High commissions hurt your profits. Low commission discourages affiliates.
So what helps strike a balance between the two? And also encourage more people to join your affiliate program?
It’s the tiered affiliate program or tiered commission structure.
This article will tell you why and how you can set up a multi tier affiliate program on your WooCommerce store.
What’s a tiered affiliate program?
It’s an affiliate program structure whereby affiliates earn commissions on the sales they make as well as on the sales generated by people they refer to your program.
Let’s make it clear with an example.
- John is your affiliate, sells your product X and earns a commission.
- Now, John referred Maria to your affiliate program, she sold your product X. In this case, both Maria and John will earn a commission.
- Similarly, if Maria refers to Laura and she sells your product X, all the three – Laura, Maria and John will earn a commission.
So, John belongs to the first tier in your affiliate program. Maria belongs to the second tier. Laura belongs to the third tier.
There can be an unlimited number of tiers.
So, in a two-tier affiliate program, or a multi-tier program (two or more levels), the first tier of commission is the same as in a regular affiliate program. The only difference is the additional tier(s), whereby affiliates also earn a commission on sales generated by people they referred to the program.
Not two tier, not three tier but set up a multi tier affiliate program for your WooCommerce store
Affiliate for WooCommerce plugin is the most easy-to-use plugin to set up your own WooCommerce affiliate program.
And now, the plugin helps you set up a multi tier commission structure for your store for an unlimited number of tiers. Full flexibility to you.
Note – This feature is in development and will be launched in early 2021.
The biggest advantage of this commission structure is that it attracts more and more people who are more interested in profiting from the work of others as opposed to doing any actual work themselves.
Obviously, the two-tier commission will not be that high as of first-tier commission, but it is an add-on to generate more money (passive income) without doing much work. (The commission rates vary for different programs)
No doubt, why many pro bloggers prefer affiliate marketing over ad networks (such as CPM, CPC models, etc). If you are not into affiliate marketing, here’s why you should start affiliate marketing right now.
Benefits of tiered affiliate commission structure
While not all affiliate programs use commission tiers, it’s something you should consider for your own.
Reduce affiliate recruitment effort and cost
It takes a lot of effort to recruit affiliates for your affiliate program. But with your affiliates already in the mood to earn more money, they go all out to recruit affiliates for your program.
The result, you spend less effort, save time and cost in recruiting affiliates.
More sales due to heavy promotion
It’s not just some affiliates but an army of affiliates that are promoting your products/brand. Thus, you get more visibility and more sales in the long run.
When your affiliates know they have a profitable path forward, they’ll strive to perform better (i.e. make more sales).
Btw, here, your affiliates need some marketing assets to promote your brand better. Images, banners, swipe files, etc. Affiliate for WooCommerce plugin lets you create marketing campaigns with ease.
Set-up tiered commission structure / tiered affiliate rates
Not just a tiered program, the plugin will also allow you in the future to set up various tiers to assign affiliate commission.
For example, for up to 100 orders, the commission rate will be 20%. Above 100 orders but less than 500, the affiliate commission will be 30%. Above 500, it will be 35% and so on.
Currently, Affiliate for WooCommerce plugin allows you to set commission plans based on products, product category, affiliate tags.
Feedback, questions, suggestions?
Before we roll out the multi-tier affiliate program feature, we would like to have your feedback on it. How useful will this feature turn out for you? What do you think can make it more useful for you? Any important suggestions?
Share your thoughts in the comments box below.