One of the biggest challenges that I’ve faced as an affiliate marketer is actually advocating that I’m not involved in a pyramid scheme or multi-level marketing.
A driving factor for this belief is due to the way that most new affiliates promote products, and how I promoted things when I first started.
It seems as if the standard practice is to join an affiliate program, head on over to social media and spam your link wherever you can and inside every Facebook group that will allow you to with the hopes that you’re going to make a ton of money really quick.
So right from the start, most affiliates will end up pooling themselves with people who’re spamming and promoting unethical things In similar ways throughout social media. (Which doesn’t work at creating long term wealth)
So, to answer the ongoing question: Is affiliate marketing a pyramid scheme?
No, affiliate marketing is not a pyramid scheme or a scam.
While they could be misinterpreted to be similar in some aspects, their business models are actually the polar opposite.
Pyramid schemes usually require entry fees to join, are restrictive to what you’re actually able to promote and the amount of people that you can get to sell under you is a direct correlation to how much you’ll make.
Whereas affiliate programs rarely even require any type of pre-screening let alone a payment to join, you are in complete control of what you want to promote, throughout any industry that you desire, and getting people to become affiliates to the same programs that you’re in can actually negatively affect you, as it only creates more competition for yourself to make sales.
Affiliate marketing is merely a modern interpretation of a very old business model, You promote someone else’s product and upon making a sale, you’ll receive a commission.
Very similar to how a real estate agent or a car salesman makes a living.
Affiliate Marketing VS Pyramid Scheme | What’s The Difference?
An affiliate is simply someone who connects customers to legitimate products or services and receives payment upon a successful referral.
Pyramid schemes usually revolve around products that aren’t what they claim to be and don’t pay out as much as they promised when you were signing up.
Check Out Another Article I Wrote: Is Affiliate Marketing A Scam?
What Is Affiliate Marketing?
Affiliate marketing is where you register with a vendor to promote their products on the basis that you’ll receive a commission for every successful sale that you’re able to make.
Unlike joining a pyramid scheme, you aren’t restricted to a specific product or even industry.
There are dedicated networks for product owners to find affiliates, in a sense it acts as free advertising and since they don’t pay the affiliates or endorse their claims it comes with very little risk to the product owners.
The business model is really as simple as it sounds, you have a friend who likes that rug you just bought off Amazon.
You send them a link to buy that same rug and you receive a commission at no additional cost to them.
Now getting people to consistently buy products is another story and will require you to build some type of traffic source.
I won’t be covering how to build traffic specifically in this article but I do mention it throughout various articles on my website!
Learning Digital Marketing can be one of the most valuable skills you could learn! Whether you’re an affiliate or involved in a pyramid scheme.
What Is A Pyramid Scheme?
A pyramid scheme begins with a transaction between 2 people.
An offer is then made that for every sale that person B can make, they’ll receive a commission.
And for each additional person that person B can get to sell that same product or service below them, there is the promise of getting a percentage of that revenue as well.
This creates a pyramid effect where each tier of the pyramid will have a supposed income level, however, usually only the people at the top are seeing those types of revenue.
What’s Wrong With Pyramid schemes?
The problem with these types of business models is that they are often related to misleading or fraudulent claims. If you think about it, how many people can actually achieve the top of the pyramid?
One, which most of the time is going to be the business owner themselves.
I’m not saying that you can’t make any money with these types of business models, because they wouldn’t be around if they didn’t line somebody’s pockets.
The chances of it being yours are slim in relation to the amount of effort it is going to take.
Keep in mind that businesses that are actually classified as a pyramid scheme are illegal in the United States.
What’s the difference between Multi-level marketing and a pyramid scheme? Check out this post!
What Makes Affiliate Marketing different?
Unlike a pyramid scheme being an affiliate you really do have the ultimate freedom.
You can choose what types of products that you want to promote, what industry you want to promote products in, physical products, digital products, how you want to promote them, the options are endless.
It in my opinion is the best business model to make money online, you don’t have to spend the money to brand a product, do customer service or handle any returns but you can still make a healthy commission upon making sales.
Instead of jumping into a network marketing scheme where you’ll have to promote things you halfheartedly believe in you can build content based around things you actually love and find affiliate programs that align with you and your passions.
Below is a list of a few networks that are dedicated to finding products to promote as an affiliate
Related Post: ClickFunnels Vs ClickBank: Which One’s Best For You?
How To Get Started With Affiliate Marketing?
Most will say that you need to go out and find a product that you want to promote but I’ve found the most success with focusing on where you plan on getting your customers from.
You could have the most amazing product and be in the best affiliate program in the world, but if nobody ever sees your content or your affiliate links you’re never going to make any sales.
The biggest mistake I see new affiliate marketers making is that they don’t treat it as if it is a real business.
Just because you didn’t create or brand the products you’re promoting doesn’t mean you aren’t building a business and a brand.
But instead of branding a product, you brand yourself, because if people follow and believe in you, they will believe in products that you recommend to them.
Related Post: How To Make Money Writing About Things You Love!
Is Affiliate Marketing A Pyramid Scheme?
While affiliate marketing does share some commonalities that can be easily misinterpreted as the same thing as a pyramid scheme.
There aren’t as similar as one would think, the only trait that is applicable in both business models is the commission or sales pay structure.
Pyramid schemes are often illegal throughout the United States because they promote unethical products or services.
Affiliate marketing is probably one of the most common ways that people are monetizing online without you even knowing it because unless you’re actively looking for an affiliate or even what to look for most would have no clue they even purchased something through an affiliate link.
Which is what makes it such an amazing business model.
- You don’t have to brand your own product
- Deal with shipping or managing any inventory
- You don’t do any customer returns.
- You refer someone to products or services and get paid!
Having A hard time figuring out what to promote? Grab a list of my favorite affiliate programs here!