Fact CheckedLast Updated on August 1, 2022 by Stephan Lindburg
We are constantly being asked why affiliate networks promote scams, and that is an excellent question. Truth be said, not all affiliate marketers choose to promote scams. In fact, in many or even most cases affiliate marketers act as legitimate promoters who receive a certain percentage of the sale as a commission.
In many ways one can equate it to a travel agent who issues a plane ticket to a paying passenger and in return receives a commission from the airline based on the deal in place. However, a travel agent is selling a legitimate product and certain affiliate networks promoting get-rich-quick schemes are not. So, the obvious question is why are affiliates promoting scams when they don’t have to?
It’s All About The Money
The answer to that is quite simple and has to do with the force that drives almost every aspect of our lives. If you are not sure what we are referring to then let’s clarify; its money. There are certain vendors who are willing to pay exorbitant amounts of money in return for paying customers. We have been approached a number of times by certain networks who have offered us over $1,200 per paying client.
It’s our policy to test a certain system first, and only then recommend it. However, many affiliate marketers could care less about how a software or service really works. They are willing to promote anything which generates money for them in the form of affiliate commissions.
For example, here we can see offers from 3 different networks who are willing to pay almost 5 times the required initial deposit. That means the brokers who are paying out the commissions have to cover their advertising fee, operational costs, and taxes. In order to do that and still generate profits the customer must generate deposits of at least $2,400 on average per paying customer.
Affiliate Networks and CFD Brokers Pay Massive Commissions
CFD brokers understand that not every investor can afford to invest so much, however they are counting on the Pareto Principle to help them balance their budgets. This principle affirms that 80% of the profit is generated from 20% of the clients. So, based on that theory the name of the game is volume. The more paying clients affiliate networks are able to provide, the higher their commissions are. This is how shady crypto operations conduct their business and why brokers will do anything to get you to invest.
Unfortunately legitimate consumer products or services are not as profitable, so marketers prefer focusing their efforts on crypto scams. The reason crypto scams are so lucrative has to do with the fact that many people genuinely believe that they are about to generate profits. However, very quickly the dream turns into the nightmare and the phone starts ringing off the hook with pushy salesmen on the other side.
To sum up, affiliate networks and media agencies will not stop promoting get-rich-quick schemes any time soon. It’s your responsibility to conduct proper research and choose wisely.