Let’s start with affiliate marketing’s fundamentals. Affiliate programs enable people who aren’t affiliated with a firm to become independent sales representatives for that company and, more crucially, profit from the sales they make. For some reason, this conjures up images of a pyjama-clad webmaster attempting to integrate Amazon or eBay into their material. Affiliates are compensated based on their performance. They gain a share of the sale if they promote a product. If they promote signup, they get paid a fee based on a proportion of the new user’s estimated value.
Take, for example, Amazon and eBay. Affiliates who recommend a book on their blog can earn up to 8.5 per cent of the sale price. In the case of eBay, an affiliate whose actions result in new signup will be paid a set sum (based on volume) for that new user. They will also receive compensation from eBay for any action that the user performs on the site, such as bids, purchases, etc. Affiliates have complete control over how they drive traffic and whether or not they choose to stay active. Amazon, which runs one of the most popular applications, has a FAQ and a Performance Tips Section and a Discussion Board on their website. For example, the Performance Tips area provides tools for selecting products to advertise and links to websites that might help the affiliate learn more about best practices for driving traffic.
Amazon has its affiliate program, which means that anyone interested in promoting Amazon products must join up directly with the company. In contrast, other companies, such as eBay, use an affiliate network. The affiliate receives payment for revenue events whether working directly or through a network, but working through an affiliate network often comes with additional benefits, such as access to additional companies to promote, account managers to help with growth, and sometimes conferences put on by the network to bring affiliates together and share information. Attending the conference may be inexpensive, but becoming an affiliate is not.
Instead, smart organizations and networks use this commission-based, outsourced sales force in whatever way they can.
Affiliate marketing and network marketing have a lot in common. Quixtar (previously known as Amway) functions similarly to a decentralized Amazon and Commission Junction. Barnes & Noble, Circuit City, Blue Nile, Sony Style, 1800 Contacts, and FedEx Kinko’s, to name a few, have exclusive products (their version of thousands of food and health products) as well as relationships with more traditional brands, such as Barnes & Noble, Circuit City, Blue Nile, Sony Style, 1800 Contacts, and FedEx Kinko’s. Quixtar affiliates can market both Quixtar’s exclusive products and those from its “Affiliate Partners.”
One of the first distinctions is nomenclature. Quixtar refers to its partners as “independent business entrepreneurs.” We can already see Karl Rove at work. The independent business owner is just an “affiliate” when viewed through the eyes of an online marketer, especially one who is even somewhat involved with affiliate marketing. However, network marketing organizations reserve that name for Quixtar’s third-party partners, the “merchants” in the affiliate marketing equation. They want consumers to see the world in a certain way, one that avoids comparisons to affiliate marketing online.
When comparing joining Quixtar to advertise products to a company like Commission Junction, the true distinctions begin to surface. (Pretend that Commission Junction has a division that creates, manufactures, and distributes its goods and services for this review.) Individuals act as outsourced sales forces in both affiliate marketing and network marketing. Joining affiliate marketing is free. However, people who want to join Quixtar must pay money, ostensibly to start their own business. While affiliates and independent business owners, as they are known in the network marketing industry, have incentives connected to the amount of product they move, the way they do it vary dramatically.
Users who use affiliate marketing get money for their efforts, whether it’s driving purchases or signups. Users gain points first, then cash in network marketing. What they physically earn is determined by a complicated mechanism that considers how much stuff they move and how those goods travel within their mini-organization. The number of people in your network, i.e. how many people you sign up under you and how much product these people sell through their network, is central to network marketing. It’s like trying to make sense of the almost limitless reflections in two mirrors facing each other.
A quick recap: so far, we’ve seen that affiliate marketing and network marketing both rely on an outsourced, commission-only sales team to generate money, but they operate on opposing sides of the spectrum in terms of how they do it. Affiliate programs are free to join, but networking marketing companies like Quixtar are not. Both earn money through sales. However, affiliate marketing earns cash solely, whilst network marketing earns cash, but the amount does not depend on the product. In addition, affiliate marketing and network marketing differ in traffic dispersion and proximity of that traffic.
Affiliate marketers are largely concerned with the internet and, for the most part, with their ability to persuade individuals they don’t know to visit a merchant’s website via their link. Network marketing is the polar opposite of that. It’s all about the network, as the name suggests. Quixtar prohibits anything other than one-on-one selling and has structured their business to make it impossible for individuals who can move a large number of things online to do so. Quixtar not only emphasizes selling to your network but also encourage personal use, stating, “One key to your business success is to establish income as soon as possible.”
