What are multi-tier commissions?
Post Affiliate Pro offers a unique multi-level marketing feature that allows you to configure many different types of commission structures with up to 100 tiers of affiliates.
In this robust affiliate marketing platform, marketers can build their affiliate tree to adapt to their affiliate program. Commission structure can be configured separately for each level. Marketers can either set up fixed rates for affiliates. This could be for example $20 for every click on a banner. Or marketers could go a different route and choose to set up their commission by percentage of the overall sale. This is much more common among marketers with large affiliate trees as it ensures all affiliates earn money for their efforts without giving too much to loose profit.
First tier is king
The first tier is king only if you allow it to be. The software gives every affiliate a personal downline or a personal tree. A multi-tier commission system allows marketers to configure each affiliate tree so that their parent-affiliates receive a commission for the sales of their sub-affiliates. Suppose affiliate A refers a sale to affiliate B, who gets the standard (1st tier commission) and affiliate A gets the 2nd tier commission.
In this case, you commissions set up in your campaign would look something like this:
- commission (1st tier): 20%
- 2nd tier: 10%
- 3rd tier: 5%
- 4th tier: 3%
- 5th tier: 2%
If you had a setup such as this, the commission rates are pretty straightforward. The first tier gets most of the pot because they made the sale. The percentage then trickles “up” to the parent affiliate and then to the grandparent and so on:
When Petra is a referrer of a $100 sale, then:
- Petra gets $20 (1st tier commission)
- Edward gets $10 (2nd tier commission)
- Regina gets $5 (3rd tier commission)
- Darius gets $3 (4th tier commission)
- Pablo gets $2 (5th tier commission)
You would pay $40 (20+10+5+3+2) in commissions to your affiliates for this sale. In this setup, Pablo, being the great-great-grandparent bets the lowest percentage due to him being the top affiliate in the affiliate tree. If the affiliate tree does not have that many affiliates, then an option called Rest Commission can be implemented manually in your platform to manage where ‘the rest’ of your commission percentage will go.
And of course, if you would like to pay all of your affiliates differently regardless of their place in their respective affiliate trees, you can also do that. You are completely free to choose how you would like to run your affiliate program in Post Affiliate Pro.
Why not just pay every affiliate equally across the board?
As much as marketing managers, affiliates also hunt for opportunities. The best deals and the biggest commissions are also important considerations. While affiliate marketing is an easy way for businesses to market, affiliates who choose to participate in campaigns can make quite a pretty penny in passive income.
It’s possible you will lose affiliates if you use a multi-tier commission structure. However, you will gain affiliates who are willing to work for a dollar. By weeding out those who would be better suited to another niche, you’ll be able to decrease your costs. As a result, those you hire will appreciate their work more.
Along with the Forced Matrix feature, it could be a strong MLM feature that motivates your affiliates to search for new affiliates, which will in turn earn more commissions for them.
Knowledge base resources
- Types of commissions - Post Affiliate Pro
- 10 reasons your small business should start an affiliate program -
- Why Affiliate Marketing Is Great For Travel and Tourism Businesses
- Pay-by-sale vs ongoing commission for your affiliate program
- How much should you pay your affiliates?
- 7 Reasons Why Affiliates Aren’t Promoting Your Online Store
- 11 Best Practices to Engage and Nurture Successful Affiliates
- Types of affiliate marketers - Post Affiliate Pro