Affiliate marketing may have a bad reputation, and you may wonder if it’s a pyramid scheme. You may be curious about how it benefits society and the different ways to do affiliate marketing.
Affiliate marketing is NOT a pyramid scheme. It’s a way to refer people to a merchant and make extra money.
Keep reading, and I’ll share how affiliate marketing can be both good and bad for society.
I’ll share the three main ways to do affiliate marketing and advanced methods. Plus, I’ll share what a pyramid scheme involves.
What is a Pyramid Scheme?
A pyramid scheme is when someone is compensated by referring people. The person who is recruited pays money to the person who recruited them.
A pyramid scheme is similar to a multi-level marketing company because they both recruit people.
The main difference between an MLM or multi-level marketing company is that there are actual products and services.
If there were NO products and services being sold, then it would be a pyramid scheme.
Affiliate marketing is not a pyramid scheme because actual products and services are being marketed.
When someone buys a product, the marketer gets compensated.
Think of it like you were buying a home, and a real estate agent helped make your dream home a reality. That real estate agent would get compensated for helping you.
One of the most famous cases of a pyramid scheme is Bernie Madoff. Bernie Madoff pretended to invest people’s money, but he used it to pay other people.
There were NO products and services involved, and eventually, the pyramid collapsed, and many people were hurt.
I saw a documentary about it, and it was crazy. Sadly the people that got out early where court ordered to repay the people who lost money.
More craziness is that Bernie had a very successful, profitable, and legit business with the pyramid scheme. Why did he do the pyramid scheme?
Too greedy!
The reason pyramid schemes are bad is because there is just too much greed. There are no actual products and services that help people.
One of my favorite sayings is…
“A pig gets fat and a hog gets slaughtered.”
Uknown
This means a little greed is ok, too much and it’s not good.
In the end, too many people get hurt with pyramid schemes, so society views this as something it doesn’t want.
It’s the same with drugs. If a drug provides more benefits than negatives that it would be legal.
Coffee used to be illegal, but so many people enjoyed drinking it, and the benefits outweighed the negatives, so it became socially acceptable.
Now, there are coffee shops everywhere.
What Affiliate Marketing Truly Is?
Affiliate marketing comes down to being helpful. You’re sharing something that can make a positive difference in a person’s life (at least you should be).
You get compensated by providing a benefit to someone’s life.
A part of this also has to do with entertainment. Everyone needs some escape in their life, and mixing entertainment with being helpful is this business.
Another way you can be helpful is with education. By helping someone understand a concept, you can make a positive difference in their life.
In the simplest terms, the definition of affiliate marketing is posting a link, and if someone clicks on that link and buys a product, you get paid.
There are even ways to earn money without a sale, and this is called cost per action marketing. Maybe someone clicks on your link and fills out a form with their email address.
A company can pay you for this lead. The main reason affiliate marketing is NOT a pyramid scheme is that there are REAL products and services involved.
Also, usually you’re not recruiting a person to join your pyramid.
How Affiliate Marketing Benefits Society?
When done correctly, this type of business is a benefit to society.
You’re sharing information and ideas that can make a positive difference in someone’s life.
It’s very similar to you viewing the best movie ever. Now, you’re excited, and you see your friend for lunch.
If you were a selfish asshole, you wouldn’t share the BEST movie ever with your friend, right?
If you were truly looking out for your friend, then you would want to recommend the movie. The movie made a positive difference in your life, so you want to do the same for your friend.
Your friend appreciates that you were thinking of them, and you feel good because you were being helpful.
Why Affiliate Marketing has a Bad Reputation?
Affiliate marketing can also be abused, usually if someone gets too greedy. One way it can be abused is with spam.
Not everyone agrees with what spam is, but most people would agree that it’s NOT helpful. One example of this would be spam in comments.
Maybe someone made a video about raising a puppy, and then a comment comes up pitching an affiliate program for hosting.
Most people watching the video are not interested in hosting. Now, if the comment was about puppies and the link was genuinely beneficial to the community, this would be different.
