Tuesday, May 27, 2008

Avoid Multi-Level Marketing Affiliate Programs

by John Hartley

Multi-level marketing is supposedly a way of making money, and it is true that some products are sold offline using multi-level methods. Therefore, there are a lot of multi-level marketing affiliate programs around.

What's wrong with them? For a start, the whole principle of multi-level marketing is that there are many layers, and the people above you in the pyramid each take a cut of what you sell or promote. That is bad news because it means you earn less, and maybe nothing at all. In fact, they used to be called pyramid selling schemes.

Up to 10 layers in some multi-level schemes

These schemes can have ten layers, so until you get ten layers of people beneath you, you will be losing a lot of your income. To give you some idea, a two-level system is used in affiliate marketing by quite a few companies. What this means is that if you recruit someone, and he makes a sale, you get, say 10 per cent of the sale price. If the total commission was 50%, the person in the level below you would get only 40 per cent.

That sort of payout, with just two levels in the scheme, is considered acceptable, but is still frowned upon in some countries. Why? Because the person who loses that 10 per cent does so just because you recruited him, no other reason. Really, for him to get the 10 per cent, he should be doing some of the work. He is supposed to, but generally people above you in multi-level marketing do not do much if anything to help.

You can see that in a ten level system, there is hardly anything left for the people at the bottom. So when you start you are not earning for yourself but for someone else. In other words, by encouraging the people to make sales, you are actually getting them to earn money for you. This is why multi-level marketing affiliate programs are illegal in some countries.

It is also why they are a bad idea. Another reason why they are bad is there is usually a joining fee, which allows you to earn from the system. There may be a free membership as well, but you can't earn from it.

Because there is this fee, people end up trying to recruit people instead of selling products. All this means that multi-level marketing affiliate programs are really bad news, if they go beyond two levels.

Avoid them, and find affiliate products to market directly, and you will be able to earn money online.

About the Author

For FREE reports and the latest reviews of affiliate marketing products and services go to www.reallyusefulmarketing.com - which is run by John Hartley.