When getting started with affiliate marketing, many people get it confused with being apart of pyramid schemes. This keeps many people from getting into the business. So, is affiliate marketing considered a pyramid scheme?
No, affiliate marketing is not a pyramid scheme. A pyramid scheme is when a company tries to recruit new people by giving people already within the system a commission. Affiliate marketing is when you give value and make commissions from getting someone to buy something.
In the rest of this blog post, we will go over what you need to know.
Affiliate Marketing VS Pyramid Schemes
When someone joins a pyramid scheme, the money spent will go into the pockets of the people at the top. The person who recruited them will make a commission, and so on and so forth.
With affiliate marketing, you’re in control of your own business. You’re not paying someone to be apart of something, you’re making a commission from referring a product or service.
The main difference is that with affiliate marketing, there’s value being given. With a pyramid scheme, there’s no product or service being delivered, only money changing hands.
In most cases, pyramid schemes are a sold dream. For instance, you might be promised a big return if you recruit people into the scheme. However, the reality is that most people will never see that money.
Affiliate marketing is not a get-rich-quick scheme. It’s a real business model that can help you build sustainable income. When done correctly, affiliate marketing can provide you with a passive income stream.
Are There Any Similarities Between the Two?
The only similarity between affiliate marketing and pyramid schemes is that there is a commission being made. Another way they are similar is that both of them are just another way of marketing.
That’s pretty much where the similarities end as pyramid schemes are illegal.
Many companies got away with disguising their marketing efforts with the name M.L.M (multi-level marketing). Multi-level marketing is a legal way of marketing where you make commissions from not only the product sales that you generate, but also from the sales of the people you recruit.
The thing with multi-level marketing is that it’s very easy to cross the line and turn it into an illegal pyramid scheme. This is why many companies have gotten into trouble for disguising their pyramid schemes as an M.L.M business.
How Can You Spot a Pyramid Scheme?
The number one way to tell if you’re looking at a pyramid scheme is if you’re being asked to pay to join and there’s no products or services being delivered.
Stay away from anything that’s promising you easy or guaranteed money. If it sounds too good to be true, then it probably is.
Can Affiliate Marketing Programs Be Scams As Well?
Not every affiliate marketing program is bad, but there are a few bad apples out there. Just like anything else in life, you need to be careful and do your research before signing up for an affiliate marketing program.
There are a few things you can look for to see if an affiliate marketing program is a scam:
- They’re asking for money upfront: You should never have to pay to join an affiliate marketing program.
- They’re not transparent about their commission structure: A good affiliate marketing program will be upfront about how much you can earn and how they calculate commissions.
- They don’t have a good reputation: If an affiliate marketing program has a bad reputation, it’s best to stay away.
There are a lot of great affiliate marketing programs out there. Just be careful and do your research before signing up for one.
Conclusion
So now you know that affiliate marketing is not a pyramid scheme like many people think. It is simply a way for brands to reward publishers/affiliates for bringing customers to them through their own marketing efforts.
If you are thinking about getting into affiliate marketing, remember that it is important to find a niche that you are passionate about so that you can add value and be successful in your efforts. Thanks for reading!
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