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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!
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.
Table of Contents
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.
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.
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.
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.
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.
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.
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.
3 Excellent Reasons Why Wealthy Affiliate Is Not an MLM Scheme
#1- It’s An Affiliate Program; There Are No Downlines
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