Affiliate and Referral is one of the most popular add-ons for CS-Cart. We receive quite a number of questions about its work and setup. In this article we clarify how the multi-tier system works and how commissions are split up.
The multi-tier affiliate program is a great way of encouraging your existing affiliates to recruit new affiliates and to reward them for their effort. Our add-on supports multi-tier/multi-level affiliate tracking and the number of tiers is unlimited. However, we don’t recommend a great number of them. The reason is simplicity for you and clarity for your affiliates.
Let’s see the schema with 4 affiliate tiers. Anastasia (it’s me) is the 1st tier affiliate, Ted Baker – the 2nd tier affiliate, Kate Green and Bob Brown are the 3rd and the 4th tier affiliates respectively. The add-on displays a branching diagram of affiliate referrals.
All the four affiliates are signed up for the same plan (Plan for bloggers) where the payout for a sale is 1%. It means that the affiliate gets 1% of the amount spent by the referred customer.
The plan has the following commission percentage for multi-tier affiliates.
For example, a customer comes to the store via Bob Brown (the 4th-tier affiliate) and buys a rucksack for $100. The payouts are the following:
- $1 comes to Bob Brown as he referred a customer, who made a purchase of $100 and Payout sales is set to 1% ($1 is 1% out of $100).
- $0.10 comes to Kate Green as she is the 1st level affiliate for Bob Brown ($0.10 is 10% out of $1).
- $0.07 comes to Ted Baker as he is the 2nd level affiliate for Bob Brown ($0.07 is 7% out of $1).
- $0.05 comes to me (Anastasia) as I’m the 3rd level affiliate for Bob Brown ($0.05 is 5% out of $1).
Please note that a single tick mark can change your payouts greatly. For example, if we had enabled the setting “Multi tier commission calculation based on product price” for the affiliate plan, the payouts would have been greater.
- $1 would come to Bob Brown as he referred a customer, who made a purchase.
- $10 would come to Kate Green as she is the 1st level affiliate for Bob Brown ($10 is 10% out of $100).
- $7 would come to Ted Baker as he is the 2nd level affiliate for Bob Brown.
- $5 would come to me (Anastasia) as I’m the 3rd level affiliate for Bob Brown.
This seems quite unfair towards Bob Brown. He referred the customer, but his commission is the least. Besides, the total commission payout in this case is $23. It’s too much for the order of $100. So be careful with this setting.
To sum it up, here are some tips on the multi-tier affiliate program.
- Make the terms of the affiliate program transparent and clear to you and your affiliates (a separate page with the program terms on your site will be useful, as you can always refer to it if necessary).
- Carefully consider what commission will have the best outcome for your business.
- Study the add-on functionality thoroughly (our user guide and video tutorials will be of help to you).
- Do not create the excessive number of affiliate tiers.
- Test the program before launching it.
We hope the provided examples make it clear how the multi-tier system works. If you still have questions, you can always contact us at email@example.com