If you’re here, it’s likely you’re interested in starting an online business, but you’re a little confused about whether to start an affiliate marketing business or a membership site.
You may have seen several different businesses that fit into these different models and have great perks like:
- Location freedom
- Time flexibility
- and lucrative incomes
But, you might be concerned about whether you’ll like to do what it takes to run an affiliate marketing business or a membership site more. People are doing great things with both business models, so it can be tough to decide which way to go, right?
Where there’s good, there’s usually also a bad side also, and both of these business models are no different.
You may have seen people who seem like they’re not doing so well in these business models and you want to avoid that. They might not be making much money, having much freedom, or enjoying running the business overall, and you don’t want to be like that.
Added to those two scenarios, there are also people who do both: affiliate marketing and start a membership site! Those people might really confuse you because you might wonder, “Which one do I start first?”.
As a result, you’re here trying to sort thru which business model would work best for YOU. In this article, I’ll be comparing affiliate marketing vs. starting a membership site, the tasks required, what days are like, and more. These are two business models that have many great perks like predictable flows of income (once they’re established), lots of growth potential, location flexibility, and more.
In this Affiliate Marketing vs. Starting a Membership Site comparison, I will tell you:
- What each is
- How each works
- Pros and Cons
- What they each do well and they don’t
- What others are saying (good and bad)
- The Major Differences
- My Recommendation
- And, Alternatives (in case you want to do some additional comparison shopping)
What is Affiliate Marketing? An Overview
Affiliate marketing is the new sales, but there’s lots of perks to affiliate marketing that didn’t come along with the traditional sales model. With traditional sales, you’d likely work for one company, commission-only, and do things like door-to-door, cold calling, cold emailing, and live presentations.
Nowadays, there’s more technology like social media, Youtube, blogging sites, tracking software, and the like, so instead of working with one company, having a “sales job”, and doing live presentations, sales is evolving quite a bit in a positive way. Affiliate marketers (like me) get to choose any passion we love, master the passion, and work with several companies that help people with our common interests. So, where a few decades ago, salespeople were more known to work at places like auto dealerships or as real estate agents, now, affiliate marketers, work on Youtube, on podcasts, and write on blogs.
We choose topics (like mine is entrepreneurship) and form affiliate partnerships with companies that can help our audience achieve their goals. For example, as an affiliate marketer whose chosen the topic of entrepreneurship, I work with affiliate partners who help my audience (entrepreneurs) to start or grow businesses.
The skills of affiliate marketers include things like social media marketing, search engine optimization, copywriting, video presentation, webinar presentation, podcast presentation, buyer psychology, market research, lead generation, people skills, audience growth, and more. Most entrepreneurs nowadays are finding they need the same skills of affiliate marketing in order to sell their own products or services, which is one reason why I recommend entrepreneurs to start as affiliates before creating products or services.
What is Starting a Membership Site?
Unlike affiliate marketing where you’d build an audience and sell other people’s products and services, with a membership site, you’d be selling your membership. The membership could include perks to your customers like video training, live events, software access, game access, intellectual property access of some sort, ongoing services, or a combination.
When you start a membership site, you spend more time on product development because you have to make something valuable to offer the customers.
The product development process can take substantial time and upfront capital in order to deliver something very valuable that will retain customers, which is one of the main goals in a membership setting: customer retention. Similar to affiliate marketing, you’d still need to know how to attract customers (which would likely involve social media marketing, search engine optimization, paid advertising, etc.), how to do market research (to create value for the customers), and more.
Those who are unsuccessful with memberships sites or affiliate marketing often are that way because they haven’t mastered the skills necessary to get sales.
How Do I Get Started with Affiliate Marketing?
To get started with affiliate marketing, I’d recommend you get trained on:
- How to set up a website
- How to attract customers
- and, How to engage the potential customers so they buy your affiliate partners’ products and services
My #1 recommended training for learning those skills and mastering them is Wealthy Affiliate. They’ve trained affiliates to become successful: making full-time incomes and well into 7-figures of annual income. You can check them out for free and get my “Business Growth Framework” e-course as my free gift to you here =====>>>CLICK HERE<<<=====
How Do I Get Started with Starting a Membership Site?
To get started with building a membership site, I’d recommend you get trained on:
- How to set up a website
- How to attract customers
- How to create valuable digital products
- Customer service
- and more
I think it’s best to develop the skills of affiliate marketing first, begin working with an affiliate partner that compliments the products and services you plan to offer on your site. Once you notice you’re getting traction, attracting more potential customers, and making sales for your affiliate partner, you’ll know you idea is validated–this is proof of concept. My #1 recommended training for building the affiliate marketing skills is Wealthy Affiliate and you can =====>>>check them out free when you go here <<<====
You can take the income from your sales and reinvest that into the additional tools you’ll need like:
- Learning management systems (for example: Podia, Teachable or LifterLMS for hosting online courses)
- Education for learning how to make digital products (I’d recommend a course like Create and Go’s course Six Figure Blogger)
- Or even paying yourself while you’re doing non-income generating activities like research, product development, and so on.
