Affiliate marketing is when you promote a company’s product or service for a commission. When people click your link and buy the product or service, you make money.

It sounds so simple that many people suspect affiliate marketing is a scam. “How can you make money so easily?” you wonder.

After all, the global affiliate marketing industry is said to reach $27.78B by 2027. The hype must be real.

So, is this booming industry everyone’s talking about worth your time?

This article explains how and why affiliate marketing is a legit way to promote a brand and earn money, as well as the biggest risks and scams to avoid in this saturated industry.

Is affiliate marketing legit?

Yes. It is legit.

Affiliate marketing is also:

  • Legal, if you comply with your country’s laws and regulations in your country. You should comply with the U.S. Federal Trade Commission’s (FTC) guidelines. That means you should clearly disclose your affiliate partnership.
  • Ethical, if promote only the services and products that you genuinely like or believe in.

On the other hand, affiliate marketing can be:

  • A scam if you deal with the wrong company
  • A hard way to earn money, if you don’t have a solid customer base yet. While it may seem like applying for the affiliate program is easy, the truth is that not everyone gets approved. Even after you get approved as an affiliate, you have to work on scaling your affiliate business, growing your audience, building your reputation, aligning your brand values, and many other things.
  • Unlawful, if you don’t comply with disclosure laws. If you don’t clearly and openly disclose your affiliation partnership and affiliate links to your audience, you can face liability under the FTC Act. The company selling the product or service can also face liability.

Why can affiliate marketing be a legitimate income source?

There are many reasons why we can safely make this conclusion. Let’s look at some of them:

1. Top affiliates make a fortune

Many popular social media influencers and YouTubers are highly successful businesses that earn substantial income through affiliate marketing.

For example, Pat Flynn of Smart Passive Income has generated significant revenue through affiliate marketing, particularly promoting web hosting services like Bluehost.

His monthly revenue is said to be around $125K. His transparent income reports have become very popular, demonstrating the potential for high earnings.

Meanwhile, Michelle Schroeder-Gardner of Making Sense Of Cents makes over ($100,000 monthly from blogging and has earned over $5,000,000) in total from her blogging business.

A famous Youtuber Sean Cannell from Think Media earned his first six figures through affiliate marketing when he found his niche in a faith-based content. He now makes

2. Major companies rely on affiliates

Leading companies across various industries use affiliate marketing programs to drive sales and leads.

Amazon Associates is one of the most prominent examples; it’s Amazon’s affiliate program, relied upon by countless bloggers, influencers, and content creators to promote its vast range of products.

Similarly, software companies like Adobe and web hosting giants like Bluehost and HostGator have robust affiliate programs that contribute substantially to their customer acquisition strategies.

Many news websites also earn money this way like the New York Times, The Verge, NerdWallet, and more.

3. Affiliates pay taxes

In the U.S., affiliates receive a 1099 form from the companies they work with, detailing their earnings for the year. This ensures that their income is properly documented and subject to taxation, just like any other form of business income.

For instance, top affiliates working with platforms like Amazon Associates, ShareASale, or C.J. Affiliate must report their earnings and pay taxes, underscoring the legitimacy and accountability of their operations.

4. It’s a multi-billion-dollar industry

Affiliate marketing is a significant driver in the global economy, with the industry valued at over $12 billion globally.

Major affiliate networks like Commission Junction (C.J.), Rakuten Marketing, and ShareASale facilitate billions in sales each year.

For example, Rakuten Marketing, part of Rakuten Inc., reported generating billions in sales revenue annually for its advertisers through its affiliate network.

The most common scams in affiliate marketing

It doesn’t mean that all affiliate programs and the affiliates themselves are legitimate. In the affiliate market, scams are on the rise as the popularity of it is growing.

Let’s look at the numbers.

According to this study, 17% of traffic coming from affiliate programs was determined to be fake. It lost the industry approximately $3.4 billion to ad fraud in 2022.

This number has almost doubled from 2020, when 10% of the traffic was fraudulent.

Here are fraudulent activities you may encounter in affiliate marketing:

1. Pay-to-join affiliate programs

The rule of a thumb is you never pay to join the affiliate program. Legit affiliate programs are free to join for anyone interested.

Since the merchant pays you for every sale, lead, or click, there’s no sense in charging you the onboarding fee.

Pay-to-join is a huge red flag for anyone who’s starting out their affiliate career, and it’s best to stay away from such a program.

2. Fake affiliate gurus

In the affiliate marketing industry, a fake guru is typically someone who presents themselves as a highly successful expert in the field, often through social media, webinars, and flashy websites, but who lacks genuine expertise or ethical business practices.

Their primary goal is usually to make money off their audience rather than to provide real, actionable value.

It’s easy to spot a fake affiliate guru when you know the most common signs:

1 Sign. Over-the-top claims and unrealistic promises: 

‍They often promise instant riches, claiming you can earn thousands of dollars overnight with minimal effort.

2 Sign. Showcasing wealth:

They frequently display luxurious lifestyles—expensive cars, mansions, exotic vacations—to create an illusion of success.

3 Sign. Aggressive marketing:

‍They frequently use emotional appeals, such as claiming their story of overcoming adversity, to connect with the audience on a personal level and make their pitch more compelling.

