By taking the way profit is divided between level of referrer as the point of difference, affiliate systems could be classified according to their tier number.
Affiliate system, is the second best way to make money with internet right after selling some service or goods via internet. By joining an affiliate system, a person doesn’t need to have their own goods to sell. Instead, they could simply help a website to sell their goods or services and get a share of profit from the business owner. For talented online writers and blogger, combining their skill with affiliation to the right product could become a great boost for their income.
There are hundreds and thousands of business adopting affiliate marketing system all around the internet. Each of them provide their unique products and services that their affiliate only have to market, while the responsibility of providing the products and services fall to the hand of the affiliate business owner. Due to the different nature of products and services they provide and the information technology support they could afford, each affiliate system have different policy about how much profit they are going to share for affiliates and the tier system of said affiliate system.
Single-Tier Affiliate System
Single-Tier Affiliate System is the basic form of affiliate system. This system allow anyone to join their affiliate network, but doesn’t allow any affiliate to have more affiliate marketer under them. This system was chosen by the owner of some affiliate business because of its simplicity.
Understanding how Single-Tier affiliate system work is very simple on both vendor and affiliates. It is basically the same with working as a salesperson for a business. You sell the product and get the commission. The sum of commission is usually proportional with how many sales you can bring for the business.
The commision calculation may vary between business. Some business provide flat commission rate, while the other increase the commision rate according to the sales volume an affiliate brought for the business.
Two-Tier Affiliate System
Two-Tier affiliate system allow super-affiliates to recruit more affiliates under them. These super-affiliates are responsible for educating the affiliates under them about the knowledge required to market the products. In turn, the business also compensate both the super-affiliates and affiliates under them according to the volume of sales they generated.
Multi-Tier Affiliate System
This affiliate system resembles what we usually know as multi-level marketing. Multi-tier affiliate system allow virtually all of their affiliates to recruit new affiliates under them. The recruiting policy differs from business to business. Some business only let affiliates with certain accomplishments to recruit more affiliate under them, while the other let affiliates to recruit more affiliates as soon as they join the affiliate network.
Business with products that require extensive study to understand about tend to adopt no-recruitment-without-accomplishment policy. This policy is usually taken to give older affiliates enough time to accumulate product knowledge and sales experience. This is because they need to pass these product knowledge and sales experience to newer affiliates when they are allowed to recruit more. This system ensures that the mentor (older affiliate) is not overwhelmed by the number of students (newer affiliates) they have to teach.
In other hand, business selling common products tend to let affiliates to recruit more affiliates as soon as they join the network. This policy is usually taken to ensure some survival-of-the-fittest kind of competition occur inside the network. Selling products that require only minimum amount of learning could be done by almost everyone. But not everyone are motivated enough to do so. By allowing affiliates to recruit more affiliates as soon as they join the network, the business could get as many motivated affiliates as possible.
Multi-Tier affiliate system is the richest kind of affiliate business in terms of its variation. For the affiliates, this system promise ongoing and growing passive income for successful affiliates. For the business employing the system, this system ensure the flow of knowledge and experience inside the network.
Understanding Multi-Tier affiliate systems however is far more difficult than understanding other type of affiliate network, both because of the complex mathematic sequence required to understand them and the sheer number of variation of them. Some variation of these systems could support themselves forever while the other is a complete waste of time. Any would be affiliates have to be able to tell the difference between them. Most of the time however, the difference could only be told by going through failures and accumulating experience.
Other articles written by Ori Sonata:
April 30th, 2009 at 11:18 am
Very informative…thank you!
-Fresh Writing