How to Set Up Multi-Tier Commissions

Introduction to Multi-Tier Commissions

Multi-tier commissions, often associated with multi-level marketing, allow you to reward not just the affiliate who makes a sale but also their network of sub-affiliates. This system encourages affiliates to recruit others, expanding their reach and creating a layered network of income opportunities. Stack supports up to 7 tiers, enabling flexible and customizable commission structures for your campaigns.

How Multi-Tier Commissions Work

In a multi-tier commission structure, affiliates earn commissions not only on their direct sales but also on the sales generated by their sub-affiliates across multiple levels (tiers). Each tier can have a different commission rate, providing opportunities to incentivize both top-level and sub-level affiliates.

Examples

Example 1

Affiliate Chain Setup:

Imagine your commission structure is set up as follows:

1st Tier: 20%
2nd Tier: 10%
3rd Tier: 5%
4th Tier: 3%
5th Tier: 2%

Here’s how the commission distribution works:

If Jan refers a $100 sale, then:

Jan (1st tier affiliate) earns $20.
Toby (Jan’s recruiter, 2nd tier) earns $10.
Ryan (Toby’s recruiter, 3rd tier) earns $5.
Jim (Ryan’s recruiter, 4th tier) earns $3.
Michael (Jim’s recruiter, 5th tier) earns $2.

Total Paid to Affiliates: $40 ($20 + $10 + $5 + $3 + $2)

This tiered system ensures that as the network grows, the upper-level affiliates continue to benefit from the performance of their sub-affiliates.

Example 2

Affiliate Chain Setup:

Using the same setup, if Stanley refers a $100 sale, then:

Stanley (1st tier affiliate) earns $20.
Dwight (Stanley’s recruiter, 2nd tier) earns $10.
Michael (Dwight’s recruiter, 3rd tier) earns $5.

Total Paid to Affiliates: $30 ($20 + $10 + $5)

Steps to Set Up Multi-Tier Commissions

Create a New Affiliate Campaign:
- Begin by creating a new affiliate campaign. Learn more here.
Enable Multi-Tier Commissions:
- Go to the Advanced Commissions settings.
- Enable the Multi-Tier Commissions option.
- Choose the number of tiers you want to activate (up to 7).
Configure Tier-Specific Commissions:
- Set the commission rates for each tier, either as default rates or specific to certain products. This helps motivate affiliates at different levels to continue promoting your products.
Review and Confirm Additional Settings:
- Double-check all settings, including any optional features such as auto-enrollment of new customers as sub-affiliates, to ensure smooth operation.
Publish Your Campaign:
- Once your multi-tier structure is set up and reviewed, publish the campaign to start tracking and rewarding your affiliates automatically.

Conclusion

A multi-tier commission structure allows you to build a strong, engaged network of affiliates and sub-affiliates, incentivizing both immediate sales and long-term growth. By setting up multiple tiers, you not only reward top sellers but also encourage them to grow their networks, helping boost your overall sales potential.