What is the difference between affiliate marketing and multi-level marketing?

This article will clarify any mixup that you have had about affiliate marketing, Network Marketing, and Multi-level Marketing.

The major difference between Affiliate marketing and Multilevel marketing is that affiliate marketing is simply promoting a product for a direct commission, while multilevel is promoting a network or product in a multilevel reward system, in such a way that the marketer earns a share of the reward accumulated by referred marketers.

And while it may mean a lot of things to a lot of people, I have decided to take the pain to get the facts right about the differences and similarities between affiliate marketing, network marketing, and Multilevel Marketing, so you don't run with the wrong facts about these digital marketing terms, misusing it like a lot of people out there are already doing.

To make it very easy to understand these three terms, I have explained aspects of each of these terms in a grouped, and orderly manner, so that starting from the first paragraph, you will already have an Idea of the similarities and differences between affiliate marketing, Network Marketing, and Multi Level Marketing.

But Just In case, I have also included a table to further compare and contrast these digital marketing terminologies.

What is affiliate marketing?

Affiliate marketing already has a million definitions as it has grown in popularity in the past couple of years, but here is me adding my own simple and short definition to the list.

Affiliate marketing is simply the act of promoting other people's products through different media, and getting a commission for each and every sale made as a result of the promo by the affiliate.

Affiliate Marketing is usually done online, through a uniquely assigned link known as an affiliate link.
Apart from the online space, affiliate marketing can be done offline through uniquely assigned promo codes, tags, and coupons.

The purpose of assigning an affiliate link, promo code, tags, and coupons to an affiliate, is to track the sales they make so that they can be given their commissions accordingly.
Now that you know my definition of affiliate marketing, let's quickly take a look at my definition of network marketing below.

What is network marketing?

Network marketing is the act of promoting a “network” and getting a reward for each new member that joins the “network” because of your promo.
Network, here does not refer to your network provider, rather it is referring to a group of interconnected individuals with a common goal.

In a network marketing system, the reward is usually in form of cash, Incentives, or a form of benefit that the network members have placed a high value on.

Just like affiliate marketing, each member is usually assigned their own invitation link (if it is based online), or a unique invitation code if it is based offline. This unique code or link is what will be used to track any new member that joins as a result of the promo of any of the existing members. This is used to allocate their rewards accordingly.

Now that you know the definitions of both affiliate marketing and network marketing there is another type of marketing known as Multilevel marketing, and it takes different forms that cut across both affiliate marketing and network marketing, that is why I will start by defining network marketing below.

What is multi-level marketing?

Multi-level marketing has always been used interchangeably with network marketing, but in real life, they are two totally different topics.

Multilevel marketing is any type of marketing in which a marketer can invite another marketer and get a commission or reward for the activities of the person that they have invited into the system.

So multi-level marketing can either be based on affiliate marketing, where you get a reward for inviting more affiliate marketers and get a share of the commission they generate when they make sales,

or network marketing where you invite more network marketers and get a share of the reward they get for inviting new members into the network marketing system.

So if you have been reading up to this point you must have observed that multi-level marketing can exist in both the affiliate marketing space and the network marketing space.

And even though I have already technically defined the two types of multilevel marketing in the paragraphs above, I will do it distinctly for the benefit of readers who won't be patient enough to read line by line.
So, below are the types of multi-level marketing:

Types of multi-level marketing

1. Tier 1 Multi-level marketing:
   This is a type of multilevel marketing where marketers earn rewards from their invitee's activities only.
   This means that they have a share in all the Commissions or rewards that their direct invitees make from their invitations and sales.
   
2. Tier 2 Multi-level marketing:
   This is a type of multilevel marketing where marketers earn rewards from the activities of their invitees and the invitees of their invitees.
   This means that they do not only earn from their direct invitees, but also from the direct invitees of their invitees.

The tier in multilevel marketing ranges from tier 1 up to even tier 10, but am sure you already know how the rest works based on the explanations of tier 1 and tier 2 multilevel marketing. And with that out of the way, below are the definitions of multilevel marketing based on the two types of marketing in comparison.

What is multi-level affiliate marketing?

Multi-level affiliate marketing as the name implies is a type of affiliate marketing where you earn a commission from the sales you made, and from the sales made by other affiliate marketers that joined the affiliate program using your invite links.

What is multi-level Network marketing?

Muti-level Network Marketing, on the other hand, is a type of network marketing where members earn a reward from the activities of their invitees and the invitees of their invitees.

What are the types of affiliate marketing

Affiliate marketing can be classified based on many criteria, these criteria include:

Based on the level of involvement

Based on the level of involvement, we have three major types of affiliate marketing:

1. Direct Affiliate Marketing:
   This is a type of affiliate marketing where the affiliates are dealing directly with the product owners, promotions are done based on agreed terms and conditions, and payments are made based on negotiated payment modes. This kind of affiliate marketing is flexible and gives room for more negotiations. Payments are done directly from product owners to affiliates. A good example of direct affiliate marketing is Fiverr affiliate marketing.
   
