You might have heard of affiliate marketing and the first question that comes to beginners’ heads is the question “Is affiliate marketing a pyramid scheme” Now we will be discussing this question.
First off, affiliate marketing is not a pyramid scheme business and we will briefly explain in the upcoming paragraph.
Affiliate marketing is a profitable online business model that requires publishers (like You and me) to promote merchant’s products or services for a percentage of the sales (commission). In contrast, a pyramid scheme business is a deceptive and detrimental investment proposal that promises unreasonable profits on fictitious money.
In this blog post, we will dive into the question “Is affiliate marketing a pyramid scheme business”, and the differences between affiliate marketing and pyramid scheme business, and each of them in detail.
So, let’s dive right into it!
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Is Affiliate Marketing a Pyramid Scheme? A Point of Discussion
Bear in mind, affiliate marketing is not a lazy man business in other words get rich quick scheme. Before you get too enthusiastic about the potential of getting lucrative commissions through affiliate marketing, there should be more debate regarding this approach towards earning money. Affiliate marketing has been labelled as a pyramid system by certain skeptics causing quite a commotion in the digital business sector.
But come on, people, be sincere. When someone recruits people to join a referral program, those recruits pay cash to the individual who introduced them, who then gets a part of the money provided by their recruiters, and so on. This type of business is a pyramid scheme business.
Contrarily, affiliate marketing doesn’t entail referring or recruiting someone to join an affiliate marketing network or program. Affiliates, on the other hand, receive a commission on each sale generated by their promotional strategies. It’s a valid business strategy that has existed for decades and isn’t going away in the foreseeable future.
So, as am still saying affiliate marketing is nothing like a pyramid scheme business. Get the facts, so that nobody would tell you misleading information the next time. Affiliate marketing is for those who are willing to put in the effort. But truly speaking, Affiliate marketing is a genuine way to make money online, and a lot of successful influencers have made a lot of money using this business model.
If you’re still not convinced that Affiliate marketing is not a pyramid scheme, I will discuss the following businesses individually and also the differences between the following businesses.
First Off, What is Affiliate Marketing?
Affiliate marketing is a performance-based online business model in which the publishers (such as you and I) promote a business’s (merchant’s) products using a unique tracking link provided by the merchant so that they can track your sales using cookies and pay you your commissions.
How Does Affiliate Marketing Work
This is how it works: Affiliate marketing enables people or affiliates (like you and I) to advertise and sell products or services of the merchant of our choice in return receive a commission on every sale we bring in. Each time someone purchases using the provided unique affiliate link linked with a cookie and tracking code, the affiliate receives a commission.
In detail: You need to research the niche you need to focus on. When selecting a niche, you need to pick the niche that picks your interest and then wish to recommend some products to your audience.
Next, you join up to become an affiliate of companies, then they provide you with a special link to their goods or services. You’re to create content on your chosen traffic channel and then bring some eyes to your content for your audience to actually buy stuff via your affiliate link.
Commissions in affiliate marketing come in various methods. It comes in either percentages or flat rates. That’s why I always recommend my audience to sign up for Two-tier affiliate programs or high-ticket affiliate programs.
What is a Pyramid Scheme?
A pyramid scheme is a dishonest business concept in which participants are persuaded to pay a fee or “make an investment” in return for the chance to profit from the plan by enticing others to join them. In a normal pyramid structure, individuals at the very top earn the greatest amount of money whereas others at the bottom end up without anything to take in.
Pyramid schemes frequently fail once it ends up impossible to attract a sufficient amount of money, and new members to maintain the plan running, abandoning a lot of people with large losses in income.
One thing I despise about pyramid schemes is that they could crash anytime.
Understanding Pyramid Scheme
Pyramid schemes are dishonest business tactics that have been used for years. They are more concerned with recruiting fresh members than with selling items. In order to enter the system, participants are frequently expected to “invest” a down payment, which is usually used to pay the persons at the highest levels of the pyramid.
The assurance of quick money is a common way to get people to join the program, with an emphasis on recruiting fresh members instead of promoting items or services. Pyramid schemes are based on an unhealthy system that necessitates a growing number of new members in order to keep the plan running.
Difference Between Affiliate Marketing and Pyramid Scheme
The primary distinction between affiliate marketing and a pyramid scheme is the fact that as a publisher, you are not required to spend a cent upfront. Simply by selling a company’s goods or services, you can join an affiliate program with nothing more than an internet connection, laptop and traffic channel (such as a blog or social network profile).
The majority of the time, affiliate marketing looks to be worthwhile giving a try because there isn’t any risk associated and you could potentially earn a great deal of money if executed appropriately. Affiliate marketing is a transparent business while pyramid scheme is not.
I will provide the difference between affiliate marketing and pyramid schemes in tabular form so that it can be easily digested:
|Affiliate Marketing||Pyramid Scheme|
|Affiliate marketing is a genuine way to make money online.||A pyramid scheme is a fraudulent business model.|
|Affiliate marketing is a business model that does not require a down payment from affiliates to promote the merchant’s products. As an affiliate, you have the freedom to select and promote any product that piques your interest.||A pyramid scheme is a business that requires members to recruit new members, They get paid with the new money their recruits pay upfront.|
|In affiliate marketing, publishers get paid by the commissions they get by promoting products of the merchants of their choice.||In a pyramid scheme, the way they use to pay their members is by robbing the base members to pay the top members.|
|When working as an affiliate, you building a building a successful business from product sales||A pyramid scheme business is not built with false hope, knowing that the newly recruited members will not benefit from any single ROI.|
We’ve covered all you should know under the question “Is affiliate marketing a pyramid scheme” To be transparent I would say with full chest that affiliate marketing is not a pyramid scheme. Always bear in mind that with the right strategies, your affiliate marketing business will be successful. If this post was of great use to you, please feel free to share this content with those who are in need of it and drop a comment in the provided section below.
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Frequently Asked Questions (F.A.Q)
Is affiliate marketing the same as a pyramid scheme?
No. Affiliate marketing is nothing like a pyramid scheme because, unlike a pyramid scheme, affiliate marketing is a business built with transparency.
Is there really money in affiliate marketing?
There is truly money in affiliate marketing due to the fact that the commissions are paid from each successful sale.
Is affiliate marketing a legit side hustle?
Affiliate marketing is a legitimate side hustle that doesn’t require specialization to start. One thing I love about this business model is that you learn as you go.
Why am I not making money with affiliate marketing?
Why most beginners are not making money from affiliate marketing, is that they are heading into the business model with the wrong perspective.
Can affiliate marketing be done without a website?
Yes, affiliate marketing could be done without a website if you already have another successful traffic channel (such as YouTube, Social Media Platforms, and Email lists)
What is the most serious issue with affiliate marketing?
The most serious issue for me, when I started was getting traffic. In affiliate marketing, once you get eyeballs on your content automatically at least 10% of your audience will end up making a purchase.