Types of Affiliate programs

Amarnath Prabhakar March 27, 2009 0

Affiliate programs are programs that allow us to earn commissions from merchants for promoting their product on our websites. We have seen what an Affiliate program is on this blog and now we will, in this post look at the various types of Affiliate programs.

There are three types of Affiliate programs that can be taken advantage of, by website owners. These are similar to the types of advertisements that are available for the website owners. Now, for the types of Affiliate programs.

Pay-per-click – These are the type of programs that lets the affiliates (website owners) to earn a little something everytime a visitor clicks on the merchant’s product links.

Pay-per-lead - A merchant will pay an affiliate everytime a visitor signs up for a program offered by the merchant or for the newsletters the merchant sends. A lead given to the merchant for him to take forward to make a sale is the guiding factor for payments.

Pay-per-Sale – As the name suggests, a commission is paid to the affiliate everytime a visitor purchases a product from the merchant. The merchant pays a fixed commission to the website owners irrespective of the product sold and the price of it. This is by far the most popular type of affiliate program.

An Affiliate Program is also classified into,

- Commission based Affiliate Program

- Flat fee Affiliate Program

- Pay per click Affiliate Program

It is only how people call an Affiliate Program but, the basic principles remain.

The ones we’ve seen till now is for products and services offered by the merchant. There is another Affiliate Program that is built on referrals. A Merchant would always choose to have many affiliates than he currently has. Why?, because more leads can be generated through more affiliates and with more leads the number of sales that could be achieved is far greater.

Thus emergered a referral program for affiliates. There are three basic types which might look similar to a MLM (Multi Level Marketing) model.

Single Tier Affiliate Program – This is where an affiliate would not be recognized for the referrals he provides for the merchant to sign up as newer affiliates. This being the case why would someone refer a new affiliate to the merchant? for goodwill among the visitors to the website. The visitors would feel nice for the website to share their secrets to earning money

Two Tier Affiliate Program – This is where an affiliate will earn commission on a product sold by his referral affiliate too. For example I refer an Affiliate say  “A” and “A” sells a product worth $50 now, “A” would get a commission for the product sold and I would get a commission from the sale too. Of course the commission earned by me in comparison to the commission earned by “A” would be very meagre as a percentage

Multi Tier Affiliate Program - This is a program where if “A” from the previous example refers another new affiliate say “B”. If “B” sells a product “B” would get a commission, “A” would get a commission for having referred “B” and I would get a commission because “B” features in my tree. How deep this multi level goes is dependent on the merchant.

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