1. One is Digital, the other is Personal
The first thing that differentiates these two is their nature. The very nature of affiliate marketing is digital while network marketing is personal. Here’s what I mean; in affiliate marketing, you need some e-banners and links that you’re going to broadcast over the internet. It utilizes many traffic sources, such as blogs, YouTube, newsletters, and other social media channels. On the contrary, network marketing involves person-to-person engagement. It has to do largely with how you can interact with people and convince them to join the scheme. You need to look for people, post on social media, convince your church members, family members, old schoolmates, etc., and try to get them involved in the business.
2. Affiliate Marketing is Passive, Network Marketing is Active
The second thing is the level of attention they require. For affiliate marketing, it’s more of a passive income than an active income. This is because you don’t need to dedicate hours or days to advertising the affiliate company. All you have to do is place your affiliate banner and links where your traffic can see them and focus on other important things, like creating more content for your audience or focusing on other side hustles. Meanwhile, network marketing requires all the time you have. Here’s why; one-on-one engagement takes time. You need to get out of your comfort zone, look for people who might be interested and sell to them.
3. Network Marketing Takes Time, Affiliate Marketing Doesn’t
Another thing you must know is that network marketing is a scheme for patient people. You need time and patience to grow your network and rise through the ranks. Meanwhile, this “time” is not a matter of weeks or months, we’re talking years. Let’s say five years and above, to say the least, depending on how quickly you’re able to grow your network. On the contrary, you can earn hundreds of dollars from affiliate marketing just in a few months after starting, depending on the size of your audience and the niche you’re selling in.
4. Network Marketing is Expensive, Affiliate Marketing isn’t
Let’s round this section up with the start up cost of the two. Affiliate marketing doesn’t require a startup cost. As long as you have enough money for a data subscription, you have enough money to start affiliate marketing. Network marketing, on the other hand, is quite expensive. It often requires a start up cost for joining the company and getting the product, and in some cases, training materials too. This could also be an ongoing payment depending on the company. Meanwhile, this capital varies depending on the company and how much product you need to buy.
How Much Can You Make From Affiliate Marketing and Network Marketing?
To answer this question, let’s take a look at the commission structure for affiliate marketing. Affiliate marketing pays you between 5% to 15% of the first-ever purchase made by your referrals. Meaning that, if I use your tracking link to enter a website and I buy a product worth $100, you will earn between $5 to $15, depending on the company’s policy. Meanwhile, this commission is only on the first order I make. If you go ahead and make another order of $1000, you’re not getting anything again.
So, how much can you make in a year from affiliate marketing and network marketing? This depends on the niche you chose, your marketing strategy, the size of your audience, the products you’re selling, and your dedicated efforts, among other things. Let’s say you have a blog about book reviews, you will earn more if you sell books than if you sell clothes and accessories. Now, how much can you make from affiliate marketing? The average annual income of affiliate marketers, according to Glassdoor, is $2000, with the lowest end at approximately $970 and the highest end being over $3800.Meanwhile, how much you can make from network marketing depends on the size of your pyramid, how high up the rank you are, and how long you’ve been into it. Remember, MLM takes time.
Final Thoughts
While we can keep going on and on about how affiliate marketing differs from network marketing, I strongly believe that the little we’ve talked about here is enough to guide you in making an informed decision in 2025.While you make millions of dollars annually from network marketing, it’ll take about 20 years, if not more, to reach that level. However, once you have a few dedicated down lines that are passionate about growing their network, your growth becomes more sped up and a lot easier. Lastly, you must understand yourself. Know your strengths and weaknesses before you make a decision. If your communication skills are not good enough, it’s best to steer clear of network marketing.