Who is Affiliate Marketing For?
- Those who are new to starting online businesses and need to develop the skills from the beginning
- Those who like simplicity
- Those who already started a membership site and want to add additional income
- Entrepreneurs of all types and all niches
Who is Starting a Membership Site for?
- Starting a membership site is for a product developer or service designer that will be able to continually engage customers to maintain retention
- Someone who has the startup capital for tools like learning management software, storage (to host files), advertising (to drive traffic), education, and more
- Someone who already has significant traffic and engagement sufficient to get sales
- Someone who already has the skills to sell their membership
- Someone who knows how to do market research
Affiliate Marketing Tools & Training
For affiliate marketing, the tools you need include:
- Website hosting
- A domain name
- Market research tools
- Education
- Support
There are other things you can add on to improve results, but if you start out with these basic essentials, you can begin to make money. You can get all of your tools and support when you join me and a community of 1.4 million+ entrepreneurs here ====>>> Join me and the community free <<<<=====
Starting a Membership Site Tools & Training
For a membership site, you’ll need:
- A domain name
- Website hosting
- Additional file storage (is likely)
- Learning management system or digital product hosting (optional depending on your business model)
- Payment processing
- Customer relations management
- Customer service tools like phone service, mailing address, etc.
- Market research tools
- Community support
Get the tools you’ll need to start your membership site (including domain name, hosting, education, and community support) =====>>> Join me with the tools and coaching you need to build your membership site here<<<=====
What Does Affiliate Marketing Do Well
- Affiliate marketing helps to build the preliminary skills you need to start any online business
- It helps you build relationships with others within your niche
- It helps merchants to get their products and services in front of a larger audience
- It helps customers find solutions, affiliates make commissions, and merchants to get more sales
- You can build a community of like-minded people around a common interest
- You can make a lucrative income
- There are passive income opportunities (after the traffic is built and the copywriting or presentations convert well)
What Does Starting a Membership Site Do Well
- It offers residual income opportunities (you can also find with recurring commission affiliate programs)
- You can build a community of like-minded people around a common interest
- You can make a lucrative income
- You control the quality and benefits of the products and services
- You control the price of the products and services
What Doesn’t Affiliate Marketing Do Well
- You don’t control the quality or benefits of your affiliate partner’s products and services
- When customers are dissatisfied, sometimes, it’s out of your control to solve the problem
- You don’t control the health of your affiliate partner’s business, but if it shuts down or stops the affiliate program, it can impact you
- You don’t control the prices, so if your partner fluctuates the prices, you’d could get paid a lower commission, but you don’t necessarily control that
What Doesn’t Starting a Membership Site Do Well
- Client fulfillment and customer satisfaction becomes a larger responsibility, so membership sites are less passive (unless their 100% hired out), so if you’re looking for “passive income” a membership site may not be the way to go
- They’re not the business model with the lower overhead costs, so if you’re looking for a low-cost startup, this is probably not the best option
Affiliate Marketing Review Roundup
Some people have good experiences with affiliate marketing and others don’t. The ones that have a good experience usually:
- Find a mentor whose been successful doing what they want to do
- Have realistic expectations
- Find a proven path of education
- Are surrounded by supportive people (even if their family and friends starting out aren’t supportive)
- Have good work ethics
- Are persistent and don’t give up
- and, are willing to invest in the tools that need
A Very Helpful Affiliate Marketing Review
When I asked my friend, Zarina, from Laptop Lifestyle Beauty about why she chose affiliate marketing in comparison to other business models, this is what she said:
My online journey started in 2015 but I wasn’t consistent for a couple of years. In 2017, I started an Amazon niche website that I’ve been regularly working on and within a year it finally reached it’s first 4 figures.Â
You may be aware that I have quick report here on WA, but the full income report/progress can be found here.
(Back then, I was lucky to stumble upon Wealthy Affiliate which gave me the right guidance and that has a community of like-minded people who are there to help along the way.)
Now…
Why affiliate marketing over other business models?Â
There are a few reasons for it:Â
1) it’s fairly easy for beginners to start this model,
2) low startup costs,
3) writing content is something that works for ME, but even if someone is into videos, they could successfully do affiliate marketing with a YouTube channel,
4) less hassle.Â
Let’s elaborate on #4:
Having a website where you write content (or a YouTube channel where you submit videos) is less complicated than, for example, Amazon FBA or drop shipping.
You don’t have to deal with suppliers for your physical products, you don’t have to list them on Amazon, think about inventory/stock, you don’t have to deal with customers if something goes wrong…
Even if your customers are unhappy with the product/service you recommend, they deal directly with whoever is selling that product/service, NOT YOU.
Basically, you’re the middleman.
Best of all?
