Multi-tier affiliate marketing programs give affiliates the
ability to earn commissions on their direct sales as well as
the sales of other affiliates they direct to the merchant. They
are promoted as a way for affiliates to earn additional money
without generating additional sales through their sites or adding
additional merchant companies.
Who does this make sense for?
Affiliates who are willing and able to research the companies
offering such programs. Unfortunately, this type of company
uses the same business model as the old offline Multi-Level
Marketing companies, which turned some participants off because
they were stuck with inventory of a product they were not prepared
to sell and the buyers didn’t care to buy.
That said, online programs are different. The sellers hold no
inventory, and therefore assume no risk if the product doesn’t
move. They get also get a percentage of the sales of other affiliates
they introduce to the program. But you want to be sure that
every affiliate you add to your program and feature on your
valuable site real estate will earn its keep.
How should you check them out?
Buy some of the product, and honestly see if it is of the quality
your site visitors would expect. Is it unique, better or cheaper?
Understand why this company would need to pay you to recruit
more affiliates. Are they very small, without the administrative
and sales staff to do affiliate recruiting? Or does convincing
an affiliate to sell their products take so much effort that
it’s not cost effective?
Do they pay you for new affiliate sign-ups, or just
the commission on the sales they make?
What extra administrative work will such a program bring you,
if any? Can you refer them to other affiliates that aren’t
in competition with you, or are your relationships primarily
in your own space, potentially diluting the sales you’d