Is Wealthy Affiliate a Pyramid Scheme Or MLM? Let’s Find Out The Truth!

Disclosure (full version here): Some of the links you’ll encounter are affiliate links. If you click and buy something, I may get a commission. Thank you! 

If you Google terms like “Wealthy Affiliate review” or “Wealthy Affiliate University review“, or “is Wealthy Affiliate a Scam”, you’ll see a bunch of positive reviews explaining that WA is not a scam, that it is legit AND that you should join.

When I say a bunch, I mean A LOT.

Virtually every review sings to the same tune.

However, this is the internet and it’s quite normal that you’re skeptical about what you find online.

In fact, I congratulate you because it means you have something between your ears, and you know how to use it.

So, you want to know whether Wealthy Affiliate is a pyramid scheme? Or perhaps a MLM scheme?

I answer it below so stay tuned!

Is Wealthy Affiliate a Pyramid Scheme or MLM?
Is Wealthy Affiliate a Pyramid Scheme or MLM? Learn the Truth Here!

Note: before you begin, understand this article is divided into 2 parts Part 1 explains why Wealthy Affiliate is not a pyramid scheme, while Part 2 busts the myth that WA is some kind of MLM.

What Are Pyramid Schemes Exactly?

Pyramid scheme is a “business model” that is laid out in 2 distinct parts.

First part has you buying into the product or service.

Second part has you recruiting other people to buy for themselves. Pyramid schemes are illegal and they are often disguised as a business opportunity.

For example, in December 2007 a marketing company called Wealthy Pools International started selling English and Spanish language DVD’s (remember those?) through a network of sales associates.

So, these people first bought the DVD’s, but then proceeded not to resell them for a profit, but to invite others, their friends, family, and associates to join.

They were trying to make money not by selling the DVD’s but by promoting the company that sold them. This fraud involved over 70 000 people who got scammed out of the total of 132 million dollars.

Pyramid scheme examples
Source! Click image to enlarge (opens in new tab)

4 Telltale Signs Of a Classic Pyramid Scheme

#1- You’re Required to Buy Lots Of Inventory

In a true pyramid scheme, you are the product and someone has to make money off you. So you will need to fork over a decent chunk of $$$ just to be able to join.

#2- Your Income Is Based Not On Selling The Product, But On Getting People To Buy in

Typically in a pyramid scheme, it’s far more lucrative to get other people to join the program under you, then to try and sell them the very product you’re supposed to be promoting.

If you find yourself in a situation like this, consider it a hint and a half there’s something fishy going on.

#3- Constant Upselling

Even though upsells are not unique to pyramid schemes, they are rampant among them.

In a pyramid fraud you will be taken advantage of and you’ll be forced to constantly buy stuff you don’t need to stay in good relations with the company.

#4- You’ll Be Losing money

Pyramid schemes are highly unsustainable. They crack sooner or later and almost always it catches you off guard. And, in 99.99% of the time- you won’t make a positive ROI.

6 Telltale Signs That Wealthy Affiliate Is NOT a Pyramid Scheme

#1- It’s Free To Join

In a pyramid scheme, you’re the product and someone is making money off you. This means that you have to pay and often quite a lot just to join.

Contrast that with Wealthy Affiliate where you don’t have to pay any money to become a member. Where you can stay a free member for as long as you want.

And where you can join their affiliate program and promote WA even as a Starter member.

In other words- you don’t have to give any money to WA in order to make money from it.

Crazy right?

No, it’s just pure affiliate marketing, a legit model for making money online.

Another distinction, in a classic pyramid scheme usually there is no product to promote and you’re trying to suck in others into the trap you fell into.

But with Wealthy Affiliate Platform you have a ton of features to promote: from their premium hosting services to newbie friendly site builder (SiteRubix) to an excellent keyword tool (Jaaxy); to everything else in between.

Some people have built lucrative businesses promoting Wealthy Affiliate, a genuine value packed product which is NOT a pyramid scheme or even an MLM.

