The difference is best explained in terms of way compensation is structured to pay for performance. Because of many hybrid forms of compensation payments available now on internet, to a newbie scouting for business opportunities, it is easy to get confused over many terms and definitions used. In evaluating compensation plans, it is essential to understand subtle difference between two models. Ultimately, you want to understand…which model yields more income?

What is affiliate marketing? Affiliate marketing is usually done online. In its simplest form, affiliate marketers are compensated on a one time transaction only. Unlike products offered in a MLM business, affiliate products are often ones that a customer would only need to purchase one time. Thus, more affiliate marketer sell, more they make. This is quite akin to direct sales albeit made via internet.

Affiliate marketing has a compensation plan based on performance measures. For instance, if affiliate marketer is successful in form of sales, clicks, registrations, etc, he/she gets rewarded. The desired action as a means of compensation is already pre-agreed upon by affiliate merchant and him/her.

In a short space of time, affiliate marketing model has also evolved to a 2 level (or in some cases, up to 5 levels) compensation plan. In popular 2-tier version, for instance, you (as an affiliate of a particular e-book merchant) will earn commission when you sell a book to person A and if person A signs up to be an affiliate and manages to sell to person A1, you get compensated too, in addition to person A.

Let’s now go on to talk about what network marketing is. In network marketing model, compensation plan works in a similar fashion, except that compensation by sponsoring company can be paid up to several, several or unlimited levels. The number of levels and restrictions in terms of payout is very much dependent on arrangement offered. As arrangements can vary from one company to next, this makes comparisons of various compensation plans available out there difficult. So be sure to read all fine print!

The different avenues that you can make money are:

1. E-bay model Got junk or an interesting product to sell? No problem! Hop on to http://www.e-bay.com. There are millions and millions of visitors each day to site. Just create a free account and you are ready to start.

2. E-Affiliate/network marketing programs You earn a commission if you are successful in selling affiliate books, programs or network marketing programs. This business model has advantages in that you do not have to create your own product or write your own sales letter. You also get a replicated website as an affiliate. All you need to do is to actively refer your friends and market product or program.

Go to http://www.clickbank.com for an extensive range of affiliate programs that you can represent.

3. E-Shopping model In this model, you are interested to sell your goodies online. Here, your website will feature pictures and clear descriptions, shopping cart and a payment processor. However, if you are selling physical products, you have to be address issues like warehousing and delivery.

On other hand, there is no need to create a product yourself, if you do not have one onhand. Simply go to directories such as http://www.mydssd.com , http://ww.ownawebstore.com and http://www.bizwarehouse.com . These sites will even handle shipping and delivery for you.

4. E-directory model Here you create a free directory of various resources and links. Your job is to drive traffic to this site. You make a revenue from businesses who wish to advertise on your website.