What Is A Two-Tier Affiliate Program?
A two-tier affiliate program is an affiliate model that allows you to make commissions not only on your own sales but the sales from others (your sub-affiliates) that you bring into the program as an affiliate.
A typical structure would look like this:
- 1st Tier = 25% commissions on all direct sales generated from your referrals
- 2nd Tier = 10% commissions on your sub-affiliate referrals
Typically multi-tier programs go two levels deep but there are some that go to the third tier and beyond where you’re making commissions on your sub-affiliate affiliates too. I’ve seen affiliate tiers go as deep as five levels but deeper is not always better. In fact, I would avoid any program that goes deeper than two tiers for reasons I’ll explain below.
What Tiered Affiliate Programs Are Not:
Multi-tier affiliate programs are not, and I repeat ARE NOT, the same thing as multi-level marketing (MLM) schemes. As you probably know I am not a fan of MLM programs.
What To Expect When Promoting Two-Tier Programs:
When new affiliate marketers learn about two-tier affiliate programs they usually get very excited. After all, it sounds like all you have to do is promote a good tiered affiliate program to a small army of other affiliates and then sit back on the beach while they pad your bank account with sub-affiliate commissions every day. Awesome right! Well… not exactly.
Here’s the problem: The fact is that 90% and probably more of your sub-affiliates will never earn a dime of commissions.
Because the majority of them will be thinking about the beach scenario I just explained and will focus only on signing up their own sub-affiliates who continue to sign up more and more people. Since everyone is simply recruiting instead of selling nobody earns money. There has to be product sales somewhere along the line to get everyone paid. Without sales you’re getting a percentage of nothing. Everyone in hierarchy is chasing their tail.
So how do you make any money on the 2nd tier? With the exception of snagging a rare super-affiliate to sell underneath you the very best way to make money on the 2nd tier is to simply do the work yourself:
Always promote the affiliate product, not the affiliate program.
Spend the majority of your time and effort selling the affiliate products yourself and treat any second tier commissions as a nice bonus. Further, make sure you encourage all of your sub-affiliates to do the same. You WILL eventually start raking in some effortless 2nd-tier bucks.
Another idea, one that I don’t use* but works extremely well, is to help your sub-affiliates get started and train them how to effectively promote your affiliated products. The more successful you make them the more money you in turn will make.
*Not because I don’t care but due to a lack of time. I’m not a mentor, but I can help you find one if you need one. (earning a small commission along the way of course!) Contact me.
- As stated above – Rule #1 is to promote to product first, not the program.
- Choose good quality products and services that convert well. I know… duh. But it had to be said.
- Read the fine print carefully to determine if the second-tier compensation is calculated as a straight percentage (% of revenue generated by sub-affiliates, or a percentage of a percentage of earnings generated by your sub-affiliates). A lot of two-tier affiliate programs suck so make sure you know what you’re promoting and how they’re paying you. If in doubt, reach out to their affiliate manager and ask.
- Make sure you tell your potential sub-affiliates that your cut of their earnings is paid by the vendor – not them. That way they’ll have no reason to circumvent your two-tier affiliate link to join the program.
If you’ve had success with two tier affiliate programs please share your experiences below including any programs that you would recommend.