Are Network Marketing and Affiliate Marketing Crossing Paths or is a New Evolution of Commission Based Selling Taking Place Before Our Very Eyes?
Posted by Marty Dickinson on Jul 23, 2010
I’ve been a shameless Internet affiliate marketer for about 12 years now. About 1/3 of my income is directly related to about 10 or so of those affiliate programs. I use the word shameless because I know a lot of people out there are against any “sales” of any kind. And, if someone is to get a “commission” for their sales efforts, then woohaa! Look out! As if sales is such a bad thing.
I LOVE finding things of great value that make our lives better and then “recommending” them to others. To me that’s not really selling. It’s more of a sharing than anything.
Here’s how it works. Typically, a client will ask me a question and if I don’t offer the service or have an affiliate product to offer them, I’ll go find one, evaluate it and recommend it to them. Of course, when I recommend an affiliate product, I get a commission for the sale.
One of the first questions I was asked by a client that got me to seek affiliate products, to use as an example, was “Where do you recommend I register a domain name?” Gosh, that was back in…like…1999 or something. So, I went out researching every domain registrar I could find and found one that had everything I expected as well as an affiliate program. You can read more about that on this post about what you should look for in a domain name registration system. And, you can also read a post about the same system I use which I believe is still the best domain name affiliate program around.
I use that example because affiliate marketing is nothing new. I sure don’t want to be a domain name registrar company and have to buy whatever servers they do and manage all those legal aspects of the business, so I found a company that offers that service and recommend it to others. I have literally hundreds of referrers with domain names registered in that system. And, every time they renew year after year, I get a little commission added to the bank. Simple concept.
Today I promote 32 affiliate products on more than 50 of my own websites. I used to say “over 100″ but since Amazon doesn’t pay commissions for referred products to Colorado associates anymore, I’ve completely dumped Amazon products from both a buying and promoting perspective and am replacing those products with other vendors.
But, something else has crept back into my life. And, I’m not quite sure what to call it yet. It’s sort of network marketing, but not exactly. It’s got lots of pieces of affiliate marketing, but it’s more than that. So, less than true network marketing but more than affiliate marketing. Just brainstorming this as I write, but it has a viral element to it, but without the pressure of in-home meetings commonly found when people are selling soap or vitamin drinks. Maybe, there’s a new word to emerge for it, like ViralTeaming or something.
Mann, I just can’t put my finger on it.
Can you help?
Here’s the situation….See if you can help me define this new phrase.>
Traditional network marketing to me has only a few positives and a whole string of perceived negatives. Here’s what we think as a society about network marketing:
Negatives of Network Marketing:
- No one is thinking “Oh I need one of those” before you approach them with the sales pitch, so there is immediately a defensive opposition to the sales process
- The products are usually not that good anyway (my experience anyway)
- High initiation prices to get started promoting
- Inflated prices for inferior products
- Locked into auto-ship monthly payments
- Hard to stop billing once it’s started
- Huge amounts of time spent in-person with prospects convincing them to buy
- Expected to go to family and friends first so family and friends avoid you
- We all just hate that whole industry!
From what people who are successful in traditional network marketing have told me, I really only see a few positives to “traditional” network marketing as follows:
- A proven pool of buyers when you take on another network marketing product
- Lots of recognition on stage at seminars once you’ve become successful
- Don’t need a lot of education to start selling
Tell me if there are more benefits to traditional network marketing, ’cause I just don’t see it….
Affiliate marketing has lots of positives, though, usually including:
- Products that are in direct need by your audience because you are targeting an audience that either already uses related products you offer or are at least involved in a related industry
- Your family and friends probably would have no use for your affiliate products because most of your family and friends have nothing to do with your business or industry you’re involved with, so you don’t even approach them with what you’re offering to others
- Don’t have to buy anything to start promoting something
- Commissions are paid monthly direct into my bank account
- Easy to track how many visitors you’ve referred and how many sales were as a result
- Easy to stop promoting if the product just turns out to be a dog
- Requires no pre-existing “network” to start making money
But, affiliate marketing has its negatives too, like:
- Most affiliate offers are Tier 1, which means you only get paid commission on sales that start from your referral. If that referral refers to someone else, you don’t get commission.
- Affiliate programs by law cannot exceed 2-Tier, which prevents you from getting any further money than those two levels.
- Little or no support from the product owner. “Most” affiliate programs I’ve worked with give you little to no support. You might get some banners to display on your website, but that’s about it.
- The sales and lead tracking systems in affiliate marketing are produced by Internet marketers instead of what programmers would want to create. Lots of testing goes into the sales process and checkout process so that by the time you are promoting the site as an affiliate marketer, the content converts the most possible prospects.
