Multi-Tier Affiliate Programs: Gain vs. Risk?

How do you address your competitive concerns?

[adfree]

Running multi level marketing affiliate programs on your site might provide an added value because of down-line signup's that earn you more income while you do not have to move a finger.

BUT: they compete with you and might grab even more valueable market share.

Dare to share how you address this concern?

Differentiation, only run multi-tier affiliate programs for products and services that are just remotely related, actively building down-lines? There are many ways of addressing this, what's yours?

[skibum]

In 3+ year of affiliate marketing I've only made about $30.00 from downline affiliates. It would be nice if they provided more competition and generated more residuals but it seem that unless you can get known performers to join the downline, the chances are very slim that anyone who signs up under you will generate sales outside of what they buy themselves.

[buckworks]

I've made more than Skibum from subaffiliates, but it's still far less than 1% of my affiliate income. That's with over a thousand subaffiliates in one program or another.

If you want to earn money from affiliate marketing, plan on doing it yourself.

[eljefe3]

If you know of good affiliates and of a new niche or product, you can do well with downline affiliates. I had quite a few months of over 5 figures just from downline affiliates. I think this was an exception rather than a rule though of downline affiliates.

[adfree]

Question was: how?

[eljefe3]

See below on what I wrote in the prior post.

>>If you know of good affiliates and of a new niche or product.

It takes a great product and knowing quality SEO affiliates and introducing them to each other.

[michaelbs]

most affiliates who are "in the know" would sign themselves up on multi tier programs anyhow! Why have someone else collecting commissions on your work?

[wingslevel]

last week i read an article (racking my brain, but can't remember where) about how traditional direct selling firms like avon and tupperware were changing to a multi-level structure. problem was their turnover was high and they had to put huge resources into recruiting new reps. as a result they have increased sales because the new reps are better and stick around longer - also the cost to compensate the upstream reps was less than what they had been paying in the traditional model.

made me think about the aff. model and the web - i wonder if there are any folks out there who really work harder on developing their downstream business than their own natural sales - i know that when i go looking for affs, i find tons of content sites that don't have any aff links (some don't even have adsense) - seems like someone could specialize and do well here?

[Michael Anthony]

Gotta say that having a second tier of people that you know are high producers works very well.

For one UK program, I've increased volumes for the merchant from my own 100 leads per month to around 7,000. I now make a smaller percentage from the 7,000 leads than I did from the 100, but overall it's a lot more money.

And as for cannabalising my own productivity of 100 leads by creating my own competitors - who cares :)

This said, I know a lot of amazingly productive affiliates, which gives me an unfair advantage with this sort of thing.

As mentioned above - if you are connected to your second tier and you know they'll deliver, it's a no-brainer. Otherwise, your concerns are justified in that it may kill a currently successful income stream.

[wingslevel]

I think it is all very interesting, but I wonder how many of us know 100 good affiliates?