Related resource- full Wealthy Affiliate review here!

#2- It’s An Affiliate Program And There’s No Face-To-Face Selling

Wealthy Affiliate operate an affiliate program you can join if you’d like.

Other people have joined and promote them as well. Including me!

I’m an affiliate for WA because I like their service, think they’re quality, and because they were the ones who introduced me to the concept of affiliate marketing. I’m sentimental I guess 🙂

So if you join through my link I will get a commission.

But I won’t be selling you a Fata Morgana. Instead you will get full access to the platform that can teach you internet marketing and change your life completely.

With a pyramid scheme you’d just be flushing your money down the drain and that’s the crucial difference.

#3- You’re Not Restricted To Only Promoting Wealthy Affiliate

Wealthy Affiliate teaches you how to become an affiliate marketer and promote other people’s products for profits.

Sure, you can promote WA if you want, but it’s not a requirement and at least 90% of WA members end up picking their own niches they’re passionate about.

#4- It’s Too Cheap To Work As an Affiliate Scheme

I’ve talked about Wealthy Affiliate Pricing here, so I won’t cover it here. But basically, Pyramid schemes can only work with outrageous pricing where you have to pay thousands of dollars to join.

WA Premium is only $49/mo and if it were a pyramid scheme it’d be an extremely poorly designed one 🙂

#5- They Won The Lawsuit Against MOBE, A True Pyramid Scheme

It’s a too long of a story to divulge here, buy basically MOBE (My Online Business Education) sued Wealthy Affiliate and the owners Kyle and Carson for spreading rumors about them being a pyramid scheme.

Then the FTC got involved and determined that, YES, MOBE was an illegal pyramid scheme who scammed people out of the total of 125 million dollars.

And Wealthy Affiliate was a legit business that did nothing wrong.

If you’re curios to learn more, read about it in this blog post.

Note: even though Wealthy Affiliate is not a pyramid scheme, their affiliate program has some elements that resemble it.

Couple that with the fact that to most newbies who don’t know left from right in internet marketing, MLM schemes and affiliate marketing are almost equal;

and I see a need for a good explainer video that will clearly show the difference between the two, and why Wealthy Affiliate is not a pyramid scam of any sorts.

What is MLM and 3 Reasons Why Wealthy Affiliate is Not a MLM

According to Wikipedia:

Multi-level marketing (MLM), also called pyramid selling and network marketing is a controversial for the sale of products or services where the of the MLM company is derived from a non-salaried selling the company’s products or services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation system. An MLM strategy may be an illegal pyramid scheme.

Here’s another way of putting it:

MLM (Multi Level Marketing) is a business model where products and services are sold through an extensive distributor network.

MLM members are called “distributors” and they can earn money in two ways:

  • Selling the product;
  • Recruiting others into the MLM.

The latter option is more lucrative and here’s why.

As a member of MLM you’re encouraged to “build a team”. Each person that joins under you is your downline and you’re their upline.

And you earn passive income from your downline’s work.

For example, you get 5 people to join the program and you get paid $100 for each. That’s $500.

Then your 5 downlines each get 5 more people as their downlines and you get $10 for each of those.

So, 5x5x$10=$250

That’s $250 in truly passive income and it’s a dream come true… except that it’s unsustainable and unrealistic. Recruiting people without skill is damn hard work and most folks just can’t do it successfully.

Hence, 99% of all distributors end up loosing money.

They get a negative cashflow because they have to keep paying to be a part of MLM program and they can’t make their money back because of poor direct selling skills.

MLM business model example
MLM’s are unsustainable! Source

3 Excellent Reasons Why Wealthy Affiliate Is Not an MLM Scheme

#1- It’s An Affiliate Program; There Are No Downlines

First of all, Wealthy Affiliate teaches you affiliate and internet marketing.

They show you how to pick the niche you love; how to build and manage an affiliate site; and how to have success with it.

