Is Affiliate Marketing MLM?
Because affiliate marketing works so well and seems to genuinely benefit both the website that is advertising as well as the website that is hosting, people tend to look for problems that just don’t exist. One of the “problems” that has dogged affiliate marketing for years is the idea that is is a multi-level marketing scheme.
What is multi-level marketing? It’s much better known as a pyramid scheme. In most traditional cases, pyramid schemes are illegal. They work by constantly signing up new people to sell a product that doesn’t actually exist. The people at the top of the pyramid make money be collecting a commission off of all the sales that happen below them in the pyramid structure.
In recent years, pyramid schemes have tried to gain a bit of respectability by offering legitimate products like phone cards that made the whole operation legal. But, in essence, pyramid schemes are still tainted by the perception that they are inherently dishonest and, unless you start a pyramid scheme and are at the top of the pyramid, you’re earning money for someone else.
Affiliate marketing is, in no conceivable way, multi-level marketing. In most cases, a site that wants to advertise pays another site to direct traffic to them. There are multi-level affiliate marketing set ups that have one site direct traffic to another site and then that site directs people to the site that pays both previous sites, but even in this case, the customer isn’t tricked or misled and there isn’t any sort of financial transaction that takes place, either. Multi-tiered affiliate marketing is simply another way for web pages to create traffic and revenue.
The way earnings work for multi-level affiliate marketing is different than a pyramid scheme, as well. Is it true that in the end, the site that is being linked to makes the most money? Sure, but that’s because they are the ones offering the product or service. The other sites are simply steering customers to them. With multi level affiliate marketing, everyone makes money and assuming a legitimate good or service is being sold at the end of the path, the consumer ends up happy, too.
It can be a little confusing for those new to Multi level affiliate marketing to tell the difference between it and a pyramid scheme. But rest assured the two have very little in common, most importantly the fact that almost all pyramid schemes are illegal while multi level affiliate marketing is quite legal and a very effective tool in Internet advertising,
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Comments (10)
Salim Benhouhou10
IT Support
thank you peter for this article
Philippe Moisan16
Tutorial videos, sci-fi writer
No problem, Ricco, thanks for following my suggestion, you'll brand yourself better by writing your own articles and RevPages and post your links there. I delete my comment now, since it's now irrelevant. :)
Ricco Verial Malvadi...4
sory phil.. ;)
Peter M.7
Pro Internet Marketer
Korey, Network Marketing = Patience + Persistence + Non-Stop Promotion. Between ordinary and Extraordinary is that little "Extra!".
Philippe Moisan16
Tutorial videos, sci-fi writer
LOL not bad, Roosevelt, I invite you to write an article to explain what it means, if you do, send me the link, I will like it :)
Roosevelt Evans III10
Home Business Entrepreneur
Phillipe I believe we can sum it up this way, "All MLM businesses are affiliate businesses but all affiliate businesses are not MLM businesses, i.e. Clickbank.
Korey S.6
Internet Business Marketer
Let me know how your SFI Experience is. I unfortunately was not satisfied,.
Lynne Elliott Richar...6
Great post Peter but I must say I do agree with Roosevelt's comment.
Philippe Moisan16
Tutorial videos, sci-fi writer
Me, I prefer to think affiliate marketing is promoting products from places such as ClickBank. MLM or Network Marketing is also selling products but adds commissions from what your downline will sell. But I understand that many people agree with you, Roosevelt. I believe it confuses the whole thing, but that's me :)
Roosevelt Evans III10
Home Business Entrepreneur
"Affiliate marketing is, in no conceivable way, multi-level marketing." Peter, this is a great post about the difference between illegal pyramid schemes and legal MLM but that statement I have to disagree with. Most MLM businesses are also affiliate businesses using independent representatives instead of employees. Thanks for sharing,.