Make money online. What better way to do it than with affiliate marketing? You don’t need a product, the cost is zero, and it’s passive income. You make money while you sleep. Or do you?
Affiliate Marketing is a great way for companies to broaden their reach on the internet. This concept isn’t new and many affiliates make good money by sharing products. Some make enough to live off of commissions.
Affiliates miss a key element though: control. Of course, you can get better at selling while doing affiliate marketing. But the company can change the terms of service, remove the product, or go out of business. Whoever makes the decisions has power. Marketers may be at risk of affiliate marketing fraud. We need to be cautious when jumping into opportunities, knowing that someone else controls the game.
On the other side, companies that offer legitimate affiliate opportunities have their own big share of vigilance to do. The range of tricks that affiliates employ goes from the traditionally unmistakable monkey business such as cookie stuffing, bogus leads and fake credit card usage to the more creative and well-executed cons.
Fraud from affiliates can be time consuming, expensive and can seriously jeopardize an entire affiliate program’s business model.
- Is Affiliate Marketing Legitimate?
- Examples Of Affiliate Marketing Scams
- How To Avoid Affiliate Marketing Fraud
- The Leader Always Wins
- The Advertiser’s View
- What Can Be Classified As Fraud?
Is Affiliate Marketing Legitimate?
The affiliate model was “ïnvented” in the 1990s and made popular by the brand we all know today, Amazon. Amazon associates could place text or banner links for individual books on their website or link directly to the Amazon homepage.
When visitors clicked on the associate’s website to go to Amazon and buy a book, the associate received a commission. Amazon was not the first merchant to offer an affiliate program, but its program was the first to become widely known and served as a model for subsequent programs. Nowadays these programs claim to make you money with little effort.
Why would businesses need affiliates in the first palce? They want to save time on creating relationships and get new clients. To influence someone’s decisions is much easier if you create a connection with people.
Offering a comission to whomever can help them build such relationships has proved to be a great way for a business to grow very fast. Amazon affiliates probably played the biggest role to make Amazon the empire it is today.
What’s In It For You?
Affiliate programs are just another method brands use for marketing. They look to increase brand awareness and make sales, not to scam you. If a company wants to profit long term, it will look for a win-win. They know they will only make money long term, if you do too.
Sellers use affiliate programs to boost their sales and help digital entrepreneurs.
When marketers cannot afford to start a business, the easier way to make money is as affiliates. For the advertiser, this means free advertising.
It’s normally good for the buyer as well. Clients naturally join the brand for product demand and quality.
When You Should Be Suspicious
The problem comes up when these programs advertise questionable products or services. The business owner creates a product or service that adds no value. It’s not selling well, so they may create an affiliate program.
With such a foundation, having doubious affiliates to “market” their business is one of the rare ways for them to get new customers.
Because it had low value, affiliates find it hard to sell. And if they do, customers aren’t happy. The problem affects the client, the affiliate, and the seller.
The entrepreneur should improve the product in such a case. Sadly, some of them choose to ignore the problem and rather invest their energies to trick the system. They create schemes where only the advertiser wins.
Legitimate businesses center on value. Forget about the affiliate for a moment. What’s in it for the buyer? Why would a customer spend money on this company? How do the founders make their money? If the answers don’t satisfy you, you should probably move on to the next affiliate program. There is plenty to choose from.
Examples Of Affiliate Marketing Scams
Affiliate offerings are being presented as opportunities. You either take action fast, or you lose it, they say. Many of them will claim to make you money while you sleep. How do you know you aren’t in a trap?
Here are three examples of affiliate marketing done wrong.
Fake Products: The Pyramid Scheme
Affiliate programs are good for business. Sellers make sales, affiliates make money, and more customers know the brand. As long as the client gets value, everything is fine.
But what if the “customers” are the affiliates? What if there’s no client, no product, or service? When companies do marketing for the sake of it, it’s a pyramid scheme.
Sure, there may be a presentation. But the money is made from referrals. The higher you are in the pyramid, the more you make, exponentially.
Unfortunately, new members pay the price. They come looking to make money, and now they’re financing the scammers. The only ones who live the passive income dream are the founders and the inner circle, not those who join years later.
Fake Training: Vague Info-Products
When people want to start a business, they usually have no idea how to start. They prefer to follow a plan to make X amount of money in X days. When doing research they may find an opportunity, and they’re unable to make informed decisions.
