New affiliate programs 2 tiered
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New affiliate programs 2 tiered |
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An affiliate is an entity with a relationship with a peer or a larger entity. We review "New affiliate programs 2 tiered". Affiliate marketing typically refers to the internet version of thne traditional agent_referral fee_sales channel concept. An affiliate is an individual or a website which links back to another website such as http://www.vancouverfinder.org/. When a reader of the website clicks on a link, they are connected to the master affiliate and if they purchase something the affiliate receives a small payment, usually a percentage of the money the customer spends (could be up to 50% of the sale). Sometimes compensation will be written in shorthand as tier1/tier2 (ex. 10%/5%). Affiliates can also be referred as advertisers or publishers. Internet affiliate is a multi billion dollar industry and is expected to rival traditional affiliates in the near future. Some advertisers offer so called multi-tier affiliate programs that distribute commission into a hierarchical referral network of sign-up's and sub-affliates. It's an affiliate program structure whereby affiliates earn commissions on their conversions as well as conversions of webmasters they refer to the program. In particularly we review here: New affiliate programs 2 tiered. (Please see above). In practical terms: publisher "1" signs up the affiliate program with an advertiser and gets rewarded for the agreed activity conducted by a referred visitor. If publisher "1" attracts other publishers ("1", "3", etc.) to sign up for the same affiliate program using her sign-up code all future activities by the joining publishers "2" and "3" will result in additional, lower commission for publisher "1". It is important to read the fine print to determine if the second-tier compensation is calculated as a straight percentage (% of revenue generated by "B") or a percentage of a percentage (% of earnings generated by "B"). Snowballing, this system rewards a chain of hierarchical publishers who don't know of each others existence, yet generate income for the higher level signup. An affiliate network is composed of a group of merchants and a group of affiliates. Merchants join the network and affiliates join the network in order to advertise the merchant products in exchange of a commission from the merchant. Affiliate networks present some great advantages for the merchant and the affiliate. The merchant gets potential access to a wide networks of affiliates. The affiliate does not necessarily need to make a certain sale amount for one particular merchant but rather for the entire range of merchants before getting paid. The affiliate also puts more trust in a network rather than a merchants independent affiliate program. The merchants pay the overall commission to the network. The network then distributes the money to each affiliate who made the sale. Use of affiliate links Sites made up mostly of affiliate links are usually badly regarded as they do not offer quality content. Affiliate links work effectively when placed in context among quality content. One common use of affiliate links is shopping directories and or price comparison websites. However, these sites should do their best to enhance the web shopping experience. You probably won't take this advice - most people don't - but I'm going to tell you anyway. About 90% of people try to make money from two-tier affiliate programs simply by signing up other web site owners and hoping they will make money for you. Why doesn't that work? Because those web site owners will copy your silly technique - and sign up lots more people who won't earn you money. Sorry. If you're using two-tier affiliate programs you have to do the work yourself, and treat the second tier commission as a bonus. If you are looking for good two-tier affiliate programs to join, the three most important factors are: An excellent product or service. A generous commission. A site which is designed to SELL. If you're really lucky, you'll also earn lifetime commissions - your customers are yours for life. You don't just earn a commission on one sale, you earn a commission on every subsequent purchase by that customer. Affiliate programs can theoretically have an infinite number of tiers, but there are practical limitations. As tiers are added, program attract webmasters who are more interested
in profiting from the work of others, as opposed to doing any actual
work themselves. FEATURE ARTICLE: When's an Affiliate Program Not an Affiliate Program? Source: www.clickz.com Public relations experts will tell you one of the hardest things to change is human perception -- especially when perception is derived by negative experience. Recently, I received this email from a ClickZ reader: Dear Jim, I recently signed up as an affiliate for [Company X], and I am dying a slow death. As they recommended, I purchased all the programs they suggested and a dozen others. Now, I'm frustrated and feel ripped-off. Instead of getting sales, other marketers (like me) respond to my posts, trying to sell me their stuff. I'm swimming in a hundred emails from different companies who are also trying to sell me their product, upgrades, credit repair, lower mortgage interest rates, etc. I spent several hundred dollars "signing up" for all the recommended "packages," but now see who's really making the money. Where did I go wrong? Is there a "right" way to enter the business of affiliate marketing and make some money? Can you recommend affiliate programs where an Internet neophyte like me can make money, instead of paying? I hope you can give me some guidance. It seems affiliate marketing isn't what I thought it would be. I'm about to give up. Warmest, Frustrated Marketer Right off the bat, I knew what was wrong. Frustrated Marketer is a multilevel marketing (MLM) scheme victim. The most discouraging part of this story is Frustrated Marketer, as many of us did in the beginning, confused affiliate marketing with MLM. What Is MLM? The Federal Trade Commission's definition: Multilevel marketing plans, also known as "network" or "matrix" marketing, are a way of selling goods or services through distributors. These plans typically promise that if you sign up as a distributor, you will receive commissions -- for both your sales of the plan's goods or services and those of other people you recruit to join the distributors. Multilevel marketing plans usually promise to pay commissions through two or more levels of recruits, known as the distributor's "downline." You know what these are. You've seen them before. Remember the guy you met at the bowling alley who wanted you to put $1,000 in his pyramid scheme with promises you'd make it back in a week? You had to guarantee you'd get two more people to cough up the money, and so on, and so on... Then there's your pesky neighbor, who keeps inviting you over each weekend to try to persuade you to become her sales "partner" for those expensive candles. MLM has moved online, spreading from inbox to inbox. It grows more popular every day as enrollees seek fresh recruits with a simple click of the mouse. Neophyte entrepreneurs such as Frustrated Marketer are sucked in by slick copy and big promises, until they learn it's not what they thought. This can leave