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Affiliate Marketing Opportunity
Every Affiliate Marketing Opportunity At Your Fingertips Making the decision to start up a web-based business is one of the best ways to take your financial future into your own hands. The dream of starting your own business is...
Affiliate Marketing Tips
1. Learn the basics about affiliate programs and advertising on the major search engines. A great place to learn this is the Internet Cash System . 2. Partner with only legitimate affiliate programs. You want to make sure you get paid don't you?...
Affiliate Programs that Earn a Profit
This information may be helpful for everyone, regardless of how long you have been in the affiliate business, or even if you are just getting started. First, a good affiliate program can be hard to come by. It needs to offer decent commissions,...
Getting Additional Revenue through Affiliate Programs in the Internet
Getting Additional Revenue through Affiliate Programs in the Internet If you are one of those people who are Internet savvy and are keen on getting more income by just affiliating with commercial websites and referring people to them, then...
Why 2% Of Affiliates Make 98% Of The Sales
Why 2% Of Affiliates Make 98% Of The Sales Have you ever wondered why most affiliates who promote products don't make a living at what their doing? If you think about it, the answer is quite simple. No real training from someone who has...
 
Is a 2-Tier Program Affiliate or MLM?

What is an affiliate program?
An affiliate program pays a sales-based commission to participants when they attract paying customers to the business. Such a program is free to participate in as an affiliate. If you bring in sales, you will receive income from the program. If you fail to bring in sales, you have only lost whatever money you may have spent in your unsuccessful marketing attempts.

What is MLM (Multi-Level Marketing)?
Multi-level marketing (also known as network marketing) programs operate on a similar principle of paying people who are not traditional employees of the company to drum up business. Although the offline world of MLM has programs with varying reputations and degrees of success, the online MLM industry is reputed to consist mostly of scams. If you introduce someone to the business as a seller (as opposed to a customer) you can earn money either directly for referring them or indirectly as commissions for sales that they make. Depending on the number of levels in the program, you may also earn money when one of your referred sellers introduces a new seller to the program.

Sounds pretty clear, right?
Time to add another layer of complexity. A 2-tier program rewards you for customers you attract and the customers that are attracted by any seller you directly refer to the program. If based on the definitions above, you're thinking that a 2-tier program sounds like an MLM with 2 levels, you're absolutely right. Unfortunately, the definition of MLM with which we're working doesn't tell the whole story.

What is MLM really?
Much of the negative reputation that both online and offline MLM programs have earned can be attributed to the fact that most require a fee to participate in the program. The fee may be one-time or (more commonly) ongoing, but to participate in the program you must pay this fee


regardless of whether or not you earn any money. Since the vast majority of people who participate in these programs never see a profit, someone pursuing this type of marketing can and usually does actually lose money in the attempt.

So where does a 2-tier program fall?
Almost every program that describes itself as 2-tier, does not require any fee to participate. Given the definition of affiliate programs and our more detailed definition of MLM above, a 2-tier program does not comfortably fit in either category. So what is it? A 2-tier program is actually a multi-level affiliate program. What do I mean by that? Like MLM, you will be rewarded for introducing new sellers to the program, usually by receiving a small percent of their commissions. Like an affiliate program, your profit is based on the sales you and your referrals generate as opposed to membership fees or referral bonuses. As with an affiliate program, participation in a 2-tier program is also completely free.

Distinguishing multi-level affiliate programs from MLM
In theory, if a program meets the two requirements of basing revenue on sales and allowing free participation, it is a multi-level affiliate program whether it has 1,2, or 10 tiers. Conversely, a program that only offers 2 tiers but charges a membership fee is an MLM attempting to disguise itself. So when investigating online income opportunities, don't get caught up in the hype of the number of levels a program offers. The real litmus test of a sound compensation plan: your revenue should be based on sales. When you get a check, either you brought in a paying customer or someone in your downline did.

About the Author

Clay Mabbitt writes articles about online income opportunities. He is the founder of a community of Internet entrepreneurs sharing knowledge and experience at http://www.affiliatescreen.com

 

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