The process of distributing products or services directly to consumers through a network of independent distributors is known as MLM/network marketing.
Distributors are paid for their sales, as well as for their endeavor to build the network by recruiting new distributors.
A product is sold by MLM companies to distributors for a price.
They, in turn, sell them to customers at a higher price.
Incentives are paid to distributors for bringing in new distributors.
New distributors who are requisitioned by an original distributor are known as "first level distributors", while subsequent distributors are known as "second level distributors".
The payment scheme is the essence of MLM network marketing.
This scheme ensures commissions of each distributor from sales of all distributors in his network up to a certain level.
Distributing products or services to consumers through a network of affiliates who refer customers to the seller is the basis of affiliate marketing.
The affiliates are given incentives for these recommendations for sales to the customers who are referred by them.
The major deterrent to affiliate marketing is that affiliates at times are not paid satisfactorily for their contributions in building the network.
Their income is restricted to first and second level affiliates, and they fail to receive income from affiliates on other levels Success in affiliate network marketing is assured to those who have a network in relation to other people and can be swiftly converted to the real network.
Success also awaits those who are very innovative and diligent.