So, what’s my point? What’s so NEW about today’s affiliate/network marketing offers? I’ve come across two over the past couple of weeks. Today, I’ll use the example of one of them to see if I can show you how the industry is changing.
My example is a company in the food industry that has a sort of club membership where you get $200 worth of groceries plus $300 commission for every six people you bring into the club. There is a one-time, up-front cost of $200 for you to join (plus a once per year payment of $10 to get the company website in your name so you can be tracked for your referrals), but you can spend that entire $200 shopping for groceries! So, you don’t lose anything out of pocket (more like an affiliate program). NO RISK!
At the same time, you don’t personally have to convince all 6 people to join. You just focus on “2″ new members. When those two members get two others enrolled, YOU get a commission check for $300 and a voucher for $200 more in groceries.
And, you can use that voucher at any WalMart or Sams club.
You’re already going to spend money on groceries this month right? Well, unless maybe you’re a naturist living off your own garden! So, why not buy your groceries at WalMart? At least the ones you prefer to get at WalMart and then use your commission check to go to King Soopers or Safeway or whatever other place you want to get the other stuff.
The company calls this a “cycle” where you have enrolled your team of six. Once that happens, you start another cycle and go find two more people to enroll.
I was told yesterday (July 22) of a member who had “cycled” 12 times. That means he’s received a total of $2400 in gift cards toward groceries at WalMart and a check for $3600 in commissions to use anywhere. Oh, and by the way, he just entered as a new member in June!
Oh, and remember the two people you brought in originally? As their two new members find two new members, THEY will get their $300 commission and $200 grocery voucher too!
It’s entirely possible that you could pay $200 once and NEVER have to pay out of pocket again for your groceries! This is the network marketing part of it, but not really…and yet all at the same time. Why? Because the program goes beyond 2-tier but yet does NOT carry with it monthly fees like the typical auto-ship program. You just go find more people to “share what you’ve discovered!” So it’s really more like an affiliate program like I described earlier. Confusing!
But, do you see the “viral” component here and why I’m confused what to call it? I mean, once you find something that has no risk because you get to CHOOSE what you want to buy with what you’ve already spent on the initiation fee, and you get to spend the money at a place that practically everyone shops at anyway (WalMart), and there’s the potential of never having to spend another dime on groceries, and you get such huge payouts of money (paid daily and weekly into your bank account), doesn’t that sound like something you would just want to blog about and write articles about and tell everyone you know–clients, prospects, family friends alike?
By now, you’re probably wanting to know what this product is, right? Exactly! And, I want to tell you! Not because I’ll get rich off you (even though I might, ha), but because it’s a really good program that has come along in a crappy economy. And, just as I’ve heard about it, I’m doing my part to take it viral. But, yet, I’m recommending it to you to check out like I would any affiliate program.
See my struggle? I just don’t know what to call something that includes all the positive components of affiliate marketing AND network marketing while avoiding the negatives of both at the same time, PLUS the no-risk element and throw in the desire to take it viral to the point where I want to tell everyone about it!
Maybe VirWork or WorldNet Referring or something like that. I don’t know. I’ll think of a term for it eventually that combines the two. But, whatever you want to call it, there is definitely a new evolution happening where affiliate programs are using network marketing aspects and network marketing offers coming out are doing away with old-school network marketing practices and adapting their systems to what DOES work with affiliate marketing. Whew! What a mouthful!
Go watch the video to see how this program works and if you do sign-up through my website, you will be added to my Go Cash Flow group where I will personally help you get started by phone and email to get your first cycle within one week. That’s like me personally handing you $500 on a silver platter! And, it doesn’t matter where you are in the country.
While you’re watching, think of how YOU can apply this program to your own life and business. Maybe your church or charity is floundering with lower contributions and has run out of ideas for generating funding.
Maybe you know of a child with a disabling disease and the family could use some community charity to help them through a tough time. Maybe you’ve been out of work for the past year and the creditors are calling you daily and you don’t know where your next bottle of milk is going to come from. I think we all know the answer to that, right?!
Maybe you can help your clients fund their own use of your professional services by giving them a discount or credits based on the number of cycles they complete per month or quarter.
Who knows? The possibilities are endless. The vehicle has just now arrived. Be creative! And, if you happen to come up with a word or phrase to call this new evolution of commissions-based selling, let me know in comments.
If nothing else, realize that traditions are changing. People are changing. Offers are changing. How does your business need to change? That’s another topic for Website Waves coming soon!