A customer purchasing a product

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The financial reward depends on the affiliate's ability to drive sales or leads.

Think of a beauty blogger who earns commissions from Sephora's affiliate program by promoting beauty products and earning a percentage from each sale.

On the other hand, in a pyramid scheme, earnings depend on the recruitment of new participants. The system collapses when recruiting stops because there's minimal focus on selling real products.

3. Transparency
Legitimate affiliate programs are audit directors auditors email list transparent about their terms of service, commission structures, and payout schedules. They also comply with laws and regulations, including those related to advertising and consumer protection.

As an example, affiliate networks like ShareASale provide clear guidelines on how affiliates can earn and get paid, with explicit rules for disclosures and marketing practices.

Pyramid schemes often operate under a facade, with unclear terms, hidden fees, and deceptive practices. They may promise high returns with little effort, and operate illegally.

4. Different goals & gains
Affiliate Marketing is sustainable over time as it relies on real sales of products or services. As long as consumers continue to purchase, the affiliates and merchants benefit mutually.

For example, tech reviewers promoting the latest gadgets on YouTube continue to earn from affiliate links as long as people buy those gadgets.

Pyramid scheme is essentially unsustainable because it relies heavily on constant recruitment. When recruiting new members slows down or stops, the entire scheme collapses as there is no real product revenue to support it.