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Is Wealthy Affiliate a pyramid scheme? Is it MLM?

Wealthy Affiliate logo

Wealthy Affiliate is a popular affiliate marketing training platform.

(read my in-depth Wealthy Affiliate review here)

Wealthy Affiliate cannot be considered a strict pyramid or Multi-Level Marketing (MLM) scheme, but it does have elements of both.

According to money.howstuffworks.com:

The main characteristic of a pyramid scheme is that participants only make money by recruiting more members.

Investopedia defines MLM like so:

Multilevel marketing is a strategy some direct sales companies use to encourage existing distributors to recruit new distributors who are paid a percentage of their recruits’ sales.

By those definitions, at first glance Wealthy Affiliate would qualify as both a pyramid and MLM scheme.

But let’s try give them the benefit of the doubt.

A WA member named Jerry Huang wrote a post at my.wealthyaffiliate.com explaining why he doesn’t consider Wealthy Affiliate to be multi-level marketing.

Member blog post inside Wealthy Affiliate
Member blog post inside Wealthy Affiliate

To summarize Jerry’s points, WA can’t be considered MLM because:

  • WA doesn’t restrict you to only promoting WA itself.
  • WA doesn’t require you to recruit your friends or family members.
  • WA doesn’t require you to do any face-to-face selling.
  • WA has one one level of referrals (ie not multi-level).
  • WA members don’t “recruit” people. They “invite” people.

Okay, some fair distinctions.

(Except for the last one. That’s just silly.)

But before we give WA a pass here, let’s see what founder Kyle Loudon had to say about MLM’s in this 2015 blog post:

Kyle's blog post about MLMs

Some excerpts from that article, followed by my comments…

Excerpt from Kyle's article about MLMs

There are two core training series inside Wealthy Affiliate:

Online Entrepreneur Certification
Above: WA’s description of the Online Entrepreneur Certification
Affiliate Bootcamp
Above: WA’s description of the Affiliate Bootcamp

If you choose door number two above – the Affiliate Bootcamp series – you are, in fact, always trying to “suck in that next person to your downline.”

And while you are not required to pay continuously for WA in order to promote it, you do receive double commissions on your referrals as a paying member.

Back to Kyle:

Excerpt from Kyle's article about MLMs

Gee, that’s a little awkward.

Because all WA members are ranked according to their contributions to the WA community (details here), and the top 25 are referred to as “Ambassadors.”

They even have a leaderboard:

Wealthy Affiliate Ambassador leaderboard
Above: The top of the Ambassador leaderboard inside WA.

Kyle again:

Excerpt from Kyle's article about MLMs

Hmm.

Did you see my other article where I calculated that WA generates revenues of $10 million per year?

And the part in my full Wealthy Affiliate review where I went through 50+ recent WA “success stories” and discovered that very few of them could actually be considered successful?

🤔

Back to Kyle:

Excerpt from Kyle's article about MLMs

By that definition, anyone who follows the Affiliate Bootcamp training inside WA is part of an MLM scheme.

What else you got, Kyle?

Excerpt from Kyle's article about MLMs

And that, my friends, is EXACTLY my impression of Wealthy Affiliate in 2020.

An impression strengthened by a public blog post by WA member TDomena – #8 on the Ambassador leaderboard above, btw – in August 2019:

A blog post by TDomena inside Wealthy Affiliate

Did you catch that?

It seems TDomena is finally making good money as an affiliate marketer… by promoting Wealthy Affiliate!

And remember Jerry Huang from earlier?

It’s the same story with him:

Jerry Huang Wealthy Affiliate
Screenshot from Jerry’s website – which I’m not going to link to – where Jerry happily shows how 85% of his affiliate commissions came from referring other people to Wealthy Affiliate.

Unfortunately, this is what most “success stories” look like in WA nowadays.

And so, I repeat:

Wealthy Affiliate cannot be considered a strict pyramid or Multi-Level Marketing (MLM) scheme, but it does have elements of both.

See my full Wealthy Affiliate review

Watch this video for the highlights…

Or click here to read my in-depth review of Wealthy Affiliate »

Wealthy Affiliate Alternatives

I’m on a mission to review all the top affiliate marketing courses.

Here’s my progress so far…

Course Rating Review
Authority Hacker's TASS 4.6/5 Authority Hacker review
Income School's Project 24 4/5 Project 24 review
Commission Hero 2.6/5 Commission Hero review
Savage Affiliates 2.2/5 Savage Affiliates review
Udemy affiliate marketing courses 2/5 Udemy affiliate marketing courses review
Affiliate Marketing Mastery 1.5/5 Affiliate Marketing Mastery review
Affilorama 1.5/5 Affilorama review
Making Sense of Affiliate Marketing 1.5/5 Making Sense of Affiliate Marketing review
Wealthy Affiliate 1/5 Wealthy Affiliate review
Six Figure Mentors 0.7/5 Six Figure Mentors review
ClickBank University 0.5/5 ClickBank University review
Super Affiliate System 0.5/5 Super Affiliate System review
See all the affiliate marketing courses we've reviewed »
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