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Fake Affiliate Marketing Companies. Be on the Lookout.

Fake Affiliate MarketingThere are many companies and individuals out there deeming themselves to be within the affiliate marketing space, operating an affiliate marketing business, and worse, stating they are affiliate marketing experts…when they are not.

In this little rant here, I want to explain what affiliate marketing is, what it certainly isn’t, and what to look for when aiming to determine if an individual or company is misleading you about whether they are “affiliate marketing”. There are a lot of fake affiliate marketing companies out there and they are having an adverse impact on the affiliate marketing industry as a whole, so I want to bring some clarity as to what is affiliate marketing and what is not.

The Biggest Emulator. The MLM Bait and Switch.

The biggest trend we are starting to see is companies and individuals indicating they are operating an affiliate marketing agency, when in reality they are using it as a mask to cover up the fact that they are an MLM (Multi-Level Marketing) scheme.

Not to say there is anything wrong with some MLM companies, there are definitely some legitimate ones out there. However, you can almost assume that any MLM that is trying to say that they are affiliate marketing is running an unethical operation, and borderline (if not) illegal one.

There have been several take downs by the FTC in this space, with many more to come. It is my hope that they continue to tackle all the misleading programs out there operating businesses that are built around people joining and paying money, for the ability to promote that same program to others. That is the most common type of scheme that you see, with most people within these schemes losing money (95-97%).

There are some traits that you can look for in these programs that will be a key decider

  • Anything With Multiple Levels is NOT Affiliate Marketing. Affiliate programs are single level. If you are part of a program with 3 or more levels (including you), these are deemed multi-level marketing schemes. This is NOT affiliate marketing, in fact far from it.
  • Anything Where the Goal is to Promote the Same Program to Others. If you join something, or you have to pay for a program simply for the opportunity to sell that same program, then you are not getting involved in affiliate marketing. These companies have the tendency to call their “participants” affiliates, when in reality they are a notch in the MLM scheme and they are in reality network/multi-level marketers.
  • Anything High Ticket ($2,000+). The most common trait of “fake” affiliate marketing impersonators are those that are charging $1,000’s for information. If these companies offer $1,000’s in commissions, they are almost certainly operating their business in a way that relies on “baiting” participants with high compensation. These companies usually end in demise (or in the hands of the FTC) because their goal is to rip a few people off for $1,000’s to earn lots of money, versus actually offering a quality service to people for a realistic, market driven cost.
  • A Facade Entry Point Price. You will often times see a program actually offering an entry point into their program that operates in a true affiliate marketing fashion. However, once you join at the $49/$99 level of the program (or some smaller amount), you are encouraged to join at a more expensive level or BUY into some sort upline/downline platform, you have been misled and tricked to think you are affiliate marketing. This is a simple facade that has been set up, but in reality you are joining in on an affiliate marketing scheme.
  • Has an Income Disclaimer or Compensation Plan. All MLM companies are required to have a compensation plan as well as an income disclaimer on their website. If you scroll down to the bottom of the page and you see either of these, the given program IS NOT an affiliate program or affiliate marketing. It is an MLM.
  • There is a Cost to Join. Affiliate programs are free to join. If you have to pay to join an affiliate program, you should be skeptical. Some companies have a small, nominal fee to prove that you are real, but if you are paying $99 to join an affiliate program it is NOT an affiliate program.

What Affiliate Marketing Really Looks Like

OK, so now that you know what affiliate marketing is not, what is affiliate marketing? I have explained it in detail on the following affiliate marketing breakdown page already, but I want to show you two side by side examples of a program that is affiliate marketing, and one that is not.

Affiliate Marketing vs Fake Affiliates

The diagram offers you a good breakdown of the differences between real affiliate marketing, and the companies that are pretending to be affiliate marketing.

Affiliate marketing is the relationship between an affiliate, a company selling products and/or services online, and a customer. As an affiliate, you can add affiliate links on your website or elsewhere, and if someone subsequently clicks on your link and buys something, you get a percentage of gross sale. This typically ranges between 1% and 75%, and will vary from company to company.

For example, if I run a website dedicated to selling “golf equipment” and I link off to Callaway to their website through my affiliate links, they will pay me 6% commissions for any sales that I drive to them. This allows Callaway to in essence have 10,000’s of people, across the internet simultaneously promoting their products.

As an affiliate, it gives me the opportunity to potentially promote MILLIONS of products through my websites, social channels and email and earn a great deal of affiliate income in the process. It is a brilliant business model and one that is only continuing to grow online, but there are a lot of companies abusing the word “affiliate marketing” when in actuality they are an MLM or worse, a pyramid scheme.

Affiliate programs are not multi-level, nor do they require you to pay money in order to promote a product or service at a particular level. If someone is trying to get you to join something that is multi-level or that is paid, it is NOT an affiliate program.

