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Internet Articles
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Affiliate Marketing Versus Network Marketing (MLM): Income formula Revealed!
By Evelyn Lim
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The difference is best explained in terms of the way compensation is structured to pay for performance. Because of the many hybrid forms of compensation payments available now on the internet, to a newbie scouting for business opportunities, it is easy to get confused over the many terms and definitions used. In evaluating compensation planns, it is essential to understand the subtle difference between the two models. You want to find out?which model yields more income? Design Agency Manchester The old website that was created by a Design Agency Manchester has served you proud for the past 2 years and when you first started up in business it was just what you needed to give you an immediate online presence. That was then and this is now, a few years down the line, and the time is right to enhance the current site to reflect your business growth. As the business has developed you are receiving more telephone calls from potential customers asking you to provide them with further details about the services and goods that you supply. This is one area where the website could work on your behalf as a few additional pages could be added with that contained useful information. Therefore you have been in touch with the Design Agency Manchester that helped to create your original site. They did a fabulous job first time around and people always give you positive comments about your site. With this in mind you have asked the Design Agency Manchester to provide you with a larger package. They`ll be designing a new 6-10 page website that will provide your customers of old and new with far greater detail about your firm and the products and services that it provides. What is affiliate marketing? Affiliate marketing is usually done online. In its simplest form, affiliate marketers are compensated on a one time transaction only. Unlike products offered in a MLM business, affiliate products are often ones that a customer would only need to purchase one time. Thus, the more the affiliate marketer sell, the more they make. This is quite akin to direct sales albeit made via the internet. Affiliate marketing has a compensation plan based on performance measures. For instance, if the affiliate marketer is successful in the form of sales, clicks, registrations, etc, he/she gets rewarded. The desired action as a means of compensation is already pre-agreed upon by the affiliate merchant and him/her. In a short space of time, the affiliate marketing model has also evolved to a 2 level (or in some cases, up to 5 levels) compensation plan. In the popular 2-tier version, for instance, you (as an affiliate of a particular e-book merchant) will earn commission when you sell a book to person A and if person A signs up to be an affiliate and manages to sell to person A1, you get compensated too, in addition to person A. Let?s now go on to talk about what network marketing is. In the network marketing model, the compensation plan works in a similar fashion, except that compensation by the sponsoring company can be paid up to several, several or unlimited levels. The number of levels and restrictions in terms of payout is very much dependent on the arrangement offered. As arrangements can vary from one company to the next, this makes comparisons of the various compensation plans available out there difficult. So be sure to read all the fine print! At any level, a network marketer has the potential to earn a direct referral fee for directly recommending someone and a leverage fee when one of his/her ?downlines? is successful for referring friends to the same network. In the popular binary plan adopted by many network marketing companies, each person in the network has two ?legs? or ?downlines?. If more people get referred to the network, they automatically go below the ?legs?. Ongoing customer use is what creates the real residual income in network marketing. The MLM business can generate earnings for a very long time even after the initial years of hard work and investment. With a solid network, residual income is assured at each renewal period of a ?downline?. If the product or service involved in is one that has to be reordered at each renewal period, income should just keep coming in like clock work. How does the difference in affiliate marketing and network marketing translate into in terms of building your customer relationships and your earnings power? In the network marketing model, to ensure that your ?downlines? renew at each period, you must ensure that you build up a good relationship with them. It is essentially a people-build-people and a leader-build-leader business. The ability to generate huge sums of money is increased exponentially when the network grows. The potential to make huge sums of money is thus greater here if you can employ the efforts of others to help grow the business vis-à-vis the affiliate marketing model. In affiliate marketing, your earnings ability is limited by your own direct sales plus an additional of 1, 2 or up to 5 levels of leveraging efforts. Having described the above, it would seem that to maximise your income, it is best to join online network marketing programs as opposed to affiliate programs. Nope...I don`t think that`s really the case either. Affiliate marketing is best described as an entry to online network marketing. Affiliate products are easier to sell, likely to involve one rather than an array of products and therefore, less expensive. For instance, an e-book is likely to have an associated affiliate program while access to a membership site of digital products is more likely to pay for recurrent renewals of membership. In conclusion, there is always no harm in joining different programs whether affiliate or network marketing ones. Just be sure that you understand how you are paid and channel your efforts accordingly. Afterall, your goal is to build multiple sources of income. You have a choice to represent what or which combination of products/programs work best for yourself. 
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