Affiliate Marketing and its Impact among the Youth in Sikkim
Note: This article has been reworked upon, addressing certain issues pointed out by our readers
The world, it may appear, has shrunk with the introduction of free trade and possibilities plenty for anyone to make it big. But then it doesn’t come for free; such ease of doing business comes with a cost. And what might appear to be big gains in this is as good or otherwise, as the lure for winning big in any gambling is.
With the world opening up as a big market, industries and corporations needed cheaper and more innovative ways to reach their products and services to different parts of the world (i.e.) increase profits by exploiting more. This need gave rise to the BPOs, where big companies would outsource their marketing to the third world from where telemarketing became a trend because of the availability of cheaper and longer working hours. BPO (Business Process Outsourcing) soon paved the way to KPO (Knowledge Process Outsourcing), where documents were outsourced to individuals to be transcribed, for which an initial investment is made by the individual and he later gets incentive accordingly. Both these above-mentioned options, like door-to-door marketing, paid for one’s efforts. But today, in the generation of internet and marketing through social media, entrepreneurs have come up with easy short-cuts to make money through online marketing. This new technique does not require any physical movement whatsoever. One may sit at home with their mobile phone and make money with the help of multiple platforms. All you need is an active social networking account and a mobile phone or laptop. There are many such platforms that have crawled their way into the hills in the Eastern Himalayas and have many young people, especially students, are hooked on them. With online classes happening, most young people have easy access to a smartphone and internet connection. This in turn has opened up a new avenue to make money without realizing the perils of shady platforms.
Affiliate marketing is an alternate source of income that promotes online sales by creating a network of audience targeting similar products or services. In simple terms, it is internet marketing, done with the help of social networking sites. An individual joins with the platform with the intention of promoting a product or a service. Every time you promote a product and a sale happens through your reference, you get paid a commission. Digital platforms like Amazon and Flipkart utilize the help of affiliate marketing to promote their products. They payout commissions on the basis of sales promoted by individuals. In entering affiliate marketing, one must be very careful about the platform they choose as there has been a rise of shady platforms that eventually turn out to be a Ponzi scheme. One such platform promotes education on affiliate marketing by offering courses that lures and invites individuals and independent entrepreneurs to generate leads and other digital marketing techniques. To become a member, one has to make an initial payment that gives access to the sessions and course material. These members further promote the teachings on their social networking handles, and when a new person registers and joins through their reference link, the initial member is paid a commission. This is actually an example of Multi-Level-marketing (MLM) or network or chain marketing that is based on a pyramid scheme. The person generally sitting at the top of the pyramid makes the most money, and one final day the pyramid collapses and the people behind the company disappear with the money. There have been multiple instances of this happening in the past and many people losing their time and money.
Amy Shrestha, a young individual who currently works in Bangalore says, “it is a really useful and educative platform that helps young entrepreneurs learn various social network marketing techniques and also helps in generating an income alongside.” This platform promises an improvement of existing small businesses through which affiliates can earn commissions sitting at home. The platform offers action-based training where participants or members meet their targets after sessions. With the general trend of affiliate marketing catching up and rising in India post-2020 (after the pandemic), many young people are getting hooked on this as it seems to be an easy income method. But they do not seem to know how in reality, this system works and the difference between affiliate marketing in real and other shady schemes like MLM and so on.
Anuj, a school-going student, who was introduced to this scheme through his senior says, “It was my desire to learn something new and support my family financially that brought me to this platform. My parents are very supportive of the idea and I have learnt a lot about personal branding, affiliate marketing, etc. I have taken up this step to encourage young people to learn about something new and promote personal branding.”
Having said this, it is important to understand the difference between affiliate marketing and scams as we often hear about success stories, but no one really talks about failed investment in such schemes. Rewaj Chettri, a successful entrepreneur from Gangtok, elaborates on affiliate marketing. He feels it is a great platform to promote businesses and he has also been using it to promote his ventures. He says, “If you are paying money to join affiliate, you need to be very careful. Because no business will ask you for money if you are getting them businesses.” He mentions that it is important to go through the proper channel and anything that demands payment to join, will definitely have risk factors. He continues, “also affiliate marketing normally pays commission on sales which ranges from 1-30% and something above that is an indication that it’s not a sustainable model.” He stresses the importance of young minds knowledge about certain schemes and platforms before they enter them.
Nitin Ram, a research scholar from the University of Hyderabad, says, “It is important for young people to understand a few things: first, any method that promises easy money comes with a catch, and second, affiliate marketing is a risky area if one doesn’t have a working knowledge of its working and the platform you choose to become a member of must also be chosen with utmost care.”
Today’s world is blooming with multiple ‘Ponzi schemes. A Ponzi scheme is a model of investment fraud that pays existing investors with money collected from new investors who join the network. With digital marketing on the rise towards an unknown peak in this internet era, and with young people have access to the internet and mobile phones more than in the past, it is important to have enough knowledge about investments and techniques of affiliate marketing. As Rewaj Chettri mentions, any model that asks for investment for them to improve their or others’ business, cannot be considered a sustainable model. It is great that the youth in the hills have found a way to earn while they learn, but it should not lead them into a trap. It is necessary that parents and elders do monitor to some extend and have an open ear to listen to their wards. And above all, as responsible young individuals, it is important for the youth to do enough research, talk to people who have more experience than them and learn enough before they become a part of any platforms. Any platform or method that promises easy money without much effort must definitely be treated with some amount of cautiousness and scepticism. The main intention should be to learn, gain knowledge and awareness before treading towards any avenues of business and life.
By Vaidyanath Nishant. The author is a freelance writer, he can be contacted at firstname.lastname@example.org