There is a proper process, and a proper ethical procedure that all successful affiliates are following these days, and I am going to take a minute to explain this.

Establishing Yourself as An Authority Marketer

There is a right way to create a sustainable and long term business online, and there are many wrong ways. I am not going to focus on the wrong ways, rather the proper way. Becoming an authority.

The most natural way to do this is to choose something that you are truly passionate or interested in and build a business around this. That is not the only way, but it is a great starting point. That way you can truly build a business around something that you love to do.

Let’s say I love basketball, which I do, I could create an entire business and work to become an authority website in a particular segment of the broader basketball category. Let’s say, Basketball Skills and Drills.

I would then build a website, and start building out the content, all while being able to integrate relevant promotions into my website through affiliate programs. There are all sorts of things that I could promote in a niche like this, some examples would be:

  • Amazon (1,000’s of products related that pay 6% commissions)
  • Ballers Institute Skills Guide/Training (pays 51% commissions)
  • Vertical Jump Bands (6% commissions)
  • JumpUSA (15% Commissions)
  • And 100’s more

This is just brushing the surface, as I build out my basketball skills website and discuss many topics within this niche, I will be integrating highly relevant and useful product/service recommendations to my audience. Through time, I could have 100’s or 1,000’s of pages on my website, driving 1,000’s of unique visitors to my website daily, generating far more than a typical full time income ($1,000’s per day).

To grow your business, you scale your content and traffic. That is the approach that can be taken within any niche, and that is the most scalable and lucrative way to build a thriving affiliate marketing business. So whether you are interested in building a mommy blog, a cats and dogs website, a tech gadget website, a knitting site, sports related site, or a hobby car website, there are literally 100,000’s of directions that you can head.

That is the reality of the affiliate marketing business, and that is how affiliate marketing works. If you are interested in building a thriving affiliate marketing business, there is only ONE place in the world that you should consider, Wealthy Affiliate. It is a community & platform that offers an “all-inclusive” environment with the training, live classes, research tools, websites, hosting, coaching and networking under one roof. Get more info here.

I hope I have offered some clarity on the differences between the REAL affiliate marketing opportunity, and those companies and individuals out there pretending to be affiliate marketing when they are not. I would love to hear any stories you have had, or if you have any questions about the legitimacy of any program (or affiliate marketing in general) I would be more than happy to help you out.

 

 

 

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Kyle

12 Comments

  1. Kyle, I deeply regret ever leaving Wealthy Affiliate. I got taken in by the promises of Anthony Morrison, and his focus on making money quickly. This has costed dearly, both financially and emotionally. How do I come back into WA? I have learned my lesson well that there is no quick way to financial riches, and if that is what is being promised grab your wallet and run! Hopefully I can recover some my money, but it is not looking promising.

    • You can resubscribe to Wealthy Affiliate at any time by logging back into your account, and you can reconnect your training, your profile, your network instantly when you resub.

      Unfortunately there are a lot of companies and individuals out there in the industry that are in the business of using “People” as a vehicle to make as much money as they can, without offering sufficient value in return. You will see this with the “high ticket” model, companies charging several $1,000’s for info products, conferences, masterminds and training.

  2. Hey Kyle,
    I’ve been through scams before and I learned my lesson before I started looking into affiliate marketing companies.
    It was easy to spot most of the fakes because as you pointed out they were always asking for money upfront and not concerned about helping people first.
    The MLM companies and others that were asking for so much money upfront just made it so obvious that they were not legitimate.
    When I found Wealthy Affiliate I didn’t hesitate one bit. It’s the one company that is real to me and doesn’t “hide” anything. It’s all about building a website around a niche around something you love and are passionate about. That’s what convinced me it was the real McCoy!
    Do you have any one particular red flag for folks for trying to avoid the fakes or are they all equally important?

    • One of the biggest standout red flags in my opinion is when “money” is the ultimate goal within the marketing, without any explanation as to how you are going to earn it.  There is all sorts of facades and motivating videos of people on a beach, driving nice cars and partying, but there is no explanation of what you will actually be doing. 

      This is almost certainly going to be a scam, or some sort of MLM scheme…and often times a small, low ticket purchase is going to be followed up with a high ticket one. But all of these affiliate marketing “scam clues” are very important and are good indicators that you may be getting involved in a scheme, not a affiliate marketing business.

      One thing we have always believed in is offering VALUE and being up front and honest with your audience about the process and what you are offering them, before you ever ask for a penny.  That is why we have our free Starter membership, and why WA continues to lead the industry in terms of ethics and trust. 

