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10 Tips To Help You Create Your Own Money Making Affiliate Program
1. View your affiliate program as a partnership between you and your affiliates, and make it your priority to develop good relationships between you and your affiliate sales force. 2. Answer any questions your visitors or affiliates have about your...
Give Your Affiliate Program A Lift With A New Or Improved Product
If an affiliate program is an important part of your business, your profits are only as good as your affiliate members. Sales drop like a rock when they get discouraged or lose interest. You will see the dreaded signs if you frequently visit your...
How To Start Your Own Affiliate Program
How To Start Your Own Affiliate Program by J. Stephen Pope 1. Why Start Your Own Affiliate Program? Multiple web sites and distributors selling your product can result in increased sales and profits. Unlike conventional advertising, affiliate...
Promoting your Affiliate Programs with Articles
If you are not creating articles for your website and your affiliate programs, you should. Why? Even though it may seem like a lot of work, and it may take you time to build -- articles add a valuable commodity to your site -- content. And my...
Setting up Your Own Affiliate Program (part two)
This article is the second of a two part series on setting up your own affiliate program. In addition to starting an affiliate program, you must manage it and keep track of it. The following information will show you how Managing and tracking your...
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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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