You’re not required to promote WA and at least 98% of folks don’t.

Second, Wealthy Affiliate has an affiliate program. And you can join and promote WA. And when someone clicks on your paid link and signs up for premium, you will get a commissions.

And guess what?

That’s where the story ends.

When your referral tomorrow starts raking in commissions for themselves, they get to keep their earnings and you get paid $0 for it.

It’s because they are not your downlines, and you’re not their upline.

Wealthy Affiliate is not an MLM.

#2- WA Members Are Not Required To Promote The Platform

This is a link to their affiliate program bootcamp training.

There you can learn how to promote Wealthy Affiliate effectively within the crowded MMO (make money online) space.

You can join if you like, but you don’t have to.

Wealthy Affiliate bootcamp training

With MLM programs you have to promote them because that’s all there is, while Wealthy Affiliate teaches you the core skills you can use to promote anything.

#3- There Are No Distributors and Product Reselling

When you promote Wealthy Affiliate, you do it as an affiliate marketer, and not as a distributor.

You can make affiliate commission by recommending the program and when people buy, but you can’t resell their service.

Besides, basic level of WA is free for all, and free tier doesn’t exist in an MLM scheme.

FAQ on Wealthy Affiliate And Making Money From it

#1- Can You Really Make Money With Wealthy Affiliate?

Yes you can.

You can either promote WA and make money that way, or you can choose a niche based on your passion and build a site in that area.

The sky is the limit because people search online more than ever, and it has never been easier to own and operate an online business.

#2- Wealthy Affiliate, is it Free?

Is Wealthy Affiliate free?

Yes and no.

There is a free tier to WA called Starter membership. Is your ticket in, it’s non-expiring and you can claim it whenever you want. There are also two paid tiers:

  • Premium;
  • Premium Plus.

Learn more about Wealthy Affiliate pricing here.

#3- How To Make Money With Wealthy Affiliate?

Here are 2 ways.

First, take advantage of the Online Certification Course. Go through it, it master it and become an affiliate marketer.

Really, that one course will take your from not knowing what WordPress is to writing and publishing content like it’s second nature to you.

Second, and I don’t recommend this if you’re a newbie… join their affiliate bootcamp and learn how to promote Wealthy Affiliate effectively.

Again, this is not for newbies because you’d be walking into a MMO (make money online) niche, one of the hardest niches to crack open on the web.

#4- What Does Wealthy Affiliate Teach?

Wealthy Affiliate teaches you how to become an affiliate marketer running a successful online business.

They will show you how to pick a niche, how to do keyword research, how to write content for the web, how to promote your content and website…

The whole platform is set up in such a way that you really don’t need to go anywhere else, AND you don’t need to pay for anything else to become successful online.

#5- Do I Have To Promote Wealthy Affiliate When I Join?

No, you don’t have to promote Wealthy Affiliate.

You’re free to pick your niche, something you’re passionate about and that can also be monetized.

And in fact, that’s what the training implies and says you should do.

Wealthy Affiliate training

#6- Can I Join as a Starter Member Now, and Then Upgrade Later?

Of course.

In fact that is what I recommend you do. There’s no logic in paying for something you haven’t personally tested out.

Become a free member today, and go premium whenever you want in the future.

Note, just so you know, you cannot downgrade from Premium member to Starter (one of many genuine Wealthy Affiliate complaints).

So, once you upgrade, that’s it and if you ever want to start anew, you’d need to open a new Starter account with a new email address.

Conclusion- Is Wealthy Affiliate a Pyramid Scheme? Is it a MLM?

Wealthy Affiliate is not a pyramid scheme, and it’s also not a MLM.

WA is a legit program that has turned thousand of ordinary people into successful affiliate marketers.

Do you want to become one of them?

If yes, then open a Starter (free) account today and take it from there. And if you go through my link, you’ll get my exclusive help inside the WA platform.

See you on the inside! 😀

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