Multi-level marketing (MLM), as known as network marketing is a popular and promising method to grow a business with a great pace using the abundant affiliates. MLM allows each affiliate to invite and recruit others into the network, thus, your business could reach more potential customers through diverse channels and promotion activities.
The basis of Multi-level marketing is demonstrated through an image of a pyramid, where each affiliate invites another to be his/her downline level in the affiliate network system. The more participants get invited, the more products or services could approach their targeted market.
The earnings of ambassadors in the pyramid network are derived from two mains sources. The first (and possibly the main) income is from the commission paid for completed promotion activities that they brought. It can be in form of referral orders, shares or other types of engagement made by customers. The second one comes from the network commission, which bases on purchases brought by their downline distributors.
By setting up a commission network, the people in MLM would not only try to sell products/service directly to end-user consumers but also are incentivized to invite more affiliates to be their downline distributors.
With Affiliate marketing by Secomapp, each affiliate can invite or recruit unlimited distributors and their network commission will be calculated on either program commission (commission of affiliate who directly brought the order) or total sale with the percentage set by merchant.
John signed up as an affiliate, then he invited Victor. Victor invited Michelle and Michelle invited David.
If David brings a referral order with the total amount of $1000 and the commission percentage set to the affiliate program is 10%, then David (Original affiliate) will get the commission of 10% x $1000 = $100. Other affiliates who are in higher levels will receive network commission as below:
Commission level 1 (Michelle who invites David) gets 5%,
Commission level 2 (Victor who invites Michelle) gets 4%,
Commission level 3 (John who invites Victor) gets 2%,
a. If you set network commission to be calculated on Program commission:
Their commissions will be calculated as below:
b. If you set network commission to be calculated on Total sales:
Their commissions will be calculated as below:
To activate Multi-level marketing in Affiliate by Secomapp, go to Grow affiliate tools > Multi-level marketing > switch on Active MLM. We recommend you activate Auto active affiliate feature so any invited affiliate can start their work right after requesting to join without waiting for your review (To activate that feature, visit Settings and click on Auto active affiliate).
Network commission can be set in percentage or flat rate. If it is in percentage, the amount will be based on the commission of the original affiliate. Merchant can add up to 10 levels. In case the relationship level is higher than the maximum set level, the affiliate with the most remoted relationship with the original one will not get network commission.
Advanced: You can select program(s) in which MLM is activated. Only affiliates in the selected programs are able to recruit other members and get the network commissions.
Each active affiliate has a network link to invite others (after the MLM feature is activated)
If other participants click this link and register as a new affiliate, they will be considered as the downline distributor with one level lower than the one who owns the link.
The performance of the down line affiliate will be updated on merchant’s page and upline affiliate’s page.
Merchant can manually connect one affiliate to another by on merchant account. Go to Affiliates & Coupons > Affiliates > click on an affiliate profile > Network tab > Set upline affiliate.
Enter the affiliate name/email and click Set
One affiliate can have only one upline affiliate. Also, the merchant cannot set an existing downline affiliate to be an upline affiliate.
In case a referral order is made thanks to an ambassador in the MLM network, the order commission for that original affiliate and network commission for the upline affiliate will be displayed in Referral section.
There would be a small note with “+” below the original affiliate commission, which is network commission amount, merchant can see its details by clicking the eye icon in Network column, commissions for related affiliates will be displayed including their level.
In Payments, figures are listed by affiliates' total commissions, so you can click See referrals to observe their detail incomes including the direct order commission (Referral) and network commission (Network) in order to evaluate their performance.
Payments are made manually so after you send the payments to your affiliates, click Mark as paid to let the affiliates know.
Each affiliate can also keep track of their commission amount. They can see their downline distributor's performance and their network commission in the Network tab on Affiliate page to see whether their team is bringing them any interest.
You can go ahead try this feature out and we hope to hear what you think.