With any business, you should be looking to take advantage of every growth opportunity to maximize potential income. One of the biggest and often untapped sources of revenue is affiliates.
When you are building your affiliate program, you can gain new affiliate partners faster by creating a Multi-Level affiliate program. This encourages your existing affiliates to build their own network, referring new affiliates to join your affiliate program.
So how can you create an MLM system that could potentially become one of your biggest revenue sources? In this post, we explain everything you need to know.
What is Multi-level affiliate marketing?
You might have heard MLM called multi-level marketing, sub-affiliate marketing, or multi-tier affiliate marketing – it all means the same thing.
With MLM, each of your affiliates will have the opportunity to create their own team of sub-affiliates that will be promoting your products, making sales, and recruiting even more people to the team.
Every member of the team is usually rewarded for commission on their own sales, as well as a portion of extra commission from all their sub-affiliates sales too.
How does a tiered affiliate program work?
Let’s say that you are part of an MLM program, and have recruited 5 new affiliates to your affiliate network. These new affiliates will be your “tier 1” sub-affiliates.
Of those 5 sub-affiliates, 4 of them recruit some of their own affiliates. These new affiliates would then become “tier 2” sub-affiliates in your network.
Both “tier 1” and “tier 2” are generating sales, so you get a commission from them both.
You can have further tiers, and everyone above the final tier will usually make a commission when a sale is made. The amount of commission earned will usually reduce for each tier.
What are the benefits of multi-level affiliate marketing?
Having more people invested in selling your products and using their own marketing and promotion channels is already a great thing for your business – but what are the other benefits?
Anything that you do in your business should bring in more money than it costs, and affiliate marketing is amazing for that. You won’t need to have a high spend on marketing – because your team will be using all of the tools at their disposal too.
While you might need to put some effort into choosing the right affiliates at the start, after the program has been running for some time, you will be able to remain mostly hands-off if you choose to.
The continued cost of affiliate marketing is low too. While you might have some software to help manage the program, for the most part, it will require low investment.
It’s not often you hear “low risk” when it comes to business, but affiliate marketing is one of the safest ways to maximize your revenue. Since for the most part, it will only cost you money (commission) if affiliates successfully generate sales for you. If an affiliate generates no sales, you pay them nothing.
Affiliates usually only sign up for products that align with their audience or the audience that they intend to create. This means that they will be promoting your products or services to users that most likely meet your target audience. This is a very cost-effective way to market yourself to an audience which can otherwise be expensive to attract.
When you have the right software in place, your affiliate program will become easy to scale. Hence, as your business grows, so do your capabilities to accept more affiliates and increase your income (and theirs) even further.
The best plugin for a multi-level affiliate program
Coupon Affiliates is a WordPress plugin that allows you to build a powerful affiliate program for WooCommerce.
Using the Multi-Level Affiliates module, your current affiliates can encourage new users to sign up as affiliates on your website. They will then receive an additional percentage of revenue as the parent affiliate for all sales that their sub-affiliates refer to you.
You must first enable the “Multi-Level Affiliates” module in the plugin settings before you can begin using multi-level affiliates. A new tab will emerge to change the MLA module settings.
The MLA dashboard must then be made. To do this, add the following shortcode to a new page: [couponaffiliates-mla]
Your current affiliates can access the MLA dashboard by viewing this page after it has been completed.
Your MLA dashboard
Your parent affiliates will have access to the following via the Multi-Level Affiliate Dashboard (MLA Dashboard):
- View every discount issued by their sub-affiliates, along with a link to their affiliate dashboard.
- View the network’s whole tree diagram.
- Check out the orders that their sub-affiliates referred and the commission they received.
- They may share their exclusive referral link with someone directly or use an email address to quickly invite someone to their network.
- Manage and ask for payouts for the commission they have made from the referrals of their sub-affiliates.
MLA Settings & Tiers
The MLA functionality may be tailored to your needs using several options.
The “Multi-Level Affiliate Tiers” are the main settings you should customize. You may choose the commission percentages for each tier and have an endless number of them.
Depending on the affiliates tier in their network, these percentages specify how much commission the parent affiliate will receive from all their sub-affiliates.
The commission for multi-level tiers is calculated based on a portion of what the main affiliate makes. This does NOT reduce the earnings of the main affiliates.
For instance, if you set “tier 1” to 20 percent and the primary affiliate receives a $20 commission for an order, the tier 1 parent will receive a $4 commission, and the main affiliate will still receive a $20 commission after commission calculations. Therefore, the commission paid would be $24 in total.
How do the network tiers work?
We’ll assume a base commission rate of 25% for the main affiliate, with the multi-level tier rates set to set to 20% for tier 1, and 10% for tier 2.
- Firstly, John invites Fred to become an affiliate.
- Fred is now a tier 1 affiliate in John‘s network.
- Fred then invites Sally and Tom to become an affiliate.
- Sally and Tom are now a tier 1 affiliate in Fred‘s network, and a tier 2 affiliate in John’s network.
- Sally refers a new sale at $200 and gets 25% commission, which is: $50.00
- Fred‘s earnings are based on 20% of Sally‘s commission, which is: $10.00
- John‘s earnings are based on 10% of Sally‘s commission, which is: $5.00
- Therefore, the total commission paid out for this sale is $65.00
And the rest is profit to your business.
And that’s it! The fastest and most efficient way to create an effective and profitable Multi-level affiliate program for WooCommerce, with a simple plugin.
Got questions? Feel free to send us a message.