If you are at least a little bit interested in the affiliate network marketing idea I talked about on the first page of this website, then one of the bigger questions you might have right now is about how you get paid. If you haven’t read it and have no idea what I’m talking about, then please read about what I mean by affiliate network marketing.
With both affiliate marketing and network marketing you make money when someone buys something in such a way that the seller can identify you as the affiliate. In affiliate marketing that is through a link that identifies you as the affiliate seller. It doesn’t matter how you share your link – on a website like I do, a social media post, an email, or a physical business card or flyer. You get the credit as long as they follow your link. It will be the same for the first order from a new customer if you are taking an affiliate marketing approach to network marketing, which is what we are talking about here.
Here is where you see the difference between affiliate marketing and network marketing. In affiliate marketing you’re done with that customer after the first order with a particular vendor because now they are a direct customer of that vendor. You need an offer from a new vendor in order to make more money from that lead.
Network marketing lets you keep your customers. After that first order, at least with the company I affiliate with, the customer has an account that they can log into to place all of their future orders, or they are recognized by their contact, shipping and billing information if they don’t log in first. Either way, the system recognizes them as my customer and I get the credit for the order and I get paid.
How Much Do I Get Paid?
That question goes hand in hand with how do I get paid, right?
The hype in affiliate marketing is that you can make up to 100% commissions. It sounds like you can make a lot of money, and you can if you have a huge list. But you have to remember what a vendor is trying to do by offering something for sale as an affiliate offer. They put up an introductory product, usually inexpensive, to get an initial sale so that they can add a new customer to their pipeline. They are more than happy to give you the full sale price of that introductory offer because the potential future sales to that customer are so much more valuable.
The simple math is that 100% of $10 is only $10.
It is true that you will get a much smaller commission from a product offered by a network marketing company. The company I work with gives you 20% to start off. That doesn’t sound like much, but 20% of a $100 item is $20. That’s twice what the affiliate offer gave. Or maybe it’s a consumable item, like a $40 nutritional supplement. 20% of that is $8 with the potential for another $8 every month thereafter for as long as your customer continues to use the product. It took 2 months to surpass that $10 affiliate offer, with and it can keep growing from month to month. It adds up nicely.
I need to clarify this a little.
For the affiliate offer you are getting a one-time commission on your first sale. What I just described to you about the network marketing offers was actually retail profit. It works as if you purchased the product at wholesale and resold it at retail and kept the profit. In reality you never touch the product and aren’t directly involved in the transaction. Then the company sends you the retail profit.
In a network marketing compensation plan, there are levels that you can move up to earn additional commissions on orders you generate and on orders generated by people you bring onto your team if you choose to. Eventually thats worth about another 10% or so for a grand total of about 30% income from each order.
To start off though, just focus on the 20% retail profit. A lot of network marketers focus on recruiting even though they can make more money per order by selling to customers at retail.
That’s How You Get Paid
In summary, just like in affiliate marketing, you get paid some amount of money for generating orders for a product. While you do get smaller commissions (actually retail profit) on network marketing offers, a smaller commission on a more expensive item still nets you a bigger payday. And your income can continue to grow with additional orders over time from the same customers, which you will never get from an affiliate offer.
Ready? Join me here.