Affiliate Marketing vs Network Marketing: Which is Better?

Nowadays, businesses are free to choose how to promote their products and services. There are two prominent marketing strategies: affiliate marketing and network marketing. These models have also revolutionized how marketers can earn income by promoting staff, but they differ significantly in their approaches and structures.

Delving into the intricacies of each, we aim to unravel the distinctions between affiliate marketing vs mlm marketing to determine which avenue might be more advantageous for aspiring marketers and entrepreneurs.

What is Affiliate Marketing?

Affiliate marketing is a type of marketing which includes advertisers who sell products and affiliates who promote the offers. Advertisers place their products and services in affiliate networks. Then these platforms suggest affiliate marketers a wide range of offers to promote. So, affiliates earn a commission for driving desired actions, such as generating leads, sales, or clicks, to the merchant’s website through their marketing strategies.

This marketing model benefits both advertisers and affiliates. The merchant gains increased visibility and sales through the efforts of affiliates, while webmasters can earn passive income by promoting products or services to a target audience.

How Do Affiliate Marketers Get Paid?

As a rule, marketers are paid for actions completed by users. This means that their earnings don’t just depend on sales. Let’s take a closer look at the most popular payment methods.

CPA

CPA (Cost Per Action or Cost Per Acquisition) is a pricing model where advertisers pay for a specific action taken by a user, such as a purchase, form submission, or another predefined action.

CPS

CPS (Cost Per Sale) is a commission type where advertisers pay a commission to affiliates or publishers for each sale generated through their marketing efforts.

The CPS model is beneficial for merchants as they only pay when a sale is completed, ensuring that they are receiving a ROI (return on their investment).

CPL

CPL (Cost Per Lead) is a commission model used in affiliate marketing and online advertising. In the CPL model, advertisers pay marketers a fixed commission for each qualified lead they generate. A lead is typically defined as a potential customer who has shown interest in a product or service by providing their contact information or taking some other specific action such as signing up for a newsletter, requesting a quote, or filling out a form.

CPC

CPC stands for Cost Per Click. It is a commission type where advertisers pay a fee each time a user clicks on their advertisement or affiliate link. It is a measurable and transparent model since advertisers can track the performance of their campaigns based on the number of clicks received.

CPI

CPI, or Cost Per Install, is a commission model within affiliate marketing where affiliates earn a commission when users click on their affiliate link from an advertisement and successfully install an app. The crucial distinction here is that the user must complete the installation rather than simply opening or viewing the app.

Some CPI offers may require not only the installation but also the opening and usage of the app at least once. If users click on your affiliate link but fail to take any action, such as downloading the app, advertisers do not offer compensation.

RevShare

RevShare is a revenue sharing commission structure in which affiliates receive a percent of the revenue generated from customers or sales they refer. This method is widely employed by affiliate networks and programs to motivate affiliates to drive valuable traffic and generate sales for the merchant or advertiser.

In contrast to the CPA model, where affiliates typically receive a one-time payment, RevShare entails receiving commissions multiple times over a specified period. Essentially, Revenue Share involves advertisers sharing a percentage of their revenue with affiliates.

Hybrid

This commission type should be clear now as it essentially merges the two strategies mentioned earlier – both CPA and RevShare. Typically, each element of the hybrid model offers a slightly lower rate compared to standalone CPA or RevShare plans, but the advantage lies in benefiting from both structures.

For instance, instead of opting for a pure CPA or a 20% RevShare arrangement, the affiliate marketing network presents a Hybrid option featuring a $200 CPA alongside a 10% RevShare.

Benefits of Affiliate Marketing

In general, affiliate marketing is a rather lucrative opportunity to boost your income. And there are numerous benefits for advertisers and affiliates.

For Advertisers

• Cost-Effectiveness: Advertisers only pay for real results, such as sales, leads, or other desired actions, making it a cost-effective marketing strategy with a clear ROI;
  
  
• Increased Brand Exposure: Affiliate marketing allows advertisers to reach a wider audience through the promotional efforts of affiliates, increasing brand visibility and exposure;
  
  
• Access to Diverse Marketing Channels: Advertisers can leverage various marketing channels and strategies used by affiliates, including content marketing, social media, email campaigns, paid advertising campaigns, and more, to reach different audiences;
  
  
• Targeted Marketing: Advertisers can work with affiliates who have specific niche audiences, enabling them to target their marketing efforts more effectively and reach potential customers interested in their products or services;
  
  
• Risk Mitigation: With the pay-for-performance model of affiliate marketing, advertisers can minimize financial risks by paying only for actual results achieved through affiliate efforts;
  
  
• Partnership Opportunities: Affiliate marketing fosters partnerships with affiliates, creating mutually beneficial relationships that can lead to long-term collaborations and business growth.

For Affiliate Marketers

• Low Risk, High Reward: Affiliates do not have to invest in creating their own products or services, reducing financial risk, while still having the potential to earn significant commissions through successful promotions;
  
  
• Scalable Earning Potential: Affiliates can scale their earning potential by growing their audience, optimizing their promotional strategies, and increasing their conversion rates over time;
  
  
• Access to Marketing Resources: Affiliates often receive access to marketing resources, such as promotional materials, tracking tools, and support from advertisers, to help optimize their marketing efforts;
  
  
• Flexible Partnerships: Affiliates can choose partners and products that fit their goals, interests and audience, enabling more effective collaboration;
  
  
• Short-Term and Long-Term Collaborations: Webmasters can receive both immediate payments for referred traffic and sales and long-term commissions from repeat purchases or subscriptions.

