Are 2 tier Affiliate Programs MLM

[Lhogan]

My company is in the process of launching a new product with a 2 tier affiliate program. It was brought to our attention, that a 2 tier commission program is may be considered as an MLM program?

Does anyone know.

Thanks

[Linda Buquet]

Hi Linda, (nice name!)

Welcome to WebProWorld and thanks for sharing your question with us.

There are many legitimate 2 tier programs and it's a standard affiliate model. Typically 2 tier affiliate programs are not considered MLM unless they charge a fee to join or for a kit or marketing materials.

If fees are charged or it goes beyond 2 tiers then, yes the term MLM applies.

Anyone else have any thoughts on this topic?

[mlevenhagen]

Welcome to WPW Linda U.!

I may be the only one on the web that will say this, but has an MLM pay structure. That's the first thing that came to my mind when I first saw it. You're promising commissions to people who recruit other people. (not that I think it's a bad thing... I may have one or two 2nd tiers:)

I think everyones definition of an MLM is different. I challenge anyone to find two definitions out there that are the same... it'll depend on who you talk to or the organization.

But what is MLM really? To me MLM is the same thing as SEO or PPC. It's not the business, it's a way of marketing... but there are rules to follow as in other marketing methods...

So if you stick to way it is approached by most of the programs out there, you'll be fine. Just take a look at programs at CJ and Linkshare and emulate them. If major corporations are doing it, go for it.
...

[shilmy]

In my opinion, most MLM, if not all, requires you to consume/use the product or make the sell yourself before entitled commission from your downline sales. In 2 tiers affiliates, you still entitled to commission event if you don't buy or make the sale your self.

[101homebiz]

Let´s see what Wikipedia.org tell us about MLM:

http://en.wikipedia.org/wiki/Multi-level_marketing

In my opinion, MLM is nothing else as a Marketing&Sales strategy.

Alex

[allaffiliatepro]

Hmm...

I get a lot of customers asking the same question. Some of them are interested in MLM, others in affiliate programs, others in a merge of the two. I think it really depends on how you word the signup pages. MLM people tend to call members 'agents' rather than 'affiliates'. If you are offering an affiliate program and say it has a second tier, but don't mention MLM anywhere then I don't think people will see it as MLM, although there are always some that will.

Hope that makes sense.


Lyle

[KellyMcCausey]

Hmm.. never thought of 2 tier as MLM but I guess it could be seen that way.

I've always seen it as a way to get big dogs to tell little dogs (who want to be big dogs) about your product and thus build a big affiliate army for you to sell your product :)

And I've always thought of MLM as a way to get big dogs to tell little dogs (who want to be big dogs) to go tell other little dogs until there are no more dogs...

Oh ignore me, it's late and I'm not to be listened to at this hour ;)

[gmiller]

Kelly, the first description sounds like MLM to me, and the second sounds like a pyramid scheme. Of course, lots of things that claim to be MLMs are really pyramid schemes.