The New Form of Affiliate Programs: Two-Tiered Programs What They are and How to Capitalize on Them

A new twist to affiliate programs is what has become known as "two-tiered" or "sub-affiliate" programs. These are affiliate programs where you earn commissions from your directly referred sales as well as the referral sales of people who you signed up as your sub-affiliate.

First, they work like a normal affiliate program by giving you a certain percentage of sales. But, unlike the normal affiliate program they also allow you to recruit a sales force of sub-affiliates. As these people are making sales, you are also paid a percentage of their sales as well.

In theory, somebody could go out and recruit 1000s of other internet marketers who sell the product/service to their current customer base while you sit back and collect a commission from their work. However, I decided to take a closer look at these new type of affiliate programs.

First, the 80/20 rule will still be in effect. This means that 20% of the sub-affiliates you sign up will generate 80% of your commissions earned from sub-affiliate sales. More than likely over half of the sub-affiliates you do sign up will not even make one sale. Take this into consideration when deciding how much time, work, and money you will put into recruiting sub-affiliates.

Second, how does this effect the commissions you earn. Typically, affiliate programs that offer this two-tier approach will lower the commission you earn on your direct sales so they can offer the commission you earn on your sub-affiliates. For example, this could mean instead of 30% of sales, you would make 20% of direct sales and 10% of you subs sales.

So, before accepting this type of arrangement you should decide if you will benefit more by having a higher commission or being able to receive an additional commission by recruiting sub-affiliates. This all depends on the product being sold, that products (and your) target market, and price of that product. So a product geared to internet marketers would work better with this two-tier approach then a product geared to biking enthusiasts.

However, when examining the results from my efforts from the past 2+ months with a two-tier program that I am almost exclusively promoting I am finding that:

The 80/20 rule and the 50% rule both are true, and
I am earning 1/3 of my commissions from my own sales and the other 2/3 from the sales of my sub-affiliates.
Apply this to any current one-level affiliate program and I realized I could theoretically be receiving 3 times what I am currently receiving if it was in the form of a two-tier program. I think internet marketers are starting to catch on and this will become more popular over the next few months and going into 1999.

To help in your researching efforts I have compiled a list of some of the more popular and effective two-tier programs that are available. You can find them at http://www.lostandfind.com/visionpro/twotier.html

About the Author

Kevin Wilke is a full-time distributor for the Network Marketing company USANA. He also publishes VisionPro MLM E-Training, an unbiased generic training newsletter and website for all network marketers. He lives in Arlington, Texas USA. He can be reached via email at kevin@lostandfind.com phone:(817)640-5590 fax:(707)215-6686 or the web http://www.lostandfind.com | http://www.lostandfind.com/visionpro



kevin@lostandfind.com
http://www.lostandfind.com