Affiliate Marketing vs Network Marketing: Which is Better?

Veranika Minina 24 September 2024 Guide
Image

Table of contents:

  1. What is Affiliate Marketing?
  2. How Do Affiliate Marketers Get Paid?
  3. Benefits of Affiliate Marketing
  4. Top Affiliate Marketing Networks
  5. What is Network Marketing?
  6. Pros and Cons of Network Marketing
  7. Network Marketing Companies
  8. Key Difference between Affiliate and Network Marketing
  9. Affiliate Marketing vs Network Marketing: Similarities

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 does affiliate marketing work?

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:

NetworkVerticalOffers NumberMin Payout
YellanaGambling
Betting
Software
Apps
700+$100
CrakRevenueAdult
Dating
Apps
Mobile
454$100
MobideaAdult
Dating
Games
Mobile
Sweepstakes
1,500$50
CPA.houseDating
Gambling
Mobile
Nutra/Health
Software
Sweepstakes
4,100$50
ClickDealerDating
eCommerce
Gambling
Games
Mobile
Nutra/Health
Software
Utilities
Casino
14,475$500
Dr.cashNutra/Health2.670$50
LGamingBetting
Crypto
Gambling
Casino
1,200$100
TerraLeadsNutra/Health1,200$50
MyLeadAdult
Dating
eCommerce
Finance
Games
Nutra/Health
Sweepstakes
5,282$20

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:

CompanyCounrtyYear of FoundationRevenue (2023) in Million USD
AmwayUSA19597,700
GS PartnersComoros2020370
Vida DivinaUSA2016700
VorwerkGermany18834,200
Utility WarehouseUK20022,990
BelcorpPeru1968780
Natura & CoBrazil19695,300
SunhopeChina19931,200
AtomySouth Korea20091,710

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.

Conclusion

Talking about affiliate marketing vs network marketing, ultimately you have to choose depending on individual preferences, goals and from the strengths. Affiliate marketing shines in its simplicity and scalability, offering individuals the opportunity to earn commissions by promoting offers without the need for extensive network building.

On the other hand, network marketing thrives on building relationships and fostering teams to drive sales and commission earnings.

The choice between affiliate marketing and mlm hinges on personal inclinations, skill sets, and long-term objectives in the dynamic world of digital marketing and entrepreneurship.

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.
CPA Networks Review

Yellana

4.95

Yellana was founded in 2022. Despite the company’s age, it already shows great results: 500+ offe...

read more

Offer.one

4.95

In 2023, one more CPA network in affiliate marketing was created. We suggest you get acquainted w...

read more

CpaRoll

4.94

CpaRoll is a prominent affiliate network that has gained recognition for its commitment to establ...

read more

Trafee

4.94

Let’s take a look at the Trafee CPA network. In this Trafee review you’ll find the key feat...

read more

RevenueLab

4.94

iGaming is one of the thriving niches that holds a special place in affiliate marketing. In this ...

read more

CPA.house

4.94

In affiliate marketing, finding the right CPA network can make all the difference in your success...

read more

Mobidea

4.93

In affiliate marketing, Mobidea is well-known as a mobile CPA and ad network. As a push notificat...

read more

Meta CPA

4.93

In the world of Nutra/Health CPA networks, Meta CPA plays a crucial role. It’s an affiliate netwo...

read more

MaxBounty

4.93

MaxBounty is one of the oldest performance-based affiliate networks. The company specializes in m...

read more

Huffson Group

4.92

Huffson Group is an iGaming CPA network. This platform is a good choice for experienced affiliate...

read more

CrakRevenue

4.92

CrakRevenue stands as a sample of efficiency among adult CPA networks. Its history began in 2010,...

read more

Adsterra

4.90

Adsterra is an advertising and CPA affiliate network which was created by marketers and webmaster...

read more

BongaCash

4.89

BongaCash is an affiliate program that operates in the Adult vertical. Also, it’s a part of one o...

read more

Perform[cb]

4.88

Perform[cb] is considered as # 1 CPA Network worldwide and Affiliate Marketing agency, both focus...

read more

ClickDealer

4.87

ClickDealer is a performance marketing agency. Started from a small team of marketers, the compan...

read more

Dr.cash

4.86

If you are interested in Nutra offers, Dr.cash is one of the best choices. It is a CPA network wh...

read more

LGaming

4.86

LGaming has been a trusted affiliate network in the market since 2022. It suggests a large number...

read more

AdCombo

4.85

AdCombo is an attractive CPA network for affiliates and advertisers. The company strives to chang...

read more

TerraLeads

4.83

TerraLeads is the world’s first CPA Hub. Thus, the company brings affiliate marketing to a ...

read more

MyLead

4.81

Welcome to the MyLead review! This is a global affiliate network and one of the leaders of affili...

read more

GG.Agency

4.80

Golden Goose is a CPA network that offers to earn on mobile traffic from different countries. The...

read more

CPAlead

4.75

CPAlead review is a great opportunity to delve deeper in the essence of the affiliate network. Le...

read more