Converting your purchases to a business and building a customer base will provide you with enough profit to cover all of your business’s basic expenses.” It’s important to remember that the opportunity to market Quixtar items comes at a price. Because Amazon and other affiliate networks are free, they do not recommend buying your purchases through your link.
It’s a good idea to use your affiliate link to buy things from businesses where you already shop, but it’s not common or actively encouraged in affiliate marketing. Why? Because it is the equivalent of earning a tiny discount if you do so. Discounts are good, but you don’t earn actual money that way. Scale is where the real money in affiliate marketing is made. Within Quixtar, purchasing through your link is required since the amount of these discounts must cover the cost of membership. In that respect, Quixtar is similar to a wholesale club, except that the savings aren’t derived from economies of scale (bulk discounts).
Instead, the savings are given to you as a rebate. It’s a good idea to change your buying habits such that you buy particular items from Store A (Quixtar) instead of Store B. Purchases made through Store A may not be cheaper, but you will receive a rebate check. The issue is that you almost have to do so to recoup your initial investment. It’s deceptive, but it implies that each member (who is ostensibly searching for residual income, etc.) acquires a high-value customer.
There are two major significant differences between affiliate and network marketing. The first refers to the network, which was mentioned before the tangent on personal use. Companies like Quixtar, which I mention since they are likely the least well-known billion-dollar firm, rely on direct selling, which entails locating friends, business associates, church members, and other acquaintances and convincing them to buy into the dream. You have to since, once again, the actual money comes from one’s ability to recruit others, which in turn recruit others, and so on. But it’s not just about the number of people you can bring on board.; it’s also how much everyone buys and sells to their contacts. You’ll need people to join your downstream, but you’ll also need people who aren’t members to buy your stuff.
The final distinction, at least for the time being, as this post has already become a tome, and possibly my largest personal criticism of their kind of network marketing, arises from a prior point, incentives. It also incorporates rewards with the previously mentioned selling to your network and paying to join points. Network marketers receive no compensation for recruiting new members, which contradicts everything that internet marketers, particularly those in lead generation, assume. Each new Quixtar member must pay an initiation fee and purchase a beginning kit. The biggest add-on is a personal portal site (no comment), for which you must pay a not-insignificant monthly hosting charge. There’s nothing wrong with that, except that members who refer other members don’t get paid for the new members they bring in.
On the low end, each new member is worth $120, and on the high end, it’s worth $500, according to my calculations. If you refer ten persons, the organization will gain upwards of $5000, for which you will receive almost nothing. Other work from home/network marketing opportunities will pay for your signup, but none of them compares to Quixtar’s product richness and stickiness. Another major mystery surrounding Quixtar is where the signup money goes, which is one of the reasons for their secrecy.
One of the reasons for their concealment is that the signup money goes to Quixtar.
Quixtar would have bought LinkShare and opened up the platform if they had been wise (maybe fair is a better term). Quixtar’s creators are unquestionably intelligent because a small number of people receive a disproportionate percentage of the profits and do not have to work, unlike a typical executive or affiliate marketer attempting to keep up with Google. Quixtar creates some good things, but they make a select few wealthy by appealing to the heart rather than the mind, much like a drama.
I wish I could market some of their products, but doing so would entail joining the cult and adhering to a set of regulations. If you thought AdWords was difficult to understand, wait till you try to decipher the documentation for each business owner. There is a lot to say on this subject, but it will have to wait.
Apart from my personal opinions, the real possibility comes from integrating affiliate marketing and network marketing, which is just what social shopping aims to do. Alex Kim, one of my closest friends, was instrumental in my purchasing decisions. He’s an influencer who, in all honesty, deserves a share of the value he’s created for businesses. Consider all the other occasions when individuals directly impact trade – birthdays, receptions, and so forth. I see a Prosper.com site where people establish groups and buy through a group affiliate link, splitting the profits.
People buy through a group link / personal connection that may have impacted their decision. David Lewis built a site, Cashbaq.com, that takes affiliate revenues and shares them with users (like Netflip but with more programs), and this is only the beginning. (I’d tell you about another brilliant concept that could be executed right away, but that’s not the case here.)
We can develop a powerful and open opponent to manipulative corporations like Quixtar if people in affiliate marketing and lead generation can accomplish what network marketing has done – take the concept of affiliate and make it local and personal. And I believe we will. When it comes to producing money, personal online portals do not function. It’s time to learn from their success while also creating a compatible site with Internet marketing and the transparency culture that comes with it.