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,

Bruce Valentine is the CEO of a London SEO and Web Design company and he also runs some strong Web Directories including a deep links directory and an Internet marketing blog.