  3. Hi Kyle,

    Before I stumbled wealthy affiliate I joined other affiliate marketing company, I really believed that it’s affiliate marketing when i was a new member, they have an affiliate program but the program is just promoting their company and their core products, they don’t have program teaching members to be a real affiliate marketer. They have different core products at different prices, and you need to upgrade your level to learn other training about affiliate marketing or should i say how to recruit new members, If you are just in a first level what you can learn only is driving traffic using Facebook and how to use and pay Facebook ads. 

    Their training is very basic and no value and if you are just a new member you can edit the income of their top earners to make your audience believed that you can really earn to their company. The commission is depended on your level too, that is why they want all new member to position yourself to a higher level to get more commission from your recruit. 

    I decided to leave that company after I finish the basic training because it’s very clear that they are not affiliate marketing even if they insisting that they are not MLM or pyramid. 

    Your article is very helpful especially to people who don’t know the difference between affiliate marketing and MLM, and I’m so thankful that I stumbled WA and I joined right away after reading all good reviews and read about affiliate marketing business.

    • That is exactly what I am referring to.  That is an MLM and that could in many countries, states, and provinces be deemed a pyramid scheme.  Unfortunately,  unscrupulous companies like this are presenting themselves as though they are “affiliate marketing” and thus, giving the rest of the  industry a completely bad name.

      Feel good that you rid yourself of this program before it is too late.  Any program that encourages you to join a higher level, in order to earn higher commissions at that level is bound to eventually get  taken out by the FTC for fraudulent business practices and this is something that we have seen a great deal lately.  

  4. Hi Kyle; I had fallen victim to illegal offers more time than I care to admit. It was at the time when I had nothing left for these heartless ones to take; the anger that grips me pushes my eyes open so that I decided to send somebody to prison if I could.

    I was in a range; searching Google for that type of help when I stumbled upon keywords that promote Wealthy Affiliate. I immediately identify the difference as I opened the Link. Angry though I was; as I read through the signup information I knew that it was a business for real and not anything fake.

    I signed up for free, I do not make money as yet, but I am sure it will happen.

    Thanks, Kyle for such a fantastic opportunity wherein whosoever will, can become a real entrepreneur doing business

    DorcasW

    • You can either be angry and consumed by  past mistakes, or you can focus on the positive an exciting future you have ahead of you in the affiliate marketing world. I am glad you chose the latter.

      There are enough scams and schemes within the online world that they could fill a large container ship, but as a customer when  you understand and know the traits to avoid with these types of schemes, it really makes it much easier to dodge them.   I am hoping that many of these folks will also get the opportunity to read this,  so  they can truly understand the differences between legitimate affiliate marketing, and those companies that are pretending to be in the affiliate marketing space.  

      Thanks for stopping  by.  

  5. Hi Kyle, I am glad that you took some time to elaborate on this topic as I’ve personally encountered a few MLM companies online that are promoting themselves the affiliate way. It’s kind of confusing because that wasn’t what I learned about inside WA’s training. Now I have more clarity on what’s going on.

    On a side note, it appears that some long standing MLMs are starting to adopt the affiliate way rather transparently. For example, I noticed that Avon is now a partner with CJ network while still maintaining their direct representative channel. I wonder what’s your take on that. Thanks.

    • I have noticed that as well. There are MLM’s that have a singular component of their business that is affiliate marketing.  Often times you see a front end price point or offer that is lower ticket, and this is purely commission based like affiliate marketing.  But when people do join, they are actually getting involve in a multi-level program and then the trickery begins.

      Companies like CJ are in the business of providing their software and network for companies that want to expand their business in a performance marketing manner.  I am sure they don’t have an ethics team or a team dedicated to screening programs in too much detail, and many would argue that Avon is completely legitimate as they have been operating or many moons now, they  have a tangible product.   What they are not is affiliate marketing, but I also think they are using  CJ to get leads, versus trying to use that network to try to portray themselves as something that they are not. 

  6. I’m fortunate that I have never been conned into signing up for a fake MLM scheme. I must say I have been plain lucky because I almost did on two occasions. Like you said, not all MLMs are bad if they sell themselves as affiliate marketing companies, then there’s a serious issue here. They are poles apart and I’m glad that you have explained very clearly the difference between the two. But these days, they do all the clever stuff and with guile, they even manage to blur out the difference. To a wide-eyed newbie, the bait is enough to coax them into their scheme which is similar to a hit-and-run case. The end result is, you are left all high and dry and with a serious dent on your optimism. Thanks for a nice post.

    • You are definitely one of the fortunate ones, too many others have fallen and are still falling into these traps.  The problem is that too many of  them are deeming themselves as affiliate marketing, when in reality their programs are about joining so they can force them into promoting the same product,  or they have some hidden MLM scheme in the back office of their sites. 

      The purpose of this post was to remove the “blurred” lines that are being created by unscrupulous marketers out there and educate others on the industry.  If I can save just one person from being scammed, I have done my job!

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