Are Multitier Affiliate Programs Beneficial?

Affiliate programs, be they single tier, two tier or multi tier, may vary in terms of overall quality and reliability, commission rates, statistics, the amount of help that the parent site offers in marketing the products or the services they sell. By thoroughly understanding the program, you can capitalize on your true earning potential.

What is a multitier affiliate program?

Zalando Affiliate Program are a method by which you, the strong link in the chain, help harness the traffic coming to your website by way of clicks and sales to the website you refer. This helps generate revenue, without any investment or expense of selling anything yourself.

A multi tier affiliate program works for most people. A multi-tier program is generally up to 4-5 levels deep, meaning you could get paid a lot of money by simply referring tons of people to the program and wait for them to start making the sales. Ideally, the more affiliates you sign up, the more money you can make. It is a win-win situation for you as well as the company. This system is also known as multilevel marketing (MLM) due to its multiple levels of potential commission earnings.

About the different types of affiliate programs

There are 4 main types:

Pay per sale
Pay per lead
Pay per click
Residual income
Each type of program has its advantages and disadvantages, and each is relevant for a particular site and situation.
Pay per sale affiliate programs

Pay per sale programs are almost always commission-based programs. They pay a predetermined percentage commission on the revenue generated by the sale of products or services on the site, irrespective of the volume of sales. However, some flat-fee programs also operate on a per sale basis. In such a case, a visitor has to actually purchase and pay for a product or service before you qualify for a referral commission.

Pay per lead affiliate programs

Many pay per lead affiliate programs which include mortgages, loans, insurance policies, surveys and follow-ups operate on a flat-fee per lead basis. Each qualifying lead earns you a referral fee wherein you are paid a predetermined amount for every visitor who carries out at least one purchase or transaction at the site, irrespective of the value of that transaction. A flat-fee program can be as simple as ‘US $10 per new customer’ or ‘US $5 per order’, or they can have a more complex fee structures depending on what mix of products or services are sold depending on the number of leads a particular affiliate manages to close in a particular month.

Pay per click affiliate program

Also known as click-through programs, this program pays a small amount for every visitor sent to the target site. Typical payments range from $0.01 to $0.20 or more per visitor. Some pay-per-click programs also pay on a second-page-click basis which is even trickier. In this case, the visitor has to click on one of the links on the page they get to after reaching the affiliate site; second-page clicks can cut earnings by about 75%-90%.

Residual income

With residual income affiliate marketing program, you are paid whenever the customer returns to the website to purchase another product. Generally residual income comes in more than once, such as on a monthly or on a quarterly basis

Different tier affiliate programs and their benefits

These programs rely on different levels or tiers by which payments are made. While a single-tier program only pays for direct sales or traffic generated for them, the two-tier program pays for traffic or sales from the recommended members. And, in multi-tier program, you get compensation for a wider number of members from the affiliate network.

Single-tier affiliate programs

Single-tier affiliate programs reward only direct transactions. You get no reward for signing up other affiliates. Single-tier affiliate programs are suitable for almost all sites; but, your ability to ‘pre-sell’ the product or service on offer, the number of visitors you are able generate for the target site and ultimately the number of visits that can be converted to actual sales, will at the end of the day determine your earnings.

Two-tier affiliate programs

Two-tier affiliate programs reward transactions generated by affiliates, as well as reward affiliates for bringing in new affiliates into the program. Payments in this program are either made on a commission or on a flat-fee basis. Alternatively, some companies also pay a flat affiliate referral fee. This program works positively for people who believe that they have a flair for recruiting other productive affiliates. However, a program that places more emphasis on recruiting instead of sales should be looked at with suspicion. In addition, this program may not always appeal to people who are vary of recruiting people who will be directly in competition with them.