them with a sour taste in their mouths -- and often lighter wallets. MLM Is Not Affiliate Marketing Affiliate marketing is a referral-based marketing strategy. Merchants pay affiliates commissions for referring business to the merchants' Web sites. The difference? Merchants do not pay for advertising on affiliate sites until a sale is transacted. (Note: A two-tier affiliate program could be construed as an MLM tactic). Get Smart My point isn't to bash MLM in favor of affiliate marketing. It's to educate people such as Frustrated Marketer about the differences. I should point out there are many MLM success stories out there and legitimate businesses using the MLM business ethically and very effectively. You can find a comprehensive list of affiliate and MLM programs on ClickZ's sister site, Refer-it.com. Budding affiliate entrepreneurs must learn to distinguish the differences between the programs. Frustrated Marketer found out the hard way: The methods are different and aren't right for everyone. How Do I Know If It's MLM? To borrow from Jeff Foxworthy: If it claims you'll make income through the continued growth of your "downline"... it's probably MLM. If it requires new members to purchase inventory to remain in the program... it's probably MLM. If it compels each member to recruit additional members to qualify for the program's benefits... it's probably MLM. The Biggest Similarity No MLM or affiliate program will get you rich instantly. Both require hard work and commitment to make sales. Choose the one that's right for you and dig in -- but choose wisely. As always, please let me know if you have something to say (and I know you do)! FEATURE ARTICLE: The Line Between TiersSOURCE: http://www.revenews.com For the majority of merchants with revenue sharing incentives like affiliate programs, their effort is about new customer acquisition. It's a numbers game -- the bigger the net you throw in the ocean, the more fish you catch. Affiliate program models provide a great way for merchants to replace "one big net" (advertising) with thousands of fishermen with nets of all sizes (affiliates). It's an inevitable extension for the merchants to apply the same concept that works for acquiring customers to the task of recruiting new affiliates. It's just catching another kind of fish with the same net, right? Maybe not. Thus, the "second tier" is created -- providing incentives to affiliates for recruiting other affiliates. Merchants and affiliate networks are using different models for this incentive. In the classic "second tier" model, your incentive would be a percentage of each of the sales generated by the affiliates you recruit -- a revenue sharing model that rewards you for recruiting affiliates that produce. Many affiliate networks are avoiding a true "second tier" and instead provide a one-time recruitment "bounty" -- LinkShare and BeFree, for example, utilize this affiliate recruitment strategy. Others, like Commission Junction, use a hybrid model, combining a one-time bounty with a second tier commission. At the other end of the spectrum are multi-level marketing programs, who provide incentives for even deeper tiers of people (frequently up to five or more levels deep) which are collectively referred to as your "downline" in MLM-speak. The geometric growth in your income potential looks impressive at first glance, but rarely works out. The MLM industry, in general, suffers from a real image problem among the public -- so many MLM programs become little more than pyramid scams, with income generated from "sign-up fees" instead of sales. Rick Bier, who's portal site 2-Tier.com specializes in just affiliate programs with a second tier, once told me via email that "any program with more than two tiers is inherently unethical." As someone who was burned in my youth by an unsavory (and later prosecuted) MLM, Rick's strong opinion fascinated me. His basic argument: having more than a second tier feeds the greed of people who want to make "money for nothing", shifting all the affiliates' focus towards building a bigger downline instead of selling product. I think Rick is right, although I know others would disagree with us that there is a magical distinction between two-tier programs and those with three or more tiers. While there is certainly a difference between "pyramid schemes" and multi-level marketing programs (which Glenn Sobel explores in another article), all of them rely on the same motivations. Many of them, for example Ken Envoy's now much ballyhooed program, draw "earning pyramids" for you as part of the recruitment that show how much money you'll make off of each tier. At the same time, though, everyone else in the network is also focused on building their downline. In that situation, is there anyone left to actually sell any products through that network? In general, I believe programs that go beyond two tiers are themselves glued to the pyramid metaphor and the seductive illogic of geometric growth. In many cases, you'll find elaborate networks with no products (like MonsterBook.com) or a single product (such as SiteSell.com) -- they set up their network in advance of their products, a risky business for the people participating. So in this slippery world of tiers, how do you look at a program and decide if they are too focused on the network instead of sales? Regardless of your thoughts on the merits of multi-tier programs, you should keep the following questions in mind before signing up: Does the program require a setup fee or that you "keep inventory"? These are frequent techniques used by pyramid schemes to generate income without sales (a topic Glenn explores in more detail.) How many products does this program include? If they only have a small number of products, the whole network (no matter what size it is) has to focus on "new sales of the same product". Building a multi-tier network (which takes energy in addition to sales) that doesn't have a constant stream of new products increases the risk of the stream "running dry". Multi-tier commission becomes irrelevant if the network has nothing to sell. Does recruiting a second tier compliment what my site does? Just because your site is effective in reaching people who would buy a product doesn't mean you reach other webmasters. You've got to know who your audience is to determine if, in fact, making money from an extra tier means more work. Are they overselling my income potential? Of course, most affiliate programs pitch their programs as "easy money". Multi-tier programs, though, are famous for using "income trees" as part of their pitch, which read something like: If you recruit 100 affiliates Then your network (only three levels deep) includes over 1,000,000 people who's sales you're earning commission on! Keep in mind that even small numbers, when multiplied geometrically, lull you into believing you'll have amazing results. Keep in mind that most affiliate programs are happy if 20% of the people who sign up for their programs even end up making a link (let alone earning commission). Distrust any program that projects your income from any figures higher than that -- they are overselling your income potential to appeal to your sense of greed. This article is copyright © 1999, GMD Studios. All rights reserved About the Author LATEST NEWS ON: New Affiliate Programs 2 Tiered
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