In this article we will discuss:
- What is Multi-level Marketing (MLM)? 🤔
- How to create MLM levels 🔨
- How rewards are distributed across levels 💸
- How to can establish parent-child relationships 🖇
- Our Enterprise-level MLM sales goals feature ✨
We've also included a short FAQ section at the end of this article.
Multi-level Marketing (MLM)
Multi-level affiliate marketing (MLM), otherwise known as Multi-tier affiliate marketing or network marketing, is a marketing strategy whereby affiliates are able to recruit other affiliates (sub-affiliates).
The typical incentive of MLM is that it grants each member of the network the opportunity to earn commissions from conversions driven by their recruited affiliates.
Multi-level marketing can be a powerful catalyst for any affiliate program. In this article we'll go into further detail about how this feature works and how you can enable it.
How to create MLM levels 🔨
How to enable MLM in your program
To kick off your MLM program, you'll first have to create a level.
You'll do this in your Program's Settings. Go to your 'Programs' tab > click on the specific program > Settings > Click on the MLM tab on the left side of the page.
Here, you will see an overview of existing levels within your program, as well as the option to create new ones.
If you have not yet created a level, you can click on the "Add level" button.
This will open a window where you can set the commission rate for the new level.
What happens after I create a level?
After creating your level, MLM is officially enabled for the program:
- Your affiliates will have access to an MLM tab on their affiliate dashboards
- All participating affiliates will have a unique recruitment link they can use to recruit other users beneath them.
- All participating affiliates can see their downline, as well as how much commission they've earned through their sub-affiliates.
How many Levels can I create?
You can create as many levels as you'd like - there's no limit.
How rewards are distributed across levels 💸
Learn about how a relative MLM program works
Tapfiliate's MLM feature is relative. This means that the affiliate driving the conversion will get the highest reward (Level 1/standard commission).
Affiliates who are a part of the corresponding affiliate's upline (and within the range of the levels you have set) will also be eligible for commission from a conversion.
To illustrate how rewards are distributed, we've prepared this example:
Let's say we have the following commission structure set up:
- Level 1/Standard: 10%
- Level 2: 2%
- Level 3: 1%
These are the affiliates, along with their relationships:
- Darlene (parent)
- Elliot (child of Darlene)
- Angela (child of Elliot, grandchild of Darlene.
- Tyrell (child of Angela, grandchild of Elliot, great-grandchild of Darlene)
If Angela drives a sale with a value of $100, the rewards would be distributed as follows:
- Angela: $10 (Level 1/standard) ✅
- Elliot: $2 (Level 2)
- Darlene: $1 (Level 3)
Now, if Tyrell drives a sale with a value of $100, the commissions would be distributed as follows:
- Tyrell: $10 (Level 1/standard) ✅
- Angela: $2 (Level 2)
- Elliot: $1 (Level 3)
- Darlene: $0 🙅
Because Level 4 does not exist, Darlene would fall outside of the set range of rewards; she's not eligible for commission.
Why a relative MLM program?
Tapfiliate's MLM feature is designed to give everybody who is a part of the affiliate network an equal opportunity to earn the highest level of commission.
It's not based on just how big the network can grow to be (we do not issue rewards based on recruitment) or how many people an affiliate can recruit, but rather on the performance of the network's individual members.
This means that an affiliate's position within the network has no influence whatsoever over how much they could earn - only effort is rewarded and the affiliate driving the conversion is always guaranteed the highest commission (Level 1/Standard).
How to establish parent-child relationships 🖇
The three ways to create parent/child relationships between affiliates
1. Affiliates can share their unique recruitment link - When new affiliates sign up using an affiliate's recruitment link, they will automatically become a child of the affiliate who shared the MLM invite link.
2. Set an affiliate’s parent through the Tapfiliate interface - On your Affiliates Overview > Click the affiliate who’s parent you would like to set. You can then set the parent affiliate in the MLM section located inside the right-side panel. This may also be done through the affiliate's full profile.
3. Set a parent through the REST API - It is also possible to set the parent affiliate through the API, using the Set parent endpoint.
MLM sales goals feature ✨
Take your MLM program to the next level by setting Sales Goals
The MLM sales goal is a feature that incentivizes parent affiliates to drive a certain conversion amount before they're eligible to claim commissions earned through their downline.
If the goal conversion amount set is not reached, the parent affiliate will not be eligible to receive commissions through affiliates in their downline.
Note: This feature is a available in our Enterprise plan.
FAQ about Tapfiliate's MLM feature
Can I limit the amount of users an affiliate can recruit?
Tapfiliate's MLM feature was designed with infinite expansion in mind.
This means that affiliates can recruit as many other sub-affiliates as they'd like, and the affilaite network can expand infinitely both horizontally and vertically.
Can I charge users when they join my program?
Tapfiliate does not support charging potential affiliates to join or participate any affiliate program.
Can I give an affiliate a commission when they recruit someone for my program?
Our MLM feature does not support rewarding affiliates for recruiting other affiliates beneath them. We only issue rewards based on actual conversions/purchases.