Modified on: Wed, 28 Feb, 2024 at 5:19 AM
Multi-tier commissions, also known as multi-level marketing (MLM), are a popular commission structure in affiliate marketing programs. Our platform supports up to 7 tiers of commissions, enabling you to reward parent affiliates for sales generated by their sub-affiliates. This incentivizes affiliates to expand their network, increase their reach, and earn passive income.
In multi-tier commission structures, affiliates earn commissions not only on their own sales but also on the sales made by their sub-affiliates. With our platform, you have the flexibility to customize commission structures for each tier of your affiliate program. You can set fixed rates or percentages based on the total sale value, allowing you to compensate affiliates while maintaining profitability.
TABLE OF CONTENTS
How do multi-tier commissions work
In a multi-tier commission structure, you can assign a commission to each tier in the campaign so that each affiliate benefits from the sales of their sub-affiliates. The percentages provided in the following example are meant to serve as an illustration.
Commission (1st tier): 20%
2nd tier: 10%
3rd tier: 5%
4th tier: 3%
5th tier: 2%
The commission rates would be fairly straightforward if you had a setup like this. As a result of making the sale, the first tier gets the majority of the commissions. As the percentage trickles “up,” it reaches the parent affiliate, then the grandparent, and so on. For example:
If A is a referrer of a $100 sale, then:
A gets $20 (1st tier commission)
B gets $10 (2nd tier commission)
C gets $5 (3rd tier commission)
D gets $3 (4th tier commission)
E gets $2 (5th tier commission)
For this sale, you would pay your affiliates $40 (20+10+5+3+2).
Our platform simplifies the process of managing multi-tier commissions, providing transparency and efficiency in your affiliate program. With our robust features, you can track commissions accurately and reward affiliates for their contributions effectively.
Step 1: Create a new affiliate campaign
To learn more about the process check out our detailed guide here
Step 2: Enable multi-tier commissions
In step 2 of the process, click on Advance Commissions settings to enable multi tier commissions
Choose the number of tiers you want.
Step 3: Configure tier-specific commissions
Set default or product-based commissions for each tier to incentivize affiliates at different tiers.
