Is Affiliate Marketing a Pyramid Scheme?
New marketers will always ask the question, is affiliate marketing a pyramid scheme? When searching for information on, how to make money online you will eventually come across affiliate marketing. There are tons of ways to be scam in the make money online niche. Why are we more subjected to a scam is because it triggers an emotional survival response in our drain.
Affiliate Marketing can easily maid to be a scam or pyramid scheme but there are some key ways to separate the two. Pyramid schemes have a very unique pattern, first it has a personal recruitment base pay structure. The more people you recruit into the system the more money you will make. The central way of making money is not with selling a product, good, or service, but how many people you can get to join.
Compare that to affiliate marketing where the central part of making money is product sales and not people subscription. An affiliate marketer sales a product, most of the time an information product to people looking for that info and earn a commission for each sale.
This doesn’t mean there can’t be scheme and people looking to scam you. Just by simply doing a little research and you will avoid the vast majority of these scams.
Pyramid Schemes. What are They?
A pyramid scheme is illegal because it is a type of fraud. It is a business model that involves the exchange of money primarily for enrolling other people into the scheme rather than supplying any real investment or sale of products or services to the public.
Let’s define them. A pyramid scheme is when you pay to join, and then you must find others to join under you (usually by purchasing a starter kit) and those people must find people to join under them and so on. The only way to make money in a pyramid scheme is by recruiting more people into the scheme.
The defining structure of a pyramid scheme is that members obtain commissions based on enrolling other people. The only way to earn money in a pyramid scheme is to be an early investor, and then convince others to invest after you. This makes them incredibly risky, and most participants lose money.
Pyramid Scheme Programs
The FTC defines a pyramid scheme as one that requires an endless chain of recruitment to make money. The FTC says any multilevel marketing plan that pays commissions for recruiting new distributors but doesn’t require selling products to the public is a pyramid.
When a new member joins they pay a fee to the existing members, who then pass a percentage of that fee up the chain. This means that to make money you need to convince other people to join and then convince them to bring in even more people. If you’re looking to get started in online marketing and you want to protect you time and money, make sure you do your research first. It can be easy to fall for a scheme in today’s digital climate. So you must be to check the programs you are joining.
Pyramid Scheme Begins
Pyramid schemes have existed for at least a century in different guises. Some multi level marketing (mlm) plans have been classified as pyramid schemes. Make sure you look at a company payment structure before joining.
Pyramid schemes are not a new form of business model. They have been around for many years, but have risen to prominence recently due to their use on the internet. They have taken advantage of online advertising and marketing in order to gain more members, and it is believed to be the main reason that many people are unaware that they are engaging in an illegal activity.
The most notorious modern example of a pyramid scheme is Enron, the Houston-based energy company that collapsed in spectacular fashion in 2001 after it was revealed that executives had cooked the books to hide billions of dollars in debt from failed deals and projects. The company used off-the-books partnerships to hide debt, while inflating profits with fake accounting.
Enron’s collapse cost its thousands of employees their life savings. And when Enron’s stock price plummeted, it wiped out $74 billion in market value, making it the biggest bankruptcy in history at the time (Lehman Brothers would surpass that dubious distinction after the 2008 financial crisis).
What is Affiliate Marketing?
Affiliate marketing is one of the oldest forms of marketing wherein you refer someone to any online product and when that person buys the product based on your recommendation, you receive a commission.
Affiliate marketing is a legitimate way to earn some extra money by promoting products or services offered by other companies. You can even combine affiliate links with existing affiliate programs like Amazon or Clickbank to boost your earnings even more.
Most people start out selling other people’s products, also known as affiliate marketing, but eventually branch off and create their own products to sell. Affiliate marketers in particular tend to be successful because they know how to find great products that offer true value for their customers. They also know how to promote them effectively without spamming their subscribers, which results in stronger relationships with customers and more revenue over time.
As an Affiliate.
Affiliates promote products they don’t own or create themselves. They are then paid a commission for each sale made. You can earn commissions by recommending other people’s products to your audience.
Affiliates are not alone in the world of online marketing. In fact, they are part of a wider ecosystem. This ecosystem is made up of the following online marketing entities:
Advertisers – retailers who sell products and services through their websites, typically via e-commerce or m-commerce channels.
Publishers – individuals, companies and organizations that promote products on behalf of advertisers in return for a commission on every sale they generate. Publishers include affiliates, but also bloggers, vloggers, social media influences, webmasters and more.
Affiliate Marketing Program
Affiliate marketing programs are referral programs through which a publisher (or a blogger) earns an affiliate commission by marketing a business’s products.
To get started with affiliate marketing, you:
1. Find an affiliate program – use Google and search for the company name plus “affiliate program”
2. Sign up for the program with your email address
3. Receive an affiliate link (also called an affiliate ID) from the business you signed up with
4. Post on your site or blog
5. Earn a commission when someone clicks on your link and purchases the product or service offered by the business you’re affiliated with.
List of Affiliate Programs to join:
Click Bank: Clickbank is the largest Affiliate Program today. They have a host of digital products to promote from health to make money online. Finding the the right link to promote is quite easy and the sign up process is quick.
SEM Rush: SEMRush is an SEO tool for digital marketers. The tool is used for keyword research, site audits, content analysis and much more. SEMRush offers a 40% recurring commission to their affiliates on each sale.
Get Response: Get Response is a email marketing system that allows you to build and email list.
What to look for when starting affiliate marketing?
A key sign to looking for legit affiliate opportunities is how long that affiliate offer as been around. The older the product the greater the chance it is has a solid reputation and its a real opportunity. A good rule of thumb would be, the 1 plus year rule. If the product is older than 1 year sense being created than it will increase the legitimacy of the product.
Another tip to finding good affiliate offers is a market place. There are affiliate marketplace that provide real offers for sale. These marketplaces has really done all the leg work of researching affiliate programs for you. Clickbank is the largest affiliate marketplace on the internet and they have a large variety of offers in just about any niche. This is the starting place for most people looking to start doing affiliate marketing.
With a quick google search you will fond tons of affiliate marketplaces to join, they all have different enrollment requirements for joining so make sure you research them before spending your important time with enrollment.
Affiliate Marketing Tips.
Here are a few Affiliate Marketing Tips to help you get started. Affiliate marketing can be a very profitable and enjoyable way to earn money from your website. Below are a few tips that will help you make the most of your affiliate marketing efforts.
Tip 1# Choose a niche that makes money
Tip 2# Build your Email list
Tip 3# Do not only promote high ticket products.
Tip 4# Track everything know what works and what doesn’t.
Tip 5# Make Great Content
How affiliate marketing pays?
How people make money doing affiliate marketing is simply supplying customers to the product that’s for sale, and then the creator of that product pays you a commission for that sale. A commission payout rates for 40%-75% of the product sale price.
There are a lot of chances of earning big commission per sale of a product. People create digital products and will give a large part of the sale to affiliates. Why give these big commission to start? The main reason to pay large percentages of the sale is because affiliates take on the leg work of advertising. This allow product creator so streamline their profits by creating a digital product once and simply earning from that product over and over with no addition cost.
Removing advertising cost for any business is the best way to maximize profits. So creator know the baseline number per sale they need, to turn a profit for their digital product. They recruit others to do the heavy lifting of slain the product for them and they earn money, win-win. This allow an opportunity for anyone looking to make extra money a chance to make money without investing in product creation and just focus on sale.
In the end, affiliate marketing is a real business model. However, it may not be right for everyone (or every site), but a lot of people find success due to the freedom you have in your business. You can set your hours, choose your niche, and so much more.