What are multi-tier commissions?
Multi-tier commissions are a type of commission structure commonly used in affiliate marketing programs. In this commission model, affiliates are not only rewarded for their own sales, but also for the sales made by the sub-affiliates.
Post Affiliate Pro offers a unique feature that allows you to set up up to 100 tier commissions. With multi-tier commissions, you are able to pay commissions to parent affiliates based on sales made by their sub-affiliates.
It is possible for marketers to adapt their affiliate tree to meet the needs of their affiliate program. Commission structure can be configured separately for each level and marketers can either set up fixed rates for affiliates, or they could go a different route and choose to set up their commission by the percentage which is calculated from the actual total cost of the tracked sale. This is much more common among marketers with large affiliate trees, as it enables them to compensate all affiliates for their contributions without significantly impacting their profit margins.
How do multi-tier commissions work in Post Affiliate Pro
You can set up multi tier commissions by going to Campaigns > Campaign manager > Edit your campaign > Commissions settings tab > Edit.
In a multi-tier commission structure, you can assign a commission to each affiliate in the affiliate tree based on how it is configured 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. Suppose affiliate A has a sub-affiliate, B, who refers a sale. B receives the standard affiliate commission (1st tier commission), while A receives the 2nd tier commission. In this case, your commissions set up in your campaign would look something like this:
- 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 pot. As the percentage trickles “up,” it reaches the parent affiliate, then the grandparent, and so on. For example:
If Timothy is a referrer of a $100 sale, then:
- Timothy gets $20 (1st tier commission)
- Richard gets $10 (2nd tier commission)
- David gets $5 (3rd tier commission)
- Jane gets $3 (4th tier commission)
- Marry gets $2 (5th tier commission)
For this sale, you would pay your affiliates $40 (20+10+5+3+2). In this example, Marry, being the great-great-grandparent will get the lowest percentage of the commission due to her being the top affiliate in the affiliate tree. If the affiliate tree does not have that many affiliates, then an option called Rest Commission can be implemented manually in your platform to manage where ‘the rest’ of your commission percentage will go.
It’s also possible to pay all your affiliates differently, regardless of where they fall in their affiliate trees.
Frequently Asked Questions
What is a multi-tier commission?
The multi-tier commission is a method of payment that allows you to define commission payouts independently in multiple affiliate trees. Affiliates are rewarded not only for their own sales but also for sales made by their sub-affiliates.
Why use a multi-tier commission structure?
Using a multi-tier commission structure can help marketers find quality affiliates to promote for them. Multi-tier commissions incentivize affiliates to find sub-affiliates, increase reach, and generate passive income. This commission structure can help grow an affiliate program, drive more sales, and increase brand visibility.