4 Sign. Fake testimonials and hidden costs:

They often use fake or paid testimonials and reviews to create a false sense of credibility and success. Moreover, their offerings may include hidden fees, or they may upsell additional services and products once you’ve made an initial purchase.

5 Sign. Expensive services and products:

‍They sell high-priced courses, webinars, or mentorship programs that supposedly contain the secrets to their success.

6 Sign. Poor customer support:

Once you’ve purchased their course or program, getting in touch with them for support can be difficult. They might ignore emails or provide vague, non-helpful responses.

Plus, fake gurus often have strict no-refund policies, making it almost impossible to get your money back.

Other signs to look out for in fake affiliate experts are lack of credentials, questionable backgrounds and no peer recognition.

7 Sign. Poor-quality services and products:

In the affiliate marketing industry, promoting dodgy, low-quality, or scam services and products is a deceptive practice aimed at generating maximum profit.

These products are often substandard, poorly manufactured, or do not perform as advertised.

This can range from physical products that break easily to software that has numerous bugs and little functionality.

In the case of software or digital tools, these products may lack essential features that make them effective or worthwhile.

This type scam is especially damaging for beginner affiliates who are building their reputation among their followers.

Dodgy products and services that don’t deliver what they promise or are overpriced will damage the trust in them and kill the affiliate career before it even begins.

The worst scenario is promoting non-existent products from fraudulent merchants. When consumers make a purchase, they never receive anything in return.

How do you find a legitimate affiliate marketing program?

This guide will help you to find legitimate affiliate marketing opportunities:

1. Look for reputable affiliate networks.

You can be safe when you join established affiliate networks like Amazon Associates, ShareASale, Commission Junction (C.J.), Rakuten Marketing, and ClickBank.

These platforms vet their advertisers and provide a level of security and credibility.

2. Verify legitimacy before applying.

Don’t forget to look at user reviews and ratings on platforms like Trustpilot or the Better Business Bureau (BBB).

If you join the SaaS affiliate program, then look for reviews and ratings on platforms like G2 Crowd, Capterra, or Trustpilot.

This will help you ensure that the SaaS company has a good reputation among its users.

Don’t forget to investigate the company’s background, its founders, and its operational history.

Avoid companies with a shady past or those that are very new with no track record.

3. Ensure high quality of the service or product you will be promoting.

It’s smart to purchase or trial the product/service yourself to evaluate its quality. A good rule of thumb is to only promote products you believe in and would use yourself.

The second step is to look at customer reviews on third-party sites.

If you want to start an affiliate in software industry, try out free trials or demos to experience the software yourself. Assess its usability, features, and overall value.

Ask yourself if you’d use it. If the answer is negative, don’t bother becoming an affiliate.

If you already use a product you like, check if the company has an affiliate program. Even if they don’t, they might be interested in building an affiliate relationship with

you—just ask!

4. Check cookie durations and aim for programs with cookies that last at least 30 days. It gives you a longer time to earn commission from a sale.

5. Make sure the program’s commission structure is clear.

Understand different commission models like Cost Per Click (CPC), Cost Per Action (CPA), or Cost Per Sale (CPS), and pick the one that fits your strategy.

Before joining any affiliate program, you must very well understand what is affiliate marketing and how it works. Most importantly, read carefully through the terms and conditions before starting an affiliate partnership.

The next steps after becoming an affiliate

This is where the real work begins. At this point, it must be clear to you what kind of content you will be creating for your audience and through which communication channels.

You are likely done with your affiliate niche research before joining a particular program, so it gives you a solid understanding of what makes them tick.

You must be ready to:

  • Actually test the software/item yourself before giving your review and sharing an affiliate link.
  • Make your content relevant to people, giving solutions to their pain points. For example, as a lemlist affiliate you a LinkedIn post can explain in details how sales people can boost their multichannel outreach with a new powerful feature. Adding automated Linkedin voice messages to your campaigns gets you 7x more replies than linkedin InMails and up to 40% than regular email campaigns.
  • Use multiple marketing channels to promote your affiliate links like email marketing, social media marketing, or per-click advertising. In order to drive traffic to your blog or website, you must optimize them by using SEO methods.
  • Make you affiliate marketing strategy personal since people appreciate sincerity. If you like the service, tell them exactly what you like about it; if you don’t, be open about why. While you can gain traction from optimizing your channels for search engines quite easily, it won’t last long without building the social ecosystem around it. A profitable affiliate business is about your values, experiences, interests, and competence, as well as how well you communicate them to your followers.

Key Takeaways

Affiliate marketing is an absolutely legitimate business and advertising method. What’s more, it’s a significant driver in the global economy, valued at over $12 billion globally.

However, there are some risks and scams to be aware of when starting your affiliate career. Pay-to-join affiliate programs, fake affiliate gurus, and expensive mentorships are among the most common ones.

It’s important to spot the red flags of the fraudulent affiliate program early before you signed up for it.

After you find the right affiliate program and start building the partnership, the real work begins.

Just because you are an affiliate doesn’t make people buy the product or service you promote. Especially, if you don’t have a solid audience yet.

Truly sustainable and profitable affiliate business is not about clicks and links. It’s about your values, experiences, interests, and competence, and how well you communicate them to your followers.

Trust you gain among your audience and competence your share are the crucial factors that will help you succeed in affiliate industry.