What Is Network Marketing?

Network marketing is, at it’s core, just affiliate marketing with a residual income compensation and re-seller option.  That’s all.

So what’s affiliate marketing?

Affiliate marketing is just selling something that you don’t personally own for money.  Let’s say you’re a real Mac fanboy.  Let’s say you want to make money promoting Mac.  An affiliate program allows you do to be paid when you give them exposure, and that exposure results in business.

Easy concept, right?

You like something.  You promote it.  People buy it.  You get paid.

This type of model is win-win.  The company gets to leverage other entrepreneur’s marketing efforts.  The entrepreneur gets to make money by simply marketing – little-to-no fulfillment cost, headache, customer support, etc.

Affiliate programs have been around since the dawn of man.  They are not new, novel, or remarkable in their structure.  The difference in a good program and a bad one is:

Terms

Payout

Product

For terms, we are talking about how the parent company treats their affiliates.  What do they provide for support?  How committed are they to helping their affiliates succeed?  What tools and training do they provide?

For payout, we’re talking monies.  How much?  What percentage?  For how long?  Some programs pay out for an initial sale, and that’s it.  Some pay out for the life of the customer.  Some pay out low percentages (we consider anything below 15% to be low).  Some pay out high percentages (we consider anything above 50% to be high).

For product, we are talking about what they actually provide you to sale.  Do they have multiple products?  One single product?  How good is it?  Doesn’t do any good to sling a crappy product that gets refunds/chargebacks.

We don’t like the word “expert”, but we do have a fair amount of experience in affiliate marketing, and we earn a good chunk of change every month in affiliate commissions.  We categorize two types of affiliates that exist:

Network Affiliates

Direct Affiliates

Here’s the breakdown:


Network Affiliates

These are people that take offers that are compiled in a network, and promote them.  This is pretty basic – you sign up for a network, pick some offers, and start sending traffic to them.  If people take the required action, you make money.

Some networks require that you have a sale generated.  Some networks just want a lead.  Some networks want a zip code.  Whatever it is, you target the traffic, and make money when the traffic takes the desired actions.

Some decent networks are:

Neverblue Ads

Copeac

Max Bounty

Clickbooth

The big thing with a network is finding an Affiliate Manager that will help you out.  Many are completely useless.  Some are worth their weight in gold.   They will tell you what’s converting, what’s not.  They may well lie to you.  It’s a fact – affiliate marketing is dirty.  Finding people you can trust in business is key, so if you want to succeed in this environment, build good relationships.

So the way this works is that you sign up – they ask you what traffic you have.  If you have no traffic, then you really don’t bring anything interesting to them.  If you’re brand new to affiliate marketing, work on building traffic first (diet traffic, business opportunity traffic, travel, anti-aging, whatever).

The key is choosing an offer (or group of offers) and a traffic channel (PPC, SEO, Facebook, whatever) and make it work.  Many, many affiliates throw some traffic at an offer, don’t make money immediately, then try something else.  They burn their budgets, and go home broke.  The thing is, nearly any offer will work on any traffic channel, and nearly every offer WILL NOT WORK AT FIRST.  We have never had an out-of-the-box winner.  You have to work with it – test your landing pages, bids, presells, etc.


Direct Affiliates

These are affiliates that partner directly with a company or product/service provider.  They don’t use a network as a go-between.  They find a specific product or service, promote it directly with the company, and work with the company to do so.

With network affiliates, they typically specialize in a type of traffic, and throw offers in front of it.  With direct affiliates, they choose an offer, then build traffic around it.   There’s always more than one way to get it done, but that’s the path that we’ve used and it’s worked well.

Personally, we prefer the direct-affiliate approach. It’s where we’ve had more success, and we like the model better.

Now what does any of this have to do with network marketing?

Network marketing is just affiliate marketing with two twists – a resellers option, and a residual income compensation plan.

With a residual income comp plan, it means that you get paid tomorrow on the work you do today.  It should be viewed as a long-term investment.  Most affiliate programs are set up to pay out a commission on a sale. Network companies take those commissions, cut them down and distribute them over longer timelines.  That’s the first twist.

The second is the reseller option. You can recruit resellers, which means you can build a people-based sales channel and be paid on their work.  Compensation varies depending on company, but they typically reward the acquisition of both product users and resellers (business builders as they are called).

So what kind of business do you want?

There’s no wrong answer to this question.  The challenge is that some people get involved with a specific type of program or company, and never evaluate their needs.  Do you need money like yesterday?  Well, a residual income compensation plan probably isn’t the best choice for you, as it’s set up to be a longer-term investment.  If you need money starting yesterday, I suggest you read this post on how to make legitimate money online {fast, free, and fun}.

Do you want a business where you get to interact with others?  Don’t choose an affiliate program, where all you do is hide behind your computer and type all day.  Do you hate interacting and communicating with other people?  Don’t choose network marketing, as you MUST communicate with people on a regular basis verbally and in written form to succeed in that line of work.


The Game Plan

After you decide which type of business you want to promote, the next step is to make it happen.  The steps look slightly different depending on which approach you take.

Affiliate Marketing (Network)

Find a network, choose an offer, and start giving it traffic.  Test, optimize creatives.  Make money.   Pester your affiliate manager (they love it, really).  Ask questions all the time.

Affiliate Marketing (Direct)

This begins with finding a program to promote.  This is easy.  If you already have something that you use and love, call ’em up and ask about their affiliate program (many companies have them in place).  If they don’t, tell them to get one.  Strike up a deal.  We do this – if they are a newer company, they may not have an affiliate option, and you’ll get to set your own terms.  Not a bid situation :)

Still having trouble?  Find a niche you have an interest in (diet, business opportunity, software, exercise equipment, whatever).  Do a google search for:

“keyword related to niche” “affiliate login”

So let’s say you wanted to promote some exercise equipment.  Here’s how it would look:

Exercise Equipment SERPS

Now let’s say you wanted to promote organic milk.  Here it is:

Organice Milk SERPSDid you eat some fungus that finally helped with that Crohn’s disease?  Great – promote some fungus:

Fungus SERPS

You can modify the search so that it just looks up “affiliate” in lieu of “affiliate login”, but you get the idea.  There are plenty of ways to find products for any niche (no matter how bizarre or unusual).


Network Marketing

If you want to roll with network marketing, it’s easy to find a company.  Check out NPROS.com, as they have a huge master list of network marketing companies and their descriptions.

Still not sure?  Check out this teleseminar we did on choosing the right networking gig.

We get a lot of questions from people asking why we don’t talk more about network marketing specifically.  The reason is that to become a great network marketer, you must be a great marketer.  Companies come and go.  Opportunities come and go.  But being a great marketer means you have a skill-set that will serve you in up and down economies, and regardless of what individual business opportunities and their leadership teams choose to do.  A skill-set is what is important – and it’s the only security in a very insecure world.  It pays you regardless of what company, opportunity, or service you are promoting. It serves you in up and down economies.  And NOBODY can take it away from you :)

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