Why Two-Tier Affiliate Programs are Best
When you join an affiliate program or start an affiliate program of your own, you have to decide whether it will be a single tier or two-tier affiliate program.
With a single tier program you earn a commission on any sales you make and that is it. If you are running your own affiliate program, you pay your affiliates a commission for any sales they refer and that is all.
However, with a two-tier program, affiliates are allowed to recruit sub-affiliates and are paid a small percentage of the sales these sub-affiliates generate. For example, the affiliates may earn a 30% commission for selling product X himself; and when one of the sub-affiliates makes a sale, the affiliate may get a 10% commission as well. This is very profitable for the affiliate as he can recruit an army of sub-affiliates, all earning commissions for him without any effort on his part except for the initial recruiting process.
If you are starting an affiliate program of your own should it be two-tier or single tier? Some might shy away from the seeming expense of a two-tier program. But is it really that expensive? Many affiliate program managers make the wrong decision on this.
Now what is the situation?
1) Your income increases because of increased sales.
2) You have a much larger customer base to which you can sell ‘backend’ products.
3) An increase in your income because of the life time loyalty of the customers referred by your affiliate.
The little extra in affiliate sales commission pay outs will be more than compensated for by the exponential sales increase. This is why the two-tier affiliate program is a guaranteed winner and should be the automatic choice for potential affiliates and affiliate program managers.
© John Lynch
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