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2
Tier Affiliate Programs
What
are they?
2
Tier affiliate programs are set up to maximize the income for
the affiliates who use them. It also enables the company offering
the affiliate program the ability to rapidly grow their affiliate
base.
Here
is (a basic idea) of how it works:
Company
A offers an affiliate program that pays its affiliates 10% for
each sale that affiliate makes.
This is a 1-Tier program (also known as straight commission per
sale).
Company
A then decides it wants to grow their affiliate base to get more
people selling their products. So, they introduce a second tier
affiliate program. Each affiliate still gets the same 10% commission
per sale, but now, the same affiliate can earn 4% on the sales
from affiliates they refer to the system.
The
idea behind this is, as an affiliate yourself, you have the ability
to sign up other affiliates under you. In an ideal world, the
more affiliate you sign up on your "2nd tier" below
you, the more money you can make. It is really a win-win situation
for everyone. The company you are working with gets more people
selling their product. The affiliates have the ability to earn
money from the work of the affiliates they refer.
The
2 tier system is becoming one of the more popular systems in affiliate
marketing these days.
As
people become tired of the multilevel marketing schemes (MLM)
and realize it typically is not as lucrative as they thought,
2 tier systems will pick up more and more. Not that MLM systems
don't work, but the idea of "you refer 10 people who refer
10 people who refer another 10 people, etc" looks good on
paper, but rarely goes as expected.
So,
what is a common 2-Tier payment commission?
We
typically look for programs that offer at least a 15% first level
and 5% second level comission. Obviously this varies with the
products being sold and the profit per product the company can
make.
Many
information products such as ebooks, etc can offer first level
payment of 50% and 2nd level at 20% in some cases because there
is almost 100% profit per sale. Even if they pay their affiliates
all of that money, they, themselves will be making great money
as well. Plus, the money for the product owner is coming in from
the work of the affiliates rather than their own work.
Click
here to see reviews of some 2-tier affiliate programs and
determine which one will work best for you.
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