Affiliate Programs: Single Tier vs Two or More Tiers Compensation?

5 replies
I am currently setting up an affiliate program for our products and am looking to either run it as a standard affiliate program or with two tiers of compensation, on personal sales and sales of referred affiliates.

So what is the better way to go, is it worth the added complexity of explaining the affiliate program and tracking to go with a 2 tier system or would I be served just as well with a standard affiliate program?

I've been thinking a 50% commission if I use a standard affiliate program or 40% on personal sales and 10% override on sales of referred affiliates.

Currently our product is selling for a one time payment, soon after all core features are released we will be going to annual licensing for updates and support, which will of course generate future residual commissions as well.

Looking forward to the responses!


~Rick
#affiliate #compensation #programs #single #tier #tiers
  • Profile picture of the author a2hosting
    I wouldn't go any further than a second tier because then you're going to start looking like a pyramid scheme. I would suggest some sort of second tier system. This is a good way to make your affiliates work for you. I wouldn't worry too much about explaining what that means. Most affiliates are going to understand what it is and if not, just tell them that for each person that signs up for an affiliate account under their affiliate link, they earn a commission.
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    • Profile picture of the author WP Leads Press
      I think that I will likely do a 2 tier affiliate program, I have been involved with MLM for a long time, I just don't want to turn my affiliate program into one exactly.

      It seems that most people I have spoken with are leaning towards a 2 tier program, plus earning off of your team is always a bonus.

      Originally Posted by a2hosting View Post

      I wouldn't go any further than a second tier because then you're going to start looking like a pyramid scheme. I would suggest some sort of second tier system. This is a good way to make your affiliates work for you. I wouldn't worry too much about explaining what that means. Most affiliates are going to understand what it is and if not, just tell them that for each person that signs up for an affiliate account under their affiliate link, they earn a commission.
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  • Profile picture of the author egoldzone
    I like 2 tier .............
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  • Profile picture of the author Christian Swift
    I think two tier has the advantage over single tier, as people want to know that they will get commission if people they introduce introduce somebody else too. It is the simple case of 'I introduced him, so why shouldn't I get a cut?'

    I think any more than two tiers down gets a bit messy though, and has the potential to be viewed as a pyramid scheme by those who can't tell the difference!

    Christian
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  • Profile picture of the author JensSteyaert
    That's a good question because i'm actually contemplating this myself for my site.

    If anybody has experience with both 1 tier and 2 tier affiliate programs for his/her site, please share your thoughts

    I would guess that 2 tier affiliate programs are better, but that would just be a guess, i haven't seen them used very often though, just a couple in Jvzoo...
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