There seems to be, perhaps, a little misunderstanding about what an affiliate program is.
In simplest terms, you are an independent business person marketing someone's products or services for a commission.
You get paid when a sale is made, or in some cases, when a valuable service is provided (ie, someone clicks to a page).
Affiliate marketing is not the same as what is often called network marketing or MLM. It DOES use networking, but it is not MLM.
MLM has a commission structure that purports to reward only for sale of product, while in reality, it richly rewards for downline building via each company's rather complex commission structure. MLM companies are legal business structure under the law if they follow the rules, but it can sometimes be very difficult to determine if an MLM company is following all the rules, and that is one of the risks of getting involved. Many MLM companies have had trouble with the law, and many have been shut down, leaving distributors looking to start over in something else. Contrary to what is most often claimed, a profitable MLM business is NOT simple for most people to build. Some do go on to become very wealthy.
Many affiliate companies offer compensation on several levels of downline, but it is much, much simpler than MLM. The payments are generally simply an decreasing percentage of real sales as you go down in depth. An example would be: 30% commissions on your own sales, 15% commissions on the first level of directly sponsored affiliate sales, and 5% commission on the sales of their first line. (a simple three level compensation plan). There are no volume sales, wholesale sales, preferred customer sales, etc., but only direct sales on which a commission is paid.
All that is necessary for an affiliate company and its affiliates to be legal compliance is compliance with tax laws and a proper money back policy. Rarely are affiliate programs targeted by lawmakers.
You can make a lot of money with affiliate marketing, and it does increase your bottom line when you recruit active affiliates. But, if you want to be successful as an affiliate marketer, you need to set the example of successfully bringing in sales.