Multi-tier affiliate marketing programs give affiliates the ability to earn commissions on their direct sales as well as the sales of other affiliates they direct to the merchant. They are promoted as a way for affiliates to earn additional money without generating additional sales through their sites or adding additional merchant companies.

Who does this make sense for?

Affiliates who are willing and able to research the companies offering such programs. Unfortunately, this type of company uses the same business model as the old offline Multi-Level Marketing companies, which turned some participants off because they were stuck with inventory of a product they were not prepared to sell and the buyers didn’t care to buy.

That said, online programs are different. The sellers hold no inventory, and therefore assume no risk if the product doesn’t move. They get also get a percentage of the sales of other affiliates they introduce to the program. But you want to be sure that every affiliate you add to your program and feature on your valuable site real estate will earn its keep.

How should you check them out?

Buy some of the product, and honestly see if it is of the quality your site visitors would expect. Is it unique, better or cheaper? Understand why this company would need to pay you to recruit more affiliates. Are they very small, without the administrative and sales staff to do affiliate recruiting? Or does convincing an affiliate to sell their products take so much effort that it’s not cost effective?

Do they pay you for new affiliate sign-ups, or just the commission on the sales they make?

What extra administrative work will such a program bring you, if any? Can you refer them to other affiliates that aren’t in competition with you, or are your relationships primarily in your own space, potentially diluting the sales you’d make?