Spam is similar to walking down a street and hearing all the cars honking. You can deal with it, but it’s just annoying. It doesn’t improve the environment.
When an affiliate marketer spams comments, it gives the business model a bad reputation.
Another approach that can give this business a bad reputation is when a marketer promotes a product that isn’t good.
It’s good to ask yourself..
- Would you promote this to your mom or a close friend?
- Do you feel guilty if you don’t share it?
- How does it make you feel promoting the affiliate product?
If something is off, then it’s ok to pass.
This comes down to morality. To be fair, every profession has shady people who only care about themselves.
Lastly, perhaps someone purchased a product online and had a bad experience.
They then blame the marketer, and this can add to affiliate marketing getting a bad reputation.
3 Different Approaches to Affiliate Marketing
There are 3 main approaches you can work with affiliate marketing.
- Blog
- Youtube
- Other SocialMedia
One way is by creating a blog and writing about a topic.
Your posts will get traffic from Google and other search engines. Then, in your blog posts, you can share helpful products.
When someone clicks on one of these products and makes a purchase, you will get compensated.
This method does work, but it’s very slow. It can take a blog article 5-10 months to fully get ranked in Google. Also, you’re relying on Google, and this can be risky.
To make blogging less risky, you can repurpose your content on other sites such as LinkedIn, Medium, Quora, Substack, Tiktok and others.
The second way to do affiliate marketing is with YouTube.
You can create a YouTube channel around a niche. In your video, you can market a link in the description of the video.
When someone clicks on the link and makes a purchase, you can get paid. YouTube also takes time, but you can get visitors faster and thus earn money more quickly than a blog.
The problem with Youtube is your playing in someone else’s sandbox!
Yep, you don’t OWN the sandbox, and this is risky because YouTube can remove videos, put ads anywhere they want, or hurt your rankings.
The third way to do affiliate marketing is by using other social media. Yes, you can promote affiliate products using popular social media platforms such as Facebook, Twitter, Pinterest, LinkedIn, TikTok, and many others.
I’m a VERY large fan of short videos.
All you need is a phone; they are easy to make, and the editing is very fast and fun. Plus, you can download the video and repurpose it for more views.
Yes, you get lots of views for little effort.
I go over more in detail in this post HERE.
What is fun about affiliate marketing is you can stick to 1 method or you can mix others in.
There is a lot of flexibility and creativity that can make this business FUN.
Also, there are WAY more strategies, such as eBooks, paid ads, Substack, and more!
Advanced Affiliate Marketing
One of the more advanced methods is to use email.
Yes, you can get something called an autoresponder service and send out emails that market a product. One of the many benefits of using email is that you own the list.
This means you can market products to someone years into the future if you want. Also, your conversion rates can be much higher.
The reason your conversion rate can be higher is that you can contact someone multiple times for an affiliate offer. You can also create more urgency using your emails.
Plus more benefits such as…
- Can promote multiple offers
- Can contact someone WAY in the future
- Promote your other content
- Do list swaps
- Easier to get accepted into affiliate programs
- Great for launching products
- Get valuable feedback
- Protects you from algorithmic changes
- More personalized marketing
Even more good news is that I’m giving away a few FREE guides on building a landing page, how to grow a list, and earn money from a list for FREE HERE.
Another advanced method is to use a podcast. To do affiliate marketing with a podcast, it helps to own a domain name that passes the radio test.
This means if you say your domain name, someone can easily spell it. The,n what you can do is tell people on your podcast to view your website and to type in the domain name directly.
When someone visits your website, they can click on an affiliate link, and you can earn money this way.
Some podcasting platforms can support a link in the description of your podcast episode.
Anchor.Fm submits your podcast to many other platforms, and here is a list.
- Spotify
- Apple Podcasts
- Castbox
- Google Podcasts
- Overcast
- Pocket Casts
- RadioPublic
There are many other approaches and methods to do affiliate marketing. The main thing is you’re trying to be helpful and share products that you care about.
In conclusion, nearly every method can work; you just have to stick with it long enough and not quit.
I hope this post on whether affiliate marketing is a pyramid scheme was helpful to you. Have a nice day.