2. Indirect Affiliate Marketing:
   This is a type of affiliate marketing where the affiliate is not dealing directly with the product owners, rather they access the affiliate programs through third-party platforms, and are paid by the third-party platforms, and not directly by the product owners.
   
   Good example of indirect affiliate marketing is Clickbank affiliate marketing, Jvzoo affiliate marketing, and impact radius affiliate marketing. Here the affiliate can find different companies listed for promotion, and their payment is usually not issued directly by the product owners, rather it goes through the third-party platform.

Based on the mode of conversion

Based on conversion, there are 2 types of affiliate marketing:

1. The commission per sale affiliate marketing(CPS):
   In this type of affiliate marketing, affiliates are given a commission for each sale that they make as a result of promoting a product. A good example is amazon associates.
   
2. The commission per action affiliate marketing(CPA):
   In this type of affiliate marketing, the affiliate does not necessarily have to make a sale, they get a commission whenever a customer takes a specified action through their affiliate link.
   The said action could be anything from clicking a link, submitting an email address, or even leaving a comment or a review on a product. A good example is Maxbounty affiliates

Based on the mode of payment

There are 2 types of affiliate marketing based on the mode of payment:

1. Recurring affiliate Marketing:
   In this type of affiliate marketing, the affiliate marketer is only interested in promoting products that will give a recurring commission for each successful sale.
   
2. Bounty affiliate marketing:
   In this type of affiliate marketing, the affiliate is given an insane amount as a one-time payment for each successful sale made as a result of their promo.

What are the types of network marketing

Network marketing can be classified based on the Tiers. These Tiers refer to the levels through which a network marketer can receive their rewards. The Tiers are as follows:

1. Tier 1 Network marketing:
   In this type of network marketing, the members receive rewards for direct referrals or invitations, hence the network marketer only receives rewards for direct invites.
2. Tier2 Network marketing:
   In this type of network marketing, the network marketer receives rewards when a person joins the network as a result of their promo, and also when their invited member invites another person to join the network. Hence the network marketer shares in the reward of all his invitee invitees.
   
3. Multi-Tier or Multi-level network marketing:
   Multi-level network marketing is when the rewards can be shared down to the third level, meaning that the marketer receives rewards from the invitations made by his invitee invitees, down to any level.

What are the types of multi-level marketing?

There are two types of Multilevel Marketing, and it's based on the types of marketing listed below:

1. Multi-level affiliate marketing:
   This is a type of affiliate marketing with a multi-level reward system
2. Multilevel Network Marketing:
   This is a type of network marketing with a multi-level reward system.

Which type of affiliate marketing is best?

The best type of affiliate marketing is direct affiliate marketing with a recurring commission-based reward system.

Which type of network marketing is best?

The best type of network marketing is multi-level network marketing.

Which type of multi-level marketing is best?

The best type of multi-level marketing is multi-level affiliate marketing.

What are the benefits of affiliate marketing?

The benefit of affiliate marketing is numerous, and I have listed them below:

1. Affiliate marketing doesn't require any capital to start making money, since all you have to do is promote someone else's product on various free traffic platforms like Facebook, Youtube, and forums.
2. Affiliate marketing is scalable, meaning that one can start small and grow into a big brand in the digital marketing space since there is no limit to how many products one can promote.
3. Affiliate marketers don't run out of customers, due to the flexible nature of the business model.
4. The fulfillment of purchases is not handled by the affiliates.

What are the benefits of network marketing?

1. In network Marketing, the power of numbers can be used to an advantage.
2. In network marketing, if your downlines are very active you can generate passive income from their activities
3. In network marketing, marketers can jointly achieve great things
4. Network marketing is ideal for web 3.0 projects like the metaverse and shit coin revolution.

Is affiliate marketing a pyramid scheme?

No, Affiliate marketing is not a pyramid scheme every affiliate gets an equal opportunity and equal commissions based on the terms and conditions of the company they are working with.

Is Network Marketing a pyramid scheme?

95 percent of the time network marketing is indeed a pyramid scheme.

Which is better network marketing or affiliate marketing?

Affiliate Marketing is by far a better business model compared to network marketing.

Final thoughts

Affiliate marketing and network marketing can fall into the category of multilevel marketing, but affiliate marketing is always the better choice if you are a money-minded person and an introvert like myself.

The major difference between Affiliate marketing and Multilevel marketing is that affiliate marketing is simply promoting a product for a direct commission, while multilevel is promoting a network or product in a multilevel reward system, in such a way that the marketer earns a share of the reward accumulated by referred marketers.

Below is a table that illustrates the differences between affiliate marketing, network marketing, and multilevel marketing: