Earning Residual Income: Affiliate vs Pyramid Program

There is sometimes confusion about what exactly an affiliate program is and how a person can actually make money online and earn a residual income through one. Is a Pyramid program similar to an affiliate program?

The truth about Affiliate program:

1. Affiliate is an internet marketing model in which participating webmasters (affiliates) promote a merchant’s products and/or services on their web sites to earn a commission for generating clicks, leads, or sales from a graphic or text link to the merchant’s site.
You can participate as a direct affiliate through merchants, or as part of an affiliate network.

2. Affiliate programs offer a great way to build residual income. A person can be quite successful with an affiliate program if they work hard. They are not a scam and are a true way to make money online.

3. Affiliate programs is made to sell a product for a commission. Companies set up affiliate programs so they can get their product marketed by their affiliates. The company usually gives the affiliate a website where they send customers. The website is coded with the affiliates ID so that every sale made on that website is credited to them and they earn a commission off them.

4. Some affiliate program also allows affiliate to recruit new affiliates. Besides selling products, the website also gives people the chance to become an affiliate themselves. When people sign up on an affiliates website the affiliate then gets a commission on anything that affiliate sells.

Affiliate program is not a pyramid program

A pyramid scheme is a fraud based on recruiting an increasing number of investors. Typically, new recruits pay a sum of money to join the “program” and become a distributor of a product or service, and are told that they’ll make money based on the number of new recruits they in turn bring in. The basic idea is that the higher up on the pyramid you are, the more money you’ll make. In reality, what happens is that only the originators of the pyramid scheme make money and the rest lose theirs when the pyramid scheme collapses. Eventually all pyramid schemes collapse, as the recruiters on the lower levels fail to bring in enough new participants to support those above them.

People think that affiliate is a close resemblance to a pyramid scheme.

I am sure you had heard of a pyramid scheme. A pyramid scheme does involve recruiting people to sign up and making money off recruits, but the main difference, and the reason affiliate programs succeed where pyramid schemes fail, is that affiliate programs have an actual product to sell. There is value added to the consumers. If a program has a product to sell that is useful then they are affiliate programs not a pyramid scheme.