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Place your TextLink AD here free
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.
Let's look at an example. You have an affiliate program up and running and an average affiliate joins your program. Mr.Average has a web site that receives average traffic. He also has an ezine with thousands of subscribers published monthly. Mr. Average posts your affiliate links to his web site and promotes your product to his ezine list.
Initially, he generates good sales. However, a point comes when he saturates his market with your product and his sales begin to drop. He begins to lose interest in your program and your sales remain small. What happens if you set up a two-tier program? Rather than trying to keep your commission pay outs small, you motivate your existing affiliates to recruit other people to your program. This will exponentially increase your affiliate sales. Would it not be worth paying the referring affiliate a percentage of their sub-affiliates' sales? Now when Mr.Average joins your affiliate program this is what would happen. When he has saturated his market with your product, he would now promote your affiliate program to his customers and ezine subscribers. Many of Mr.Average's customers and subscribers decide to join the affiliate program. This in turn will motivate Mr.Average to continue promoting your products and recruiting affiliates.
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.
4) An army of sub-affiliates who will sell your products, and in turn promote your affiliate program to their customers and subscribers.
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
For details of the SiteSell affiliate program with lifetime customer commissions, residual commissions through renewals of Site Build It, and 2-tiers of income go to: http://affiliates.sitesell.com/finian.html
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The Echo Nest and 7digital Partner to Give Developers a DIY Online Music Store ... PR Newswire (press release) Developers will earn affiliate revenue from every MP3 sold through their applications. The companies will unveil the new developer offering at the London ... |
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The Walt Disney Company Reports Third Quarter Earnings MarketWatch (press release) Higher affiliate revenue was due to contractual rate increases, and subscriber growth, which was driven by the launch of a new network in the United Kingdom ... DIS Summary: Delivering the Goods Goldman Raises Estimates On The Walt Disney Company (DIS) Analysts Offer Mixed Picture of Disney's (DIS) Q3 Results |
Last Week in Bizball: The Importance of Regional Sports Networks The Biz of Baseball Although ad revenue for RSNs was down 6.0% to $608.8 million in 2009, affiliate revenue was up 9.0% to nearly $4 billion. According to the same report, ... |
4 Ways Disney Can Make Its Recovery Stick Seeking Alpha (blog) Much of Disney's better-than-expected financials were rooted in one-time circumstances: ESPN's higher affiliate revenue deferral, a real-estate sale at its ... |
Great Value Online Gambling Bonuses Punters Hero We know many poker affiliate type sites will promote poor quality online poker rooms simply for the affiliate revenue. We find it refreshing that ... |
W3i Launches Content API for Effective Delivery of Free Downloads PR-CANADA.net (press release) ... access to the full W3i content catalog of over 500 free downloads, creating new content experiences for users -- driving affiliate revenue growth. ... |
Legg Mason Faces Tougher Steps Barron's ... corporate and receiving approximately $15 million in distribution revenue from group sharing in affiliate revenue from retail assets under management. ... |
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