How would you earn hustle-free commissions simply by referring other affiliates to promote a particular product?
How would you get a commission even when the sale is not made by you?
The answer to both these questions is ‘Tiered Commission in Affiliate Marketing.
In this article, we will discuss:
1) What is Tiered Commission in Affiliate Marketing?
2) How does it work?
3) Who can benefit from it?
4) Pros and Cons of having a Tiered Commission Structure
What is Tiered Commission in Affiliate Marketing?
A tiered commission structure is a system where affiliates are rewarded not only for their own sales but also for the sales made by other affiliates to whom they have referred.
It is a win-win situation for both the Merchant as well as the Affiliates.
The merchant can expand his/her customer base and the affiliate can earn more commission without putting in any extra effort.
How does it work?
Suppose you are an affiliate of JvZoo.com, an online marketplace for digital products.
You promote one of the products on their site and make a sale.
The customer you referred buys other products from JvZoo as well and you get a commission on those sales too.
Now, suppose this customer also refers to other customers.
You will still receive a commission on those sales as well.
This is how a tiered commission structure works – by rewarding affiliates for not only their own sales but also the sales made by other affiliates whom they have referred.
Who can benefit from it?
A Tiered Commission Structure can be beneficial for both Merchants as well as Affiliates.
Some of the benefits are listed below:
Benefits for Merchants:
- Increased Customer Base: By offering a tiered commission structure, merchants can attract more affiliates to promote their products. As more affiliates join in, the reach of the merchant’s products increases and so does the customer base.
- More Sales: As the reach of the merchant’s products increases, so do the sales. The tiered commission structure motivates affiliates to refer more customers, which in turn results in more sales for the merchant.
Benefits for Affiliates:
- More Commission: The major benefit of a tiered commission structure for affiliates is that they can earn more commission. They not only get a commission on their own sales but also on the sales made by other affiliates whom they have referred.
- Passive Income: With a tiered commission structure in place, affiliates can earn passive income. They don’t have to put in any extra effort to earn commissions on the sales made by other affiliates.
Pros and Cons of having a Tiered Commission Structure
Pros:
- The increased customer base for merchants
- More sales for merchants
- More commission for affiliates
- Passive income for affiliates
- A win-win situation for both merchants and affiliates
Cons:
- Requires more effort to set up
- It may not be suitable for all types of products/services
- It may not be sustainable in the long run
How can you get started with it?
If you are a merchant, you can start using a tiered commission structure by setting up different tiers of commissions for different affiliate levels.
For example, you can offer a 10% commission for first-level affiliates, 5% for second-level affiliates, and 2% for third-level affiliates.
If you are an affiliate, you can start using a tiered commission structure by promoting products/services that offer such a structure.
You can find such products/services by searching for “tiered commission” on Google or any other search engine.
Conclusion
As you can see, a tiered commission structure is a win-win situation for both merchants and affiliates.
It motivates affiliates to refer more customers, which in turn results in more sales for the merchant.
Affiliates also get to earn more commission without putting in any extra effort.
If you are looking to increase your customer base and sales, or if you are an affiliate looking to earn more commission, then a tiered commission structure may be right for you.
I hope this article has been helpful and I wish you the best of luck in your affiliate marketing journey.
If you want to learn more about affiliate marketing, you can check out my other articles:
How to Research a Niche For Affiliate Marketing
The 6 Best Traffic Sources to Promote Your Affiliate Offers (Free & Paid)
11 Things to Do Before Sending Traffic Visitors to an Affiliate Offer
Thank you for reading!