With affiliate marketing websites, I don’t feel like I’m selling, I feel like I’m HELPING people. I provide information that they are searching for and I honestly give them my best recommendations.
I would certainly recommend affiliate marketing to people. With a slight twist. I’d find out what they are more interested in: writing or talking and I’d suggest them either a text-based website or a video-based YouTube channel.
Because what’s good for me (e.g.: writing), might not be good for you (e.g.: videos). Eventually you could evolve to other areas, but it’s best to start with what you’re good at. Basically use the talents you already have.
Cold-calling, live networking etc, honestly it just sounds very complicated and you put a lot of YOUR hours in with less success.
Having an affiliate program means you’re leveraging your business, other people will be promoting your products/services and it would be GLOBAL. The potential is a lot, lot higher than if you were to do it locally/physically.
Don’t underestimate the power of the Internet !!!
Starting a Membership Site Review Roundup
Like affiliate marketing, there are also people with good and bad experiences starting a membership site. Typically, those who are successful start their membership sites after they have an idea about how the internet works, how to drive traffic, and how to create products and services people love over long periods of time.
Unfortunately, people start memberships sites and fail, but the reasons are usually because they:
- Spent lots of time and money on product development or service delivery
- They didn’t know how to sell memberships
- They didn’t deliver a service or product people would like
- They didn’t have the support and education they needed
- and there’s other reasons
Most Helpful Positive Review of Starting a Membership Site
In my case I gained the insight that having my membership site set up as an online course would actually result in a much greater profit than having it run as a traditional membership site with no end date. For education products, this is likely a lesson that will hold true across the board, however if you sell a standardized service on a subscription, for example web hosting or an email autoresponder service like AWeber, then it makes sense to have no end date on payments.
If you are paying attention and really thinking this through, you might be questioning how a membership site can become an ongoing, near-passive and stable income stream if you always have members exiting your site?
That’s a great question, and I’m glad you are really taking on board what I’m saying here and not just looking at a membership site as some kind of magical cash cow. The truth is, members leave membership sites and just because you get 200 people into your site during launch week does not mean you are set for life with $10,000 a month forever.
Attrition is reality and if you want to really succeed with your membership site, you need to learn how to both market your site and deal with attrition – and here is the kicker – you then need to learn how to automate the processes. Once you have automation in place that bring in a steady stream of new members that is greater than your attrition rate, which you work to reduce to as low as you can, then you truly have a real passive and stable income stream.
Published by Yaro Starak in his post The Truth About Membership Sites
How much does Affiliate Marketing cost to Start?
Affiliate marketing is one of the lowest cost business startups. I mentioned all the details for how to start an Affiliate Marketing business here including the tools and the steps, so check it out. The tools you need to get started can cost as low as $359 when you join the industry leading provider of affiliate marketing tools, support, and education at Wealthy Affiliate.
If you decide to start an affiliate marketing business other places, the startup costs are less predictable. Instructors may require various combinations of tools, and often when combininng tools from various places, you can end spending thousands of dollars! The affiliate marketing education alone can range up to tens of thousands, but you can get a high quality education and the tools you need at Wealthy Affiliate here ====>>> Get the education and tools to start an affiliate marketing business here <<<====
Price to Start a Membership Site
To start a membership site, there are many more tools (especially considering the variations of the product development process). The costs can range from $1000 and go up quite significantly (especially if you’ll be offering physical products or software as a service).
Major Differences Between Affiliate Marketing and Starting a Membership Site
The major difference is affiliate marketing requires you to pay attention to the front end functions necessary to attract customers, and the client fulfillment process is complete when you’ve helped the customer make the buying decision easily.
Whereas, when you create a membership site, you’ll still have the front end functions–attracting customers, helping them make the buying decision easy, and encouraging them to take action, but there’s more. Once the customer decides to buy the products or services, you’d also have to fulfill their orders, provide customer support, manage payment processing and complete other backend functions.
My Final Opinion of Affiliate Marketing vs. Starting a Membership Site
Overall, starting an affiliate marketing business or starting a membership site are both great business models that can get you results. They both can offer lucrative and consistent ongoing income, positive impact on others, and lots of professional fulfillment.
Even though they both can be great businesses to start, I’d recommend entrepreneurs to start as affiliates. This will help to build a relevant audience, develop the sales skills, validate the idea, and provide the capital for reinvesting into product development–this way the business can be self-sustained earlier on.
Once the skills are developed and sales are optimal, then you can diversify by creating a membership site that can fulfill your customers. My #1 place to get started–regardless of whether you want to go into affiliate marketing or starting a membership site is Wealthy Affiliate.
You can get two free websites, 10 free training lessons on Affiliate marketing, 1-on-1 coaching, and my free “Business Growth Framework” e-course here. Â
Top Alternatives to Affiliate Marketing and Starting a Membership Site
If you’d still like to look at other business models, here are a few options you might want to consider:
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