Is Affiliate Marketing A Pyramid Scheme? The Truth.

If you are looking for ways to make money online or to start a side hustle then you’ve probably heard about affiliate marketing as a business model.

A lot of people are skeptical about the legitimacy of affiliate marketing. If you are one of these people, or perhaps you’re specifically wondering if affiliate marketing is a pyramid scheme, then this article is for you.

Also, if you are interested in learning how to go from zero to a full-time income with affiliate marketing, check out this FREE 100-day Affiliate Bootcamp.

In this article, we will answer all these questions and more…

Affiliate Marketing Vs Pyramid Schemes?

So, is affiliate marketing a pyramid scheme? No, Affiliate marketing is not a pyramid scheme. Affiliate marketing is simply the act of sending traffic and more importantly referring sales to another company’s or person’s product in exchange for a commission.

This is very different than a Pyramid scheme, which you see described as the following by the Federal Trade Commission:

“Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.” – Source

Sometimes people use the term pyramid scheme to describe legitimate multi-level marketing or network marketing opportunities because these business opportunities include recruiting other business owners to grow your income. While these opportunities may not be illegal like an actual pyramid scheme, the resemblance in structure often leaves people to use the terms interchangeably.

Most of the largest companies in the world offer an affiliate marketing program. This includes companies like Amazon, Best Buy, and Home Depot, and the list goes on and on.

Affiliate marketing is a tried and true method of driving traffic and sales to your product or service since you only pay for performance. This means that as a company you don’t have to pay for the traffic itself, you only pay affiliate commissions for sales that you make from the traffic. It can be a great complement to other methods of driving traffic, such as paid advertising and organic SEO.

Is affiliate marketing legal?

Yes, affiliate marketing is 100% legal. As we said earlier many of the biggest companies in the world use affiliate marketing to drive sales. In fact, statistics suggest that the affiliate marketing industry accounts for 12 Billion dollars a year. Source.

With that being said depending on the country you are in, you want to make sure you follow all the rules to ensure you aren’t employing any improper marketing tactics.

For instance, in the United States, the FTC requires affiliates to have a clear affiliate disclosure when they are promoting products or brands for compensation. You can read the FTC affiliate disclosure requirements here.

Is Affiliate Marketing A Legitimate Business Opportunity?

Affiliate marketing can absolutely create a full-time income or more if you stick to it and apply solid marketing strategies. Like any business opportunity, it takes consistency and hard work to be successful.

There are endless niches and products to choose from when it comes to affiliate marketing. Once you select your niche and products to promote, it’s really about referring traffic and sales to those offers.

There are countless ways to send traffic as an affiliate marketer. If you want to learn more about 21 common affiliate marketing mistakes that could be keeping people you from making money.

Also, if you are interested in learning how to go from zero to a full-time income with affiliate marketing, check out this FREE 100-day Affiliate Bootcamp.

Conclusion About Affiliate Marketing Legitimacy

Affiliate marketing is 100 percent legal and a legitimate way to make money online. It is not a scammy get rich quick scam, nor should it be confused with a pyramid scheme or network marketing.

Some, affiliate marketing programs offer multiple tier commissions, but the revenue in legitimate affiliate marketing programs is made from referring sales not recruiting other affiliates. Also, most affiliate programs are free to join and you should not need to pay money to promote a product or service.

Like any other legitimate money-making opportunity, results will vary. Companies like the Wirecutter which ran huge affiliate marketing sites were sold for sums of 30 million dollars. Others never make a dollar with affiliate marketing.