Many people think that it is better to have a multi-tier affiliate program that has more than two tiers. However, from our experience this is definitely not the case. In the article written by the Affiliate Marketing expert Geno Prussakov, he states that "there are also affiliate programs out there where you have to pay a sign up fee to join, which should immediately raise a red flag in the affiliates head, and so should the presence of multi-tiers too".
We feel that you should not have more than two-tiers for the following reasons:
1. Having more than two-tiers can overly complicate your affiliate structure.
If you have 3 to 10 tiers or more, when it comes time to payout your affiliates it will become a nightmare when you try to reconcile all the referred sales and see who needs to be paid and how much each affiliate needs to be paid.
2. Most of the Top Companies only offer just one tier and two tiers at most.
If you look at most top consumer companies that offer affiliate programs, they all usually just offer one level and at most two.
3. Affiliates do not like to compete with the affiliates under them.
Having a multi-tier program can pull sales from people that are at your top level. This can discourage those affiliates that are at the top because they will typically only earn a smaller commission from those referred sales by affiliates below them.
4. Multi-tier structures can deter Affiliates from signing up.
Many people that are looking to sign up for affiliate programs are often turned off by a multi-level structure. When seeing a multi-tier structure, they may think of an MLM or network marketing system and do not want to be a part of that complex system.
5. The goal of an affiliate program is to form a direct relationship with people that want to market your product.
If you have a multi-tier program, this dilutes the relationship you have with these affiliates because the are essentially under other affiliates. When creating a program you want to be able to easily communicate with all affiliates and convey all the same terms.
Omnistar Affiliate software offers customers the ability to setup a maximum of a two tier program. This will allow an affiliate to sign other affiliates up under them and earn a commission from the referred sales of those affiliates. Our two-tier structure is very straight forward, easy to setup and manage and will give your affiliates the ability to not only promote your products, but your affiliate program as well.
If you do not have an affiliate software system and are looking to start your own affiliate programs, you can check out Omnistar Affiliate Software.