Affiliate marketing is sometimes mistakenly associated with pyramid schemes, but they are fundamentally different. While both involve earning through networks, affiliate marketing is a legitimate business model, whereas pyramid schemes are illegal and exploitative. In SOME cases they can overlap and in this article I want to help you identify when an affiliate marketing opportunity is legit and when it’s a potential pyramid scheme.
Who I Am:
Before I explain this is in more detail, I want to share some quick info on who I am. My name’s Vitaliy and I do affiliate marketing for a living (and have for over 17 years now). I make a full time living at it and help others do the same, while avoiding the many mistakes and pitfalls out there.
Affiliate marketing can be a GREAT way to make a part-full time living and it can also potentially make you an income 24-7, even while you sleep. But the truth is it takes time, work and the proper guidance to make it work. It is not a get rich quick scheme.
If you’re new/struggling, my BEST advice for getting started would be to try the Wealthy Affiliate program. This is the program I learned all of my skills in this business from. They help you create an affiliate business on ANY passion you have in life.
They’re also free to get started with, have MANY success stories and you are provided with everything you need to succeed. Try them out here.
What is Affiliate Marketing?
Affiliate marketing is a performance-based model where individuals, called affiliates, promote a product or service. Affiliates earn a commission when someone makes a purchase through their unique referral link. This approach benefits everyone involved:
- Companies gain more sales
- Customers find relevant products
- And affiliates earn income
Here’s a quick look at the model:
Success in affiliate marketing depends on promoting valuable products that benefit the audience, often through blogs, social media, and content creation. I’ve promoted everything from weight loss products, to outdoor programs and even affiliate marketing programs. You can literally promote anything online, with access to millions of products and services (all legit by the way).
What is a Pyramid Scheme?
A pyramid scheme is a fraudulent structure where participants earn money primarily by recruiting others into the system rather than selling products or services. Participants often pay an entry fee, and the scheme depends on continually recruiting more people.
Pyramid schemes eventually collapse when recruitment slows, leaving most participants with losses. One of the key features of a pyramid scheme is a LONG downline system where you refer a person, they need to refer others, and those people need to refer others to keep the scheme going, and that is all part of the pyramid model.
Key Differences:
- Product vs. Recruitment Focus (Downlines):
Affiliate marketing revolves around selling legitimate products and services, while pyramid schemes prioritize recruitment. Earnings in affiliate marketing come from sales, whereas pyramid schemes rely on entry fees from new recruits. - Legitimacy:
Affiliate marketing is widely recognized and used by reputable companies like Amazon, Wal Mart, Best Buy, Shopify and more. Pyramid schemes, on the other hand, are illegal and regulated against by authorities like the FTC (and many have been taken down over the decades). - Sustainability:
Affiliate marketing is sustainable because it’s based on actual product sales. Pyramid schemes are unsustainable and destined to fail as recruitment slows. - Income Source:
In affiliate marketing, income is generated from sales. Pyramid schemes generate income from recruiting others, not from selling real products or real quality services.
Red Flags to Watch Out For:
Most affiliate programs are legitimate, but there are rare cases where it can overlap with a pyramid scheme and in my experience that’s mostly with MLM programs. Be wary of programs that:
- Emphasize recruitment above all else
- Charge high upfront fees
- Or promise unrealistic returns (everyone succeeds mumbo jumbo talk)
Legitimate affiliate programs focus on promoting real products, have transparent payment terms, and do not require hefty entry costs. Also look at what you’re actually getting. If you’re not getting any value, pay a bunch to join a program and all you’re doing is promoting the SAME program to others, that’s likely a pyramid scheme.
My #1 Recommendation For Succeeding At Affiliate Marketing:
If you want to succeed at affiliate marketing, my top advice is to join a program that has the following elements:
- Great training
- Has many success stories
- Provides you with all the tools needed to succeeded
- Included support and expert help
There’s very few programs which have all these elements and my top pick out of those few is Wealthy Affiliate, the same program I mentioned above that got me to where I am in this business. It teaches you step by step how to build a thriving affiliate business on ANY passions you have in life.
Think of Wealthy Affiliate as both a GPS and vehicle to steer you to affiliate marketing success. While it takes time and work, it’s also a guided process where you get all the tools, training and help along the way to succeed. You can literally start for free (no CC required) and get access to your 1st website, a beginner course, my help and more.
Success stories:
How To Get Started:
- Join here (its free to start)
- Complete the set up process (you’ll be making your 1st passion based affiliate site)
- Start your training
Once you get started with the training, the owners of the program (Kyle, Carson and myself) will personally leave a message on your profile within the program and welcome you. If you have ANY questions, you’ll be able to interact with us and the community.
What To Expect:
The program is free to get started with, but it does have upgrades available afterwards that unlock more training, tools, and benefits. These are the Premium ($49/month) and Premium Plus ($99/month) memberships.
I recommend you free membership, see if you like the program and then choose if you want to upgrade or not. There’s no risk and you can decide if you want to stick around or not later. I’ll also be there to help you so if you have any questions as you progress, you can reach out to me anytime!
Affiliate marketing success is possible for everyone, but in order to get there, you need good guidance, training, help and your ambition to make it happen. Wealthy Affiliate has you covered on everything except the ambition which is up to you and if you apply what they teach and utilize the programs benefits, I am confident you’ll see results because that’s what happened to me and many other members of the program. Get started today!
If you have ANY questions about Wealthy Affiliate, affiliate marketing in general, feel free to contact me below!