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2nd tier commission in promotion of an affiliate program

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2nd tier commission in promotion of an affiliate program

Postby SeoPharmacy » Tue Oct 10, 2006 12:25 pm

Why is it important to have 2nd tier commission? Isn't it better to spend all the commission money on your direct affiliates?
Can you advise on the best strategy to promote affiliate program?

Best regards, Seopharmacy
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Postby Lynn Terry » Tue Oct 10, 2006 7:38 pm

The main purpose of a 2nd tier is to let your super affiliates do the recruiting for you. This brings in fresh new affiliates all the time, which helps you to grow your sales force.
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Postby CorpRebel » Tue Oct 10, 2006 10:43 pm

One thing to think about, though ...

If you were planning to use PayPal to pay your affiliates, you can ONLY have a 1-tier affiliate program using PayPal. But I believe most other payment processors/merchant accounts will allow 2 or more tiers.

Otherwise, what Lynn just mentioned is what 2-tier really works well for.


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Postby SeoPharmacy » Fri Oct 13, 2006 9:56 am

Thanks!
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Postby kiatlc » Mon Aug 20, 2007 8:42 am

CorpRebel wrote:One thing to think about, though ...

If you were planning to use PayPal to pay your affiliates, you can ONLY have a 1-tier affiliate program using PayPal. But I believe most other payment processors/merchant accounts will allow 2 or more tiers.

Otherwise, what Lynn just mentioned is what 2-tier really works well for.


Rick Wilson aka CorpRebel8)

Could anyone plz clarify that? Why I cannot pay my affiliate partner thru paypal for 2 tiers?
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Postby CorpRebel » Mon Aug 20, 2007 12:35 pm

kiatlc wrote:
CorpRebel wrote:One thing to think about, though ...

If you were planning to use PayPal to pay your affiliates, you can ONLY have a 1-tier affiliate program using PayPal. But I believe most other payment processors/merchant accounts will allow 2 or more tiers.

Otherwise, what Lynn just mentioned is what 2-tier really works well for.


Rick Wilson aka CorpRebel8)

Could anyone plz clarify that? Why I cannot pay my affiliate partner thru paypal for 2 tiers?


Hi!

It's PayPal's policy. They no longer allow 2 or more tier affiliate payments. Look closely at PayPal's TOS (terms of service). I think they believe it's too close to a MLM type of program for their liking.

They haven't allowed that for quite awhile now. :wink:

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Postby kiatlc » Mon Aug 20, 2007 3:15 pm

I am considering to buy Post Affiliate Pro as my affiliate software, if Paypal does not allow second tier payment, what does it mean practically?

Does it mean that I have to pay my affiliate partner myself according to Post Affiliate Pro's generated report?

I thought I have come thru a piece of info that Paypal can import "Mass payment list". So when Paypal does not allow it means that this kind of import will not be processed by Paypal?
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Postby CorpRebel » Mon Aug 20, 2007 3:43 pm

kiatlc wrote:I am considering to buy Post Affiliate Pro as my affiliate software, if Paypal does not allow second tier payment, what does it mean practically?

Does it mean that I have to pay my affiliate partner myself according to Post Affiliate Pro's generated report?

I thought I have come thru a piece of info that Paypal can import "Mass payment list". So when Paypal does not allow it means that this kind of import will not be processed by Paypal?


You would need to pay your affiliates yourself using other payment processors or write the checks out and mail them to your affiliates yourself .

The bottom line is that if PayPal should find out that you are promoting a 2-tier program, yours or anyone else's that are using PayPal, then you run the risk of them shutting your account totally down. It's happened to others. They used to allow the "mass payment" to multi-tiered programs but no longer.

My suggestion is that you call PayPal and explain what you're trying to do. They will give you the final answer.


God Luck!

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Postby kiatlc » Mon Aug 20, 2007 8:55 pm

Let's say I use Paypal to receive payments. Then Post Affiliate Pro register all the transactions where it comes from which affiliate.

I set a minimum payout amount, let's say for $20, so any commission under 20 will keep with me first until the amount exceeds that.

Every 2 weeks, I check from Post Affiliate Pro who qualify to receive the commission then I manually transfer fund to them one by one......

If so my work is more, but I am willing to, is it practical from the standpoint to avoid the Paypals' Evil?
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Postby CorpRebel » Mon Aug 20, 2007 9:16 pm

kiatlc wrote:Let's say I use Paypal to receive payments. Then Post Affiliate Pro register all the transactions where it comes from which affiliate.

I set a minimum payout amount, let's say for $20, so any commission under 20 will keep with me first until the amount exceeds that.

Every 2 weeks, I check from Post Affiliate Pro who qualify to receive the commission then I manually transfer fund to them one by one......

If so my work is more, but I am willing to, is it practical from the standpoint to avoid the Paypals' Evil?


PayPal does NOT allow any program which is 2-tiers or more. They do NOT allow people to pay for a sign up to your 2-tier program. They do NOT allow you to pay anyone (your affiliates) that promote your 2-tier program. You CANNOT use PayPal for your 2-tier program according to their rules.

Those are PayPal's rules and regulations. What you do with them is up to you. But you could very easily get your PayPal account shut down if they caught you doing it.


Rick Wilson aka CorpRebel 8)

P.S. Part of Paypal's Rules From Their Website:

Multi-Level Marketing

Multi-level marketing plans, also known as "network" or "matrix" marketing, include any business in which a person receives proceeds from his or her own sales of goods or services, of recruited members, or any combination thereof. Similarly, PayPal prohibits as a Multi-Level Marketing plan any business in which payouts occur at two or more levels (both by the individual who actually sold the product as well as by the person(s) "upline" that recruited the selling individual). PayPal prohibits Multi-level Marketing plans whether or not they are legal under the laws of one or more states.

<snip> And then there's ...

In determining whether a website or account violates our Multi-level Marketing, Pyramid and Matrix Programs Policy, PayPal will consider some or all of the following factors:

* Offering commissions to recruit new members
* Requiring new distributors to purchase costly inventory or "start-up kits"
* Members' profits are derived from recruiting new members or from the sales of newly-recruited members ("downline"), rather than their own sales
* Payouts are funded through money paid into the system by new or existing members
* Money paid into the system is significantly greater than money paid out
* Unrealistic or unsupported promises regarding profits/return on investment
* Percentage of the company’s goods sold by non-distributor
* Businesses warned against by the Better Business Bureau, state Attorney General, Federal Trade Commission (FTC), or any state or federal agency
* Flow of money derived from new members predominantly moves "upline"
* Preservation of the business rests on the exponential growth of new members or customers
* Speculative real estate or non-development property
Last edited by CorpRebel on Mon Aug 20, 2007 9:27 pm, edited 1 time in total.
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Postby kiatlc » Mon Aug 20, 2007 9:26 pm

Any workaround for that? Bcoz i am new to this
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Postby CorpRebel » Mon Aug 20, 2007 9:33 pm

kiatlc wrote:Any workaround for that? Bcoz i am new to this


Sorry ... Not that I am aware of. I know of people that had their PayPal accounts closed because of this. Maybe someone else has other ideas but PayPal doesn't want those type of programs.

You would need to find another payment processor to accept payments and then pay the affiliates individually.


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Postby kiatlc » Mon Aug 20, 2007 9:40 pm

Thx for yr advice. If anyone else know the solution plz reply it here.
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