Affiliate programs as part of your Internet marketing plan can both (1) generate
sales leads for your products and (2) increase the products and services you are able to
offer through your own Website. When you offer your own affiliate
program, you build an Internet team to sell your products and generate sales
leads. When you
participate in others’ affiliate programs, you expand Website offerings
so you can sell more through our Website.
Some Definitions of an Affiliate Program
According to the
Interactive Advertising Bureau, an affiliate program is “an agreement between two sites in which one site (the affiliate) agrees to
feature content or an ad designed to drive traffic to another site. In return,
the affiliate receives a percentage of sales or some other form of compensation
generated by that traffic.”
Wikipedia explains affiliate marketing as "a
widespread method of promoting a website, in which an affiliate is rewarded for
every visitor, subscriber and/or customer provided through his efforts. It is a
modern variation of the practice of paying finder's-fees to individuals who
introduce new clients to a business. Compensation may be made based on a certain
value for each visit (Pay-per-click), registrant (Pay-per-lead), or a commission
for each customer or sale (Pay-per-Sale)."
Definition of a Two-Tier Affiliate Program
The
Internet marketing reference site MarketingTerms.com defines a two-tier affiliate program as an "affiliate program structure
whereby affiliates earn commissions on their conversions as well as conversions
of webmasters they refer to the program."
Tiered affiliate programs may have one or more layers. When evaluating
multi-tier programs, it is important to determine if the program is a true
affiliate program or a fraudulent business opportunity. In a typical affiliate
program (tiered or otherwise), there is no required investment. It is a good
idea to spend some money on marketing the product, but the marketing programs
you choose and the amount of money you spend marketing the product are entirely
up to you. You earn money in an affiliate program by referring sales leads to the
parent company through your affiliate link. When one of your leads results in a sale, you are paid a
commission. There are numerous sound, legitimate affiliate programs
available.
Fraudulent business opportunities, on the other hand, typically require you
to spend money upfront. There are often promises of great riches, but slim
chance of success. In pyramid-type schemes, you earn money by recruiting others
into the program, promising participants the same riches you were promised. The
parent company and "top of pyramid" participants generally make money by selling
the opportunity to other opportunity seekers, not by generating sales leads for
an actual product or
service. The Federal
Trade Commission keeps a section on fraudulent business opportunities and
often takes legal action against promoters of such programs.
