Is Affiliate Marketing a Scam?

February 9, 2021

Kenneth Holland

Here is a question I have been asked countless times over the years:

"Is Affiliate Marketing a Scam"?

When something is not understood or garners a questionable reputation (deserved or not), it becomes an easy target for criticism and is often dismissed.

And with the inherent 'anonymity' of the internet, people cannot always separate the legit from the nefarious.

Such can be the perceived case with affiliate marketing.

I am here, however, to show you not only is affiliate marketing not a scam, but that it is a tried and true business practice that is only growing in our world of commerce and marketing. 

Furthermore, I will show you what to look out for so you don't get burned, as well as a few very simple guidelines to always use when promoting an affiliate product or service. The end result is you'll make more money...you'll avoid the scammers and you'll create a stellar reputation as a result in your niche.

Any 'armchair marketing whiz' who claims it's a scam does not know what they are talking about. Pure and simple.

This business has been around for decades and accounts for BILLIONS of dollars every year in revenue and is used by THE most reputable companies in the world.

It's important that you understand what affiliate marketing really is so you understand that this business model has been around since the beginning of business. 

Is Affiliate Marketing Illegal?

Firstly, let's dispel the frankly ridiculous notion bandied about in some corners that affiliate marketing is somehow illegal.

It is not. And the ones rubbing their chin around the water cooler claiming that it is are morons.

is Affiliate Marketing a Scam - Guy Juggling Camera Lens

In its simplest form, Affiliate marketing is merely the owner of a product and/or service giving a cut of the profits of said product to whoever is selling it for them.

An example: You are the affiliate, and you are selling a pair of socks for the owner of those socks. The owner agrees to give you 50% of the sale price of the socks.

That's it. All affiliate marketing really is an agreed upon revenue share.

Any salesperson who works on commission is an affiliate. This method of doing business (as you no doubt realize now) has been around forever.

Is Affiliate Marketing a Scam: Why 'Scams' Seem to be Common in This Business

It's important to remember that a lot of online businesses of ANY type get viewed with suspicion. The simple reason: Unscrupulous individuals use the 'benefit' of anonymity (as I alluded to earlier, aka...hiding behind a computer).

Before the world wide web people did business in person. Storefronts were the norm and if you didn't do business physically you had to speak to someone on the phone.

With the advent of the computer...and now smartphones, the 'old way' of transacting business is dying. As a result, we are forced to find new ways to trust the person on the other end of the deal.

Affiliate marketing is simply one way of doing business so really the shadiness comes down to the person using it as a tool of deceit. It's no different than someone selling you a new car, then when you get home you find out the car has a used engine that does not work.

So is the selling of cars a scam?

Is Affiliate Marketing a Scam - An Infographic

Companies every day are adding affiliate marketing to their business arsenal as they see the clear advantages (almost no advertising budget is needed) in using it.

As an entrepreneur/independent agent it is up to you to do your due diligence with the companies you partner with and the customers you sell to. This is your job and it must be taken seriously...if you want to be taken seriously.

is Affiliate Marketing a Scam - Amazon Affiliate Program

Do you think Amazon would use a business model if it were a scam or illegal?

Could they even begin to get away with it even if they wanted to? 

What to Look Out For

Affiliate Fees...When They Should (and When They Should Not) Be Expected

In most cases, a product owner/vendor should NOT charge you a fee to be an affiliate for their products. After all, you are potentially bringing them sales so ideally they would want to reduce the barrier of entry.

However, there can be exceptions: If you are securing resale rights for a product (which is often different than affiliate marketing) then there is usually a fee. That is beyond the scope of this article.

If you're a beginner or a novice then you'll want to stick to the conventional affiliate model and promote conventional affiliate programs.

Affiliate Fraud

Affiliate Marketing fraud is a very real thing, and fraud runs rampant in every industry unfortunately. But defining this can be misleading...

To give you an example, The Journal of Cybersecurity published in-depth data that reported 38.1% of Amazon affiliates engaged in some form of affiliate fraud.

It's important to note here that 'fraud' can simply mean incentivizing web visitors to click an ad or buy a product. Some of these actions can also be called 'fake clicks' in order to 'boost' an affiliate's stats with the vendor. And while unethical, it hardly falls in to the category of trying to take someone's money.

Affiliate Marketing Scams...Aka Get Rich Quick

Nothing hurts any industry more perhaps than over-hype. In our case common affiliate marketing scams usually fall in to the same category:

Easy money...or 'Get Rich Quick'.

Unsubstantiated claims of quick wealth generation are not new in advertising...the practice has been employed for decades. Phony spokespeople have 'gotten one over' on many an unsuspecting prospect who wants to strike gold and make a lot of money fast. If only it were that easy.

As I've told coaching students time and again...it does NOT exist.

This is where you just have to use your head. You simply MUST resist the temptation to fall for the hype.

If it's too good to be true...

Income Claims and Bogus Affiliate Earnings

It is all too easy for an affiliate vendor...even a very reputable one, to exaggerate claims. To be bluntly honest, this is what humans tend to do.

You know now that you should only deal with legitimate partners and that you should do your due diligence. Get on Google and dig around. Make sure you have a good solid company. And while income claims and earnings can be exciting...take them ALL with a grain of salt. Trust your gut and your instincts.

A successful affiliate marketer does his homework. Do yours.

Is Affiliate Marketing a Pyramid Scheme?

The short, definitive answer is no.

A Pyramid Scheme by definition is when a participant puts in money (often characterized as an 'investment') and that money is used to 'pay' the people that entered in to the 'program' before them. Typically, no real product or service is being offered...and this is where the 'hot water starts rising' as I like to say.

Affiliate marketing is merely a commission/revenue share I covered earlier and has absolutely nothing to do with these schemes.

Can You Really Make Money as an Affiliate Marketer?

If you've read the above (and paid attention) then you already know...of course you can. 

There are an endless supply of affiliate marketing programs in just about about every conceivable niche you can think of. You now know that it's legal and ethical.

But in order to actually be successful you need to do your research and treat it like a business. Do not fall in to the trap of thinking this is a path to get rich quick, as they say. Because you won't (...and it doesn't exist).