Top Affiliate Marketing Networks

There are some of the top affiliate marketing networks known for their reliability, wide range of offers, and user-friendly interfaces:

The full list of the best CPA affiliate networks you are free to join is gathered on AllCPANetworks. Also there are affiliate platforms divided by verticals (Adult, Dating, Gambling, Betting, Nutra/Health, Finance, etc.), commission types (CPA, CPL, CPS, CPI, etc.), payment frequency (daily, weekly, etc.), as well as affiliate programs and many other materials for marketers and advertisers.

What is Network Marketing?

Network marketing is a business model in which independent representatives promote and sell a company’s products directly to consumers, typically leveraging personal networks. Often referred to as multi-level marketing (MLM), this approach allows participants to recruit others into the business. The recruits, known as the “downline,” may also bring in new participants, creating multiple levels of distributors.

Key elements of network marketing involve:

• Product Sales: Distributors directly sell products or services to customers, typically using one-on-one interactions, online platforms, or social networks;
  
  
• Recruitment: In addition to selling products, distributors are encouraged to invite others to join the business. As they bring in new recruits, they expand their downline, creating a larger team to help increase overall sales;
  
  
• Earnings and Commissions: Distributors earn income not only through personal sales but also by receiving a commission from the sales made by their downline. Additional bonuses or incentives are often available for reaching sales milestones or recruiting a certain number of individuals.

Pros and Cons of Network Marketing

Benefits of network marketing are:

• Lower initial investment than starting a traditional business;
• Flexible working hours and the opportunity to build a residual income;
• Potential for rapid growth if the distributor successfully recruits and manages a team.

Challenges in Network Marketing:

• Requires strong sales and recruitment skills to build and maintain a network;
• Often viewed negatively because of its association with pyramid schemes;
• High attrition rates, as many new recruits may leave due to difficulties in sustaining growth.

Overall, network marketing can be an effective business model for individuals willing to put in the effort to sell and recruit. Success often hinges on the quality of the product and the strength of the distributor’s ability to grow their network and sustain sales momentum.

Network Marketing Companies

We’ve created a list of top 9 network marketing companies in 2024:

Key Difference between Affiliate and Network Marketing

Here’s a breakdown of the key distinctions between affiliate marketing vs network marketing, making it clear how these models differ in approach and structure:

Marketing Model

• Affiliate Marketing: This model revolves around promoting products or services via online platforms like websites, social media, or blogs. Affiliates earn commissions based on the sales or leads generated through their unique links. There’s no need to recruit others, and the income is tied solely to the affiliate’s individual performance;
  
  
• Network Marketing: This structure involves both selling products and recruiting others to join as distributors. Income comes not only from personal sales but also from a portion of the sales generated by recruits (downline), leading to a multi-level earning system.

Earning Potential

• Affiliate marketing offers a flexible income potential that is dependent on your dedication and the size of the target audience. Your specific earnings are determined by commission types, rates and affiliate marketing program terms. Consequently, expanding your audience results in increased sales and greater income;
  
  
• Network marketing can yield substantial earnings through effective recruiting and team development. However, it’s essential to be cautious of illicit pyramid schemes that pledge income solely through recruitment.

Marketing Approaches

• Within affiliate marketing, promotional avenues commonly encompass paid advertisements and organic content promotion via blogs and social networking sites;
  
  
• Strategies such as “word of mouth,” which is when people recommend products or services to each other, and referral marketing work well in network marketing.

Initial Costs

• Affiliate Marketing: Usually has minimal to no upfront costs, as affiliates can join programs for free or with a very small investment;
  
  
• Network Marketing: Typically requires a financial commitment, such as purchasing a starter kit or paying for membership. There may also be additional ongoing costs like buying inventory or attending training sessions.

Sales Responsibility

• Affiliate Marketing: Affiliates focus solely on generating traffic and sales for the company. They don’t manage inventory, shipping, or customer service — those tasks are handled by the company itself;
  
  
• Network Marketing: Distributors often handle product logistics, including inventory management and customer service, as they have a more direct role in the overall sales process.

Affiliate Marketing vs Network Marketing: Similarities

Affiliate marketing and network marketing share several similarities that highlight their common ground in the realm of marketing strategies.

Both these models necessitate active promotion of products or services on behalf of a business, aiming to boost sales through various marketing techniques. While the approaches may differ, the ultimate objective of driving sales growth remains consistent across both affiliate and network marketing.

Moreover, both forms of marketing heavily rely on individuals spreading the word about the products or services to their personal networks, leveraging the power of word-of-mouth marketing to secure recurring and new sales.

Additionally, a fundamental similarity lies in their commission-based structures, where marketers earn a commission for each successful sale they facilitate for their respective partners, underscoring a shared incentive structure aimed at driving results and rewarding performance.

Veranika Minina

Veranika Minina is a fan of affiliate marketing. Veranika's articles are carefully crafted to simplify complex concepts, making them accessible to beginners while also offering fresh perspectives about CPA-networks for experienced marketers. Whether you're a beginner or a seasoned marketer, Veranika's writings are sure to inspire, educate, and motivate, guiding you towards a profitable affiliate marketing journey.