A 2 tier affiliate program is one you where you earn money on your own sales as well as on the sales of affiliates that you recruit.
An important distinction here is that this is not multi level marketing (MLM). In a affiliate program you are only paid on sales made by your immediate recruits. In multi level marketing you are paid on many levels below you.
So let’s take a look at some of the pros and cons of 2 tier affiliate marketing programs, and what can make them some of the most profitable products to be involved with.
1. You earn money on the sales of affiliates that you recruit
This allows you to multiply your efforts. You’re only able to do so many sales a month personally, but if you were to also have 100 affiliates underneath you all selling just think about how much more money you would earn.
You only need one or two real go-getters to make a lot of money in a 2 tier affiliate program and, because there are so many people involved in this industry today, getting others to join is relatively easy if you make them fully aware of what’s in it for them if they sign up to the program you promote.
2. You do not need your own product
What makes this the best program for everyone involved is that all the set up work has been done for you. The product is created, the marketing materials are readily available, commissions are calculated and paid on your personal sales as well as on the sales of your team, and so on.
Products that don’t require manufacturing (such as ebooks) tend to be extremely successful in affiliate programs. The reason for this is that the merchant can afford to pay a higher commission. Once the product is created, there are very few ongoing costs for the owner. Therefore it’s not uncommon to see them offering commissions as high as 50%-75%. This in turn makes selling the product far more attractive to the money driven affiliates.
A 2 tier affiliate program for a digital product will tend to pay a slightly lower amount on the first tier but offers you the opportunity to make far more money in the long run by recruiting people to sell on the second tier.
3. You get to work with and create your own sales team
If you’re the type of person who enjoys working with other people then 2 tier affiliate marketing programs are great for that. Some of the best affiliate programs on the market today are ones where you are provided training that helps you work to develop a successful team and this team attitude can be carried to as high a level as you want.
For example you can create contests within your own team to increase sales and help everyone make more money.
There are not a huge amount of downsides to two tier affiliate programs but the biggest one people tend to come across is that the affiliates themselves fall into the management trap. This is where they begin to spend more time trying to develop their own team and less time on their personal sales.
Because affiliate marketing programs are so free and accessible it makes recruiting affiliates extremely easy. The problem is getting them to a point where they are successful themselves. There is a high attrition rate in affiliate marketing, and you can find yourself wasting a tremendous amount of time helping people who will never have the drive to be successful.
One other disadvantage is that you are giving up a percentage of your personal sales to participate in the program. There is only so much money that can be paid out and by spreading it out over 2 levels it takes away from the first tier commissions but, like I said before, managed correctly this should not be a problem.
There are many good 2 tier affiliate programs on the market today and if you enjoy communicating with people they are an excellent way of working towards your financial freedom.