Different Levels of Affiliate Marketing

There are three levels of affiliate marketing: Single -Tier Two-Tier Multi-Tier These different tiers are based on the commission structure or how commissions in an affiliate marketing program are paid out to affiliates.

Single-Tier

In this level of affiliate marketing the affiliate is paid a commission based solely on his or her efforts. This means the affiliate is paid based on sales or leads generated as a result of his/her promotion via ads or links placed on websites etc. Pay Per Click and Pay Per Lead are examples of Single-Tier Affiliate Marketing. If John Rich has an ebook and decides to pay his affiliates 40% for each sale that is generated by them, then this is a perfect example of a Single-Tier affiliate program.

Two-Tier

In this level of affiliate marketing the affiliate is paid a commission based on his or her efforts as well as the efforts of other affilates who he/she refers to the affilate program. This means the affiliate is paid based on sales or leads generated by his/her affiliates and also sales and leads generated by his/her own promotions or ads.Hence the affiliate gets an opportunity to earn by referring others to the program and once they become affiliates then the affiliate who referred them also earns a commission from their sales. The more referrals or recruits an affiliate has signed up under them then the higher will be their commission earned. Lets take the example of the case above where John Rich has an ebook and is paying his affiliates 40% for each sale. Now lets say John Rich now wants to aggressively grow his business and decides to introduce a Two-Tier program. He decides to pay the same 40% to his affiliates however he also decides to pay them 10% on the sales generated by affiliates they refer. Hence this serves as motivation and is very benificial to the parties involved as John Rich will benefit from an increase in the number of affiliates selling his product and the affiliates who refer other affiliates will benefit from an increase in commissions.

Multi-Tier

This is very similiar to the Two-Tier affiliate program however payment is across multiple levels hence the affilate gets paid additional commission at more levels. Putting it another way you as an affiliate in a Multi level affiliate program would earn commissions from your affiliates referrals down to a certain level usually 3 to 5 levels deep. This is also commonly referred to as Multilevel Marketing or MLM. If John Rich decides to move from a Two-Tier to Multi-Tier affiliate marketing program then continuing from the above John Rich would continue to pay 40% on the 1st level (the initial affiliates), 10% on the 2nd level (other affiliates signing up under the initial affiliates) , 5% on the third level etc.