Are Online Affiliate Programs Just Pyramid Scams In Another Form?Affiliate Programs Do Emulate Some Of The Worst Features Of Their Real World CounterpartsHere Are Some Ideas About How To Avoid Problems With Affilaite ProgramsBy Garnet R. ChaneyDo Online affiliate programs resemble pyramid schemes? Are they similar to programs that people in the real world call pyramid schemes? They usually structure their programs so they are strictly speaking, not pyramid schemes. But in practice they probably have many of the worst features of pyramid scams.In the online world, some programs, such as Amazon Associates, prohibit the affiliates from ordering from their own accounts. Penalties range from loss of the commission, to dismal from the affiliate program. Apparently, these companies have decided that they dont want people to sign up for an affiliate account just to have a way of ordering their own products at a discount. They are also mainly interested in collecting customer data from visitors to other sites, customer data that they do not share in any way with the site that originally sent them the visitors. Such schemes are often easily circumvented by doing ordering to deliver to friends, or ordering through other affiliates sites as a reward for some service such as programming or web design help. Unlike real world programs, online affiliate programs often have schemes that unfairly limit the commissions that affiliates can receive, and deny the affiliate a commission for the orders that they caused to go to the affiliate program. For example, by placing artificial limitations like 'customers must complete their orders within 24 hours of placing their orders' (such as Amazon), affiliate programs can steal significant amounts of commission from the affiliates. Because not all visitors will complete their purchase the same day that they visit the affiliate program. Some of these programs have invested this stolen commissions in creating website features such as "wish lists" and long duration shopping carts that encourage visitors to delay their purchases until payday, or after a credit card payment posts. A few online affiliate programs require the affiliate to first purchase products of the company. For some, such as the Internet Marketing courses of Corey Rudl, this is optional, but encouraged. The vast majority of online affiliate programs, in the absence of requirements that affiliates must purhase product, instead set unrealistically high minimum commission pay out threshholds. Although there has been a federal law that, because of tax reasons, requires affiliate programs to pay affiliates their accumulated earnings at the end of the year, whether or not arbitrary minimum threshholds were met, few programs are compliant with this law.By setting very high initial payment threshholds, the online affiliate based marketing program is emulating some of the worst features of real world programs that require an affiliate to sell a considerable volume before having any hope of recieving a check. As an example, Amazon's policies typically require a an affiliate to sell anywhere from 50 to 150 books in order to accumulate the minimum $100 payout. An affiliate also has the option to get a smaller payout in the form of non-negotiable, easy to loose, emailed gift certificates for later purchases at full price on Amazon. (Affiliates are not given any commission on the use of that gift certificate.) For the typical small site with 20 or less visitors a day (95% of all websites fall into this category), and typical conversion rates of only 1% - 2%, if the site sent every visitor to Amazon, they might only expect to sell 30 books a year. They might need to be an affiliate for 3 or 4 years just to receive their first $100 check. Several real world affiliate programs charge some kind of monthly maintenance fee. Many require the monthly purchase of "business building" materials in order to qualify for the highest bonuses. Typically these business building materials are not commissionable, and only a small group of very successful people in the organization get to design, produce, and make money from presenting these materials to everyone in the organization. Some of those people make more money from selling these motivational and instructional items than they make from sales of the companies real products. I am not aware of any online affiliate program, that did not begin as a real world company, that requires such purchases from their affiliates. Still, for some people, affiliate programs are the only way to easily make money from their websites. As long as their don't think the affiliate program is some altruistic gesture of support from a large corporation, the website owner will not forget that they are truly on their own to make a success of their website. Website owners should make sure that they invest in website promotion and traffic building to make their website successful, and also investigate having alternative affiliate income sources. NEW! Contribute to this article at Chat11. Join In The Discussion! Discuss these topics: Other articles on Chat11 about the web: | |
