Affiliate Marketing vs. Direct Sales: What You Need to Know
There are quite a few buzz words out there right now on ways to make money from home. Two terms that you've probably heard something of are "affiliate marketing" and "direct sales". Both are legitimate ways for stay-at-home moms and dads to earn extra income and even build a full-time career while raising kids.
But there has been some confusion as to the differences between the two. While both can be done in a flexible way, and there is unlimited earning potential for each, the way they are done are very, very different. Let's take a look at them here:
Affiliate marketing occurs when you use an existing network (usually online) to mention or refer your fans or audience to products you talk about. You may or may not have used them yourself. You get a commission for each sale or referral you make.
Direct sales usually requires you to use the products yourself. You are directly selling the items from your own personal inventory or an inventory you have access to as a seller. You also earn a portion of your sales, but you are considered the sales person, not just a referrer.
Start Up Costs
While it's usually free to join an affiliate network and start referring sales, you probably incur costs to do business as a blogger or website owner. We are assuming that you have those costs, anyway, and that affiliate sales are just icing on the cake. It rarely costs anything to join an affiliate network. (Some of the most popular affiliate networks, such as Linkshare and Shareasale, cost nothing to join.)
Direct selling businesses, however, usually require that business owners buy and use their products. You may have to sign up for a starter kit of inventory, commit to making monthly or quarterly purchase amounts, or even store your own purchased inventory for resale to your customers. This can require an investment of $29 all the way to $500 or more.
If you're blogging or running a website, anyway, the added time to add a few well-placed affiliate links can be mere minutes. If you decide to do in-depth product reviews, marketing sales funnels, or special content pieces, you can spend a few hours a month for each affiliate program you run.
Direct selling, on the other hand, can require 5-20 hours a week, or even more. It depends on your personal selling goals.
Passive vs. Active
While I don't believe that "passive" income truly exists with regards to online business, if there was a "passive" income generator, affiliate income likely comes the closest. It is possible to write a great article, insert some affiliate ads or links, and sit back and watch the earnings come in over a period of time with no additional work. (Although I strongly recommend you continually optimize your content to increase earnings potential.)
Direct sales requires you to make and maintain contacts, host parties or other events, hand out flyers or materials, make calls, and be actively selling all the time. Some people may love this type of interaction, but it is definitely not a passive endeavor.
Your Inner Circle
Many people like affiliate marketing because, while you can invite your close friends and families to check out your online sites -- and, in turn -- your affiliate offerings, you don't have to. There are plenty of people online that can find other ways to view your content. Clever use of SEO, Google Ads, and social media marketing can get fresh eyes to your affiliate offers all the time. You might never need to ask Aunt Edna to check out your business.
Direct sales may often require you to talk to your friends, family, and neighbors to get those first sales. While many business owners are turning to some of the same methods used in affiliate sales to get interest, it's pretty common for people to buy direct sales products from people they know and trust personally. You need to be comfortable with bringing in those close to you into what you do.
So, when it comes to direct sales vs. affiliate income, is one better than the other? I don't think so. I know that I've done both and I'm more comfortable with some aspects of affiliate sales. But that's because of my personality and the way I run my business. I know plenty of people that do horribly with affiliate business and are making a living with direct sales -- and they love it!
Find what works for you, develop the business, and be proud that you are nurturing your family with a home-based business. And feel free to ask questions along the way on our Facebook page!