It is easier to let others “hold your hand through the process.” We’ve all heard that online winners have mentors and join programs. Imagine you find a course on how to make money as an affiliate. Can you picture it?
$2997 worth of content! It’s yours only today for $497. We’ll raise the price soon!
And then you see the testimonials.
How do you know if it’s the real deal or not?
Most “secrets” people share in such courses are common knowledge found for free. The course creator compiles and organizes the content to make it “sellable”. Which is not a bad thing in itself. Indeed it could be wise to learn from others mistakes and experiences.
There are up-sells, depending on how “serious“ you are. Some even include a mastermind group. In essence, it’s a private social media group where everybody shares their opinions.
Always question the value of such trainings. More often than not the only quality output of people who sell such trainings is the salespage itself. Long story short, you overpay, and they under-deliver.
The message is vague, the copy is full of fluff, and the intended results are unclear.
Make passive income and be your own boss!
Great, but how? What’s the system? What results can I expect, and when?
Answering these questions is indeed not as easy and will depend on many variables and you as well, however you should still strive to find answers to the extent that is possible.
From testimonials to bullet points, fake programs look to sell the dream, not the action map. If you intend to join such courses, then search for programs that provide an actionable plan and not just the dream.
Fake Software: One-click Business Success
Some models require technical knowledge. Programming, web design, e-com management, trading tools, CTR, advertising, product research, and so on.
Technology helps us get work done faster. Marketers would spend ages on web design, but now it takes minutes. You could say entrepreneurs get rich quick.
Getting rich quick is possible. Getting rich quick AND easy is the scam being sold. Software scammers exaggerate how easy it is to profit or downright lie about the profitability itself. Victims buy with desperation, thinking it will change their lives.
How To Avoid Affiliate Marketing Fraud
Nobody likes scams. What you learn today will save you thousands in the future. Here’s how to avoid promoting scammy affiliate programs.
Who Is Selling The Program?
When desperation kicks in, it’s easy for money chasers to fall into schemes. It’s not all about the opportunity, but what created it. Ask:
- How many people have they helped?
- How much do they earn?
- What makes customers value their brand?
- What are their challenges?
- How about their competitors?
- What’s their company’s history?
- How do they make money?
These questions will reveal if the company wants what’s best for you. When you take advice, remember that affiliates have incentives as well.
Take Calculated Risks
Affiliates can make a lot of money online, even if they don’t control the business. It’s all about losing small and winning big.
Pay-to-join pyramids are an absolute No. Unless paying to work makes sense to you, stay away.
We can prevent scams by making better decisions. Before trying a new idea, calculate your risks. What’s the worst that can happen? What’s the best you can get? If you cannot accept the worst-case scenario, don’t do it.
Once you’re protected, learn more about the opportunity. Look for precise guidelines, so you know if the program is worth your time.
Is It Too Good To Be True?
Could business obstacles be actual opportunities? For years, we’ve believed that easy challenges are good. And problems are bad because they make entrepreneurship harder.
What we call difficult refers to the entry barrier of a business. If it takes a lot of effort to create a certain product, it may be more valuable in the market because fewer people are doing it. However, if there is no demand for your new “invention” then it does not matter how long you spent creating it either.
When something is easy, the profits associated with it won’t usually last. It’s only a matter of time than someone like you copies your business and competes against you.
Do you need a better sign? Whenever you suspect a scam, ask yourself what’s the value they give to their customers. If the guru just talks about making money and what you will do with it once you get it, but not about the product, we have a problem.
The Leader Always Wins
The owner of the affiliate program has privileges that its affiliates will never have. Like any business, it takes responsibility to manage, but they can make decisions, change products, shave leads and update marketing campaigns as they see fit. They own the service, the client base, and the brand.
Affiliate marketing is risky, even if it’s not a scam. No matter how trustworthy people are, you don’t have control. Anytime, the owner can cancel the affiliate program or retire the products. If they go down, guess who follows them.
If you join multiple programs, however, you are safer. It’s better to make small profits from many products than relying on one.
It is important to understand this interconnection and that you in reality aren’t your own boss.
The Advertiser’s View
Fraudulent activity by affiliates comes in both automated and non-automated varieties.
