Is Affiliate Marketing a Pyramid Scheme, MLM, or Just a Scam?

By Josh Koop •  Updated: 04/01/21 •  7 min read

Is affiliate marketing just a scam? Is it a pyramid scheme or multi-level marketing (MLM) strategy that pays only the top of the pyramid payouts? Or is it really just an effective way to earn money online and build an online business from scratch, without any investment other than your time, today we answer is affiliate marketing a pyramid scheme?

Affiliate marketing is not a scam, nor a pyramid scheme. Pyramid schemes have impossible payout goals and unsustainable, where affiliate marketing you write content for visitors providing them helpful information on a topic and possibly a product to solve a pain point, without ever purchase items.

In this post, we’ll explore what affiliate marketing actually is and how you can use it as a legitimate way to grow your own business.

Now that you understand this lets take a look at it with a little more focus on knowing what a “scheme” is in the first place as when you start this many people, family included, may ask the same question and then you will know how to answer.

Is Affiliate Marketing a Scheme?

Affiliate marketing is not a marketing ploy, MLM, or pyramid scheme. It’s a legitimate way to earn money online and build an affiliate business from scratch, with little investment and some applied blood sweat, and tears.

The thing about affiliate marketing is that it takes time for organic traffic to build up. This is because you’re not paying for traffic, but instead relying on the people who come across your content and decide that they want more information.

Whereas, a pyramid scheme is a business model that recruits members via a one-time payment, with the promise of huge rewards later for recruiting others into your “downline.” Pyramid schemes are illegal because they’re based on unsustainable and often impossible to achieve goals.

Can you Become a Millionaire From Affiliate Marketing?

You can become a millionaire but this won’t come overnight, unlike what many may claim online. It takes time to build up enough content and a large following to make affiliate marketing work for you.

It’s not about how much money someone has, but rather the amount of effort they put in that determines success or failure with this type of business model .

How Much Does an Average Affiliate Marketer Make?

Your average affiliate marketer with starting to lower levels of experience will make around $300 or less per month, but this can be increased with more experience, more content, different affiliate offers, or display based advertising.

Many affiliate marketers will never surpass this level due to becoming tired of not seeing the over promised results or they have shiny object syndrome and move from idea to idea, never fully realizing any site to a minimum of content which leads to never moving the needle.

A more sustained and successful blogger within affiliate marketing can make from $300 to around $3000 per month, this is usually the case for those with a larger site, email lists, social media followers, and years of experience.

The more experienced an individual becomes at marketing online through blogging about their content and about products that interest them, the more they can write helpful information that pulls people in to make purchases.

Then on the top end, the most successful bloggers will make a giant range of income from $3000 to $50000 or sometimes even more per month.

Many who reach this level will reach much higher into the $100k or larger income per month, though at this level you will typically begin to incur bigger costs due to hiring employees to manage tasks you need to delegate.

How do Affiliate Marketers Start for Beginners?

I have a whole post devoted to getting a start in affiliate marketing. I will recommend that you start with a niche that you know well and are passionate about, as this will make it easier to build up content and write to the ghost town.

As for time, building an affiliate website will take dedication along with continuous effort, for many this will mean taking at least an hour each day, and more if you can afford it, then you must hit publish on content each and every day.

Josh – White Hat Blogging

Content is what will make or break you in your affiliate marketing journey, many get sidetracked with fonts, themes, and stuff that doesn’t get you traffic and build a site and eventually will lead to quitting.

What is the Best Affiliate Marketing Program for Beginners?

The best affiliate marketing program for people learning and starting in this business is definitely the Amazon Affiliate Program as it is the easiest to get started with along with having a lot of free available resources for beginners.

The Amazon Affiliate Program pays you commissions on products that are sold through your website, blog or social media channels after linking them back to an appropriate product page at Amazon using their affiliate links you create on their SiteStripe or with an API tool like Amalinks Pro for WordPress.

The commission rates vary depending upon what type(s) of items you’re selling but typically range from about one to four percent, with some moving up to 8% at current time!

Additionally, it’s a nice program as the tracking provides you payment for any item they purchase and not just for the item you sent them for.

Is Affiliate Marketing Easy to Start?

Affiliate marketing is easier to start than a traditional brick and mortar business due to less startup costs but it isn’t simple. Affiliate marketing relies heavily on getting website traffic whether from organic traffic, like Google, or from paid advertising, like Facebook and YouTube.

The easy part is in the low expense up front and the content generation but the cost will typically be in time that is spent waiting to experience results which is why many quit and call it a scam.

Is Affiliate Marketing Multi Level Marketing?

Affiliate marketing is not a multi level market. Multi-level Marketing (MLM) or network selling, which is also known as direct sales and referral advertising where you earn commissions for the products your referrals purchase from their own purchases of goods.

In addition you typically then gain commissions on those same items purchased by people who are recruited into the further downline chain which leads to selling “being a part of the MLM” instead of the goods or services.

MLMs have been around since at least Amway was founded over 50 years ago but they were never really regulated until recently when some states passed legislation against pyramid schemes.

This was due to many believing businesses listed as Multi Level Marketers, like Herbalife, has had its fair share with lawsuits alleging fraud because distributors make money off recruiting new members rather than retailing product themselves.

Final Thoughts on Affiliate Marketing and Pyramid Schemes

This is a frequent thing brought against any online business for over the last decade, for those who choose to really drill down and focus on building websites and learning affiliate marketing it can be a way to cut the cord from a traditional 9-5.

If you are interested but need more help and guidance on getting started and building your way into affiliate marketing there are two awesome choices you can make for courses, one is Project 24 by Income School which is very focused on new marketers.

The second choice for those a little more detail oriented would be to dive into the course offered by Matt G over on his website MoneyLab, both can help you start today and begin your journey to financial freedom from a 9-5!

Josh Koop

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