The new internet marketer is always confused when he encounters the terms affiliate marketing and network marketing and finds it difficult to decide which one between the two he /she should pursue. This article elaborates the differences between the two and shows advantages and disadvantages of each. At the end of the read you should be able to decide which one suits you best.
Advantages And Disadvantages Of Affiliate Marketing
Affiliate marketing is a type of marketing where the marketer is affiliated to a company and earns income through commissions whenever he gets a sale through his own marketing efforts. There are four core players in this industry: the merchant or the retailer who owns the product, the sponsoring company which handles the sales and shipping of the products, the affiliate who makes the sales and the customer who purchases the products.
The affiliate marketer uses different marketing methods in his efforts to get sales. These include search engine optimization, paid search engine marketing (PPC), social media marketing, email marketing, product reviews and content marketing.
The advantages of affiliate marketing include:
- You don’t have to build a downline i.e. no recruiting
- You don’t have to commit to a company and make monthly purchases yourself. This means you can start promoting products and earn commissions with little or no startup costs.
The disadvantages of affiliate marketing
- You earn income only when you make a transaction. The more you sell the more are your chances of earning income online. Because you work on one time transactions, every month you start a new income cycle. In affiliate marketing, the compensation plan is purely performance based. It requires an ongoing effort in order to continue earning income.
- You must build a list of people who subscribe to your newsletter or email updates. The bigger your list, the more income you can earn online. If you don’t have a list, there is little or no chance at all of making money online.
Network Marketing: The advantages And Disadvantages
Network marketing is a business model that offers passive income, both residual and leveraged income. You get residual income by doing work once and get paid for a long time after for your one time performance. Leveraged income is obtained through the efforts of people you recruited, it can be up to several levels down or unlimited levels.
- You can earn income from work you did once allowing you to get paid even after a period of inactivity.
- You earn income from the efforts of your downline and to some levels down in the hierarchy.
- You can earn without building a list of your own.
- You must learn and apply traffic and lead generation techniques to recruit and build a downline.
- You may need to purchase a starter pack and make monthly purchases.
In this topic we have seen the advantages and disadvantages of affiliate marketing and network marketing. The topic should have helped to wave out the dilemma of which should be your choice. In another topic you will get networking marketing business ideas and you can get more on affiliate marketing in the topic “Affiliate Marketing For Beginners“.
Which one do you prefer, Affiliate Marketing or Network Marketing? Do you have more reasons for your preference other than those listed in this topic? Feel free to share.