Pay per click fraud for example, where affiliates are paid per click for the amount of traffic they bring to the site, can be automated with scripts that are programmed to resemble the activity of real human visitors. These bots are referred to as “click bots”. Click Bots are one of the main sources of pay per click affiliate fraud.
Unless you are an independent network, you should never offer pay per click payments to your affiliates. This model is way to risky to be carried out by one or few individuals. If you have a product and would like to have your own affiliate program without joining an established network, the only proper and most rewarding affiliate model is pay per sale.
A merchant needs to be aware that rogue affiliates may try to purchases something with a stolen or invalid credit card with no intention of receiving the actual product, but instead a commission for selling that product.
The majority of your affiliate generated sales will come from an elite group making up a small percentage of your overall affiliate base. You should make it a habit to review and know who these affiliates are. Not only because communication and knowledge will help you motivate your best affiliates, but because it will become easier to identify any bad ones. If a brand new affiliate is able to break into your top affiliates, you should check out the site and the orders that came through for any anomalies or patterns.
Some of the troubles concerning affiliate fraud, can be prevented early in the process by screening affiliate applications. When looking at a site for potential acceptance, one should be lenient but cautious. One of the mistakes that one does not want to make is to decline an application that could turn into a profitable relationship.
An affiliate manager should contact their affiliates via telephone, evaluate potential traffic, offer campaign suggestions and let them know about special affiliate promotions available to them. This “Call”, when done properly is always received as positive and strengthens the relationship between affiliates and their affiliate manager.
If you receive an affiliate-generated sale which appears to be fraudulent, you should note that the affiliate that referred the sale may have had nothing to do with the fraud, so immediate accusations should be avoided.
First step to take is to void the commission through your interface, so that it is not paid out to the affiliate. The next step would be to attempt to gauge if the fraud is a deliberate attempt by the affiliate to earn commission, or is simply an unrelated event as far as the affiliate goes.
When it comes to the subject of fraud, subscribing to the belief that an ounce of prevention is worth a pound of cure will keep your affiliate program going in the right direction!
Usually transactions are screened by affiliate networks. They check the card numbers, IP’s and everything else that could indicate a fraudulent purchase. They have a huge database of fraud transactions that they built over the years, so this can be one reason more to choose an affiliate network instead of using an affiliate script to manage your affiliate program on your own.
What Can Be Classified As Fraud?
Affiliate spam does not always mean fake pharmaceutical advertising and dubious payday credit scams. Affiliate spammers send unsolicited promotional emails for a wide range of products. Spammers will advertise legitimate products and earn commissions on every sale.
Advertisers are often unaware that their products are being advertised by spam. Or if they do, they turn a blind eye. By doing so, they will certainly damage the company’s reputation.
Scammers create fake websites to make their schemes look legit. These websites will reassemble and look like news website or other authoritative websites. On such websites you can find their pitch and their products.
They will contain a fake article or review promoting a given commodity. Sometimes it will appear as if a celebrity is endorsing this product and service as well. This is done to make the offer that this website is promoting more believable.
Content on such websites is entirely or for the most part, made up. The website exists solely to convince a potential client to click through the link, get redirected to the promoted website and to buy what is being offered there. The offer itself might not be a scam in itself though.
Con artists can use lead software or manual methods to create false activity. They will falsify the website data tracked and get illegal commissions.
Fake leads are deceiving for the advertiser, especially using a pay-per-performance model. If you pay affiliates per action, impressions, or clicks, it’s easier to cheat the system.
Whenever affiliates are given more freedom, make sure to get things clear in your terms of service. If you are the advertiser, you should strive to detect and react before it’s too late.
Some ingenious members will try to find blind spots where they can exploit the program. They may falsify information to make money faster.
That includes side accounts, resells, and charge-backs. An affiliate opens an account with other credentials. The first account sends the affiliate link. Once the scammer gets the commission, he asks for a refund in the second account. The purchases turn into chargebacks, but the merchants have already paid a commission to the affiliate.
Advertisers use two red flags to prevent it: refunds and order volume. For example, a person buying your most expensive product through an affiliate, soon asking for money back.
If you want to start a business, affiliate marketing is a good place to start. You can make decent money by selling other’s products, and the risk is low.
You can generate income fast, but you won’t get rich with little effort. A program that promises millions “quick & easy” should be considered a scam.
If you find a program especially suspicious, assume it’s a fraud unless proven wrong. The best thing marketers can do is to keep learning.