Two tier affiliate programs are affiliate business opportunities that pay independent business partners (or affiliates) in two levels.
The first level of payment is the commission the affiliate earns when they directly refer a customer to the company or merchant that manufactures or sells the product or service.
The second level of payment available to participants of a two-tier affiliate program is payment on the sales made by people they introduce the referral business to.
What is the philosophy behind certain merchants offering to pay affiliates two levels of commission instead of just one?
The concept is pretty simple and somewhat innovative.
You see, the two tier affiliate programs model takes advantage of the fact that people are generally selfish by nature.
What does that mean in this context?
Let me explain.
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Here's a fact of life.
Most people do not like to reveal their source of income, especially if it is a business opportunity that is generating substantial cash flow for them. They often keep that as a secret for fear that their income from the business opportunity may dwindle if too many people get a wind of it and get involved with the same business opportunity.
Yes, competition can reduce your market share and your earnings!
Consequently, most people will be inclined to tell others (even their sworn enemy) about an opportunity to earn extra income if they know that the person's participation in the program will enrich them somehow.
That is exactly the philosophy behind companies operating two tier affiliate programs.
In effect, the companies operating a 2 tier affiliate program are saying to their existing affiliates: "We pay you X amount of the sale price when you refer customers to us. We are now willing to give you Y amount of the sale price if anyone you tell about our affiliate program (and who register for the program through your referral link) makes a sale".
For example, in a two tier affiliate program the two levels of commission payout to affiliates may be as follows:
Level 1 commission: 25 percent of the sale price
Level 2 Commission: 10 percent of the sale price
If the above are the commission levels, it means that if John participates in this particular affiliate business opportunity and refers a customer to the merchant that operates this referral program, the merchant will pay John 25% of the product price as commission.
However, if John introduces Philip to the business and Philip makes a sale, Philip will earn 25% of the product price as commission while John who introduced Philip to the business will earn 10% of the product price as commission.
From the above scenario, it follows that if John tells a lot of people about this business opportunity via a massive promotion, and hundreds of them register for the program as affiliates (or independent sales rep of the merchant), he can expect to earn commission at least every month if at least one person in his team of sub-affiliates makes a sale.
This means that John can actually earn commission in months that he did not personally make a sale.
If he does make a sale (or several sales) in a particular month and the affiliates (or sub-affiliates or other marketers he introduced to the business also make several sales), then he will earn much more than he would have earned if his earnings from the program was dependent on only his own sales performance.
The two tier affiliate programs model gives independent business partners (or affiliates) of a merchant the best opportunity to make the most money from participating in an affiliate business opportunity.
In simple words . . . two tier affiliate programs are among the best affiliate marketing programs there are in the referral business world.
In addition, when you participate in a 2 tier affiliate business opportunity and earn commission based on the sales effort of others, we say that you're leveraging on the sales performance of other people to grow your sales.
Yes, you're literally getting other people working for you without paying them a salary!
Any merchant (or company) can implement the affiliate program marketing model irrespective of industry.
However, the most popular are . . .
. . . and a host of others.
We will discuss this more extensively in subsequent articles in this premium retirement planning guide.
In the meantime, use the links above to learn more about affiliate programs we recommend.
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