Is this process of marketing legal ?

Hello,

Im an Entrepreneur and wanted to ask a specific question about a marketing campaign that we discussed with several marketers on our group.

We are building up a game though for the marketing side for each user that a user invites will be rewarded if that invited person buys something everytime with a commision.

In other words Example :

User A invites user b , User b buys item worth 100 $ 20% of that money will be commisioned to user A. Everytime user b buys something that User A will be commisioned with 20% of the money they user B spent. Now the major question is it legal ? By this way user A will allways earn money if a refferal is invited and every time buys something...

Best Regards

 

Yes that is legal, as long as the main subject of the game is not to invite people to earn money, because then it is a pyramid scheme

If it's actually a game that you can play, also without inviting people, it would be fully legal. It's called an affiliate program, and others are already doing it.

 

Yes, this technique is absolutely legal. Many people are using this marketing technique for promoting gaming sites.

 

I don't see anything wrong or illegal here. many of them are using these kinds of promotion to get sales.

 

But lets say a user can invite as many people as he wants and he sits back and earns the money from the refferals "if they buy" will still that be concidered as affiliate program ?

 

Yep.
Affiliate marketing in simple terms: You (the owner) decide to sell a product. User X comes to you, registers as an affiliate and starts promoting the product you are selling, to his friends, family and so on. Once a user that came to your website and purchased the product you're selling (he came to your website because User X telled him about your product), User X is credited with a commision from that sale or some other incentive.

 

Thanks mron3 I knew it also like that, but I came up with a intinct that it might be illegal because the methodology is a bit different then normal affiliate marketing systems.

 

There isn't anything illegal in it. Its quite legitimate and a good mean to increase your sales and more satisfied customers too because they are earning a commission. This is increasing customer's loyalty...

 

It is mlm, called as multi layer marketing and it is almost legal in most of the countries.

 

Its common and legal, no issues at all. Infact this type of marketing is done even outside of web based affiliates. Insurance is one sector in India where this has been going on since more than 2 decades as I know.

 

Yep. This is completely legal like most of the others have said, as long as the main goal of the game isn't to keep inviting more people, because that is a pyramid scheme. Good luck with your game I haven't seen many games like this. Should be fun.

 

This is MLM (Multi-Level Marketing). It is legal, but quite dangerous. You depend on convincing others to follow your example and become sellers like you, and you have no way to know if you’ll really receive your commissions…