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11 Affiliate Tips
I have compiled a list of 11 affiliate tips which I think will help you with marketing your web site and affiliate programs. 1. Spend a lot of time trying to get a high ranking in search engines for your web sites. Learn as much as you can about...
Affiliate Marketing - Conversions
What is a good converting site? Well they say a “good” converting site is one that sells 1 in 100 visitors. Now once you’ve chosen which affiliate program you want to promote using Google Adwords you may be thinking “well I’ll just let it run for...
How Do You Treat Your Affiliates?
If you've been working online for any length of time you know that one of the best and fastest ways to make money with your products is to offer an affiliate program. So let me ask you this - how do *you* treat your affiliates? ...
Not An Affiliate? Why Ever Not?
If the idea of pursuing a living on the net has repeatedly crossed your mind but you still haven't found a way to implement it, then affiliate programs are going to break the ice for you. Affiliate programs are a lot like learning how to...
Tips For Setting Yourself Apart From the Affiliate Marketing Crowd
It's no secret there is money in affiliate marketing, in fact there is great money in affiliate marketing if you align yourself with a good company with good products. The reason there are some failures and jaded feelings about affiliate...
 
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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  • generate more sales in any affiliate program part five

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