MLM Home Business Affiliate Program

What is affiliate marketing?

Unlike traditional Network Marketing, Affiliate Marketing, such as Jvzoo review, generates its profits from the advertising revenue of third party companies, "affiliates". This concept is also known as "shared revenue".

Let's outline, in detail, how we use Affiliate Marketing. We will be dealing with three parties, the advertiser, the affiliate program and the marketer (YOU).

The advertiser has a product or service that they have to sell or promote. They obviously need a large number of people to be exposed to their advertisements, whether mlm home business affiliate program those ads are in the form of e-mail, banner ads or a simple URL. The traditional way of advertising on the Internet would be to buy advertising space on a high traffic website. Usually a company would have to purchase space from several websites to effectively market their product or service. This can cost thousands and thousands of dollars every month and is seen by people visiting those particular websites.

Fortunately, most companies today utilize the more modern approach to marketing, Affiliate Marketing. These companies partner themselves with mlm home business affiliate program companies and form an affiliate program.

Individual people sign up with the mlm home business affiliate program and promote ads for the advertiser. These people are known as the marketers. These peoples performance (ads shown by them or their website and clicks generated from those ads) are tracked and recorded in a database.

Some companies form their own affiliate program and work straight with the marketer.

The advertiser pays the mlm home business affiliate program a determined amount for each ad displayed by the entire affiliate program (all the marketers). The affiliate program, then in turn pays the marketer a percentage of that determined amount, based on his/her performance.

This is basic affiliate marketing. But when this concept is used in conjunction with a Network Marketing system, a very powerful hybrid of marketing is formed. Essentially, it is Network marketing, but without requiring its members to spend any money. All commissions are paid by the advertiser, not by the up line.

Let's look at an example. In this example, an mlm home business affiliate program (affiliate program) establishes itself to use an e-mail service as its vehicle of marketing. They offer users a free e-mail address and access to their servers. They also solicit the business of companies who have a product or service they wish to advertise (the advertiser). Their approach is that they will guarantee delivery of these advertisements to all of their users. These users are in fact, the marketers.

The marketers now build a down line according to the specifications of the affiliate program; by referring other people to sign up for this free e-mail service.

The advertiser likes this arrangement and agrees to pay a determined amount to the company for each advertisement read by its users (or members). Let's say the advertiser will pay 50 cents per ad read by a user. Note: the figures used are for illustration only and its not to be considered an average standard rate of pay for e-mail advertising.

The e-mail company (affiliate program) will use a network marketing matrix of 10 levels deep and unlimited width. The company will keep half of the agreed pay rate (25 cents), leaving the remaining 25 cents to be paid to the down line matrix. The commission or payout structure will be as follows:

The members will not actually be paid for the ads that they, themselves, read. They will be paid for the ads read by everyone in their down line through 10 levels.

Everyone on their first level will earn them 5 cents per e-mail that they read. Everyone on the members second and third level will earn them three cents per e-mail that they read, and levels 4 through 10 will earn them 2 cents per e-mail they read. Let's look at this again.

Level 1

Level 2

Level 3

Level 4

Level 5

Level 6

Level 7

Level 8

Level 9

Level 10

5 cents

3 cents

2 cents

All levels combined equal the 25 cents. Agreeably, this is a very tiny amount of money. But remember, Network Marketing is all about the power of numbers. Let's say you recruited 5 people into this affiliate program. All of them are called direct referrals and are on your first level. Now let's say they each read just 1 e-mail per month. 1 e-mail times 5 people times 5 cents equals $0.25 per month. That's right, a quarter per month. That's obviously ridiculous. But remember that these five people will also recruited people under them. All of those people will be on your second level.

Obviously, you have trained these people to do exactly what you have done so let's say they each recruit 5 people, just like you did. You're second level now has 25 people reading 1 e-mail each, every month. 1 e-mail times 25 people times 3 cents = $0.75, plus your earnings from your first level, give you $1 per month.

That's still ridiculously low, but through the power of duplication, each of those 25 people refers 5 people each giving you a third level of 125 people. Repeating the same results through all 10 levels will achieve the following results: Level Rate People Earnings

5 cents

3 cents

2 cents

125

625

3125

15625

78125

390625

1953125

9765625

$0.25

$0.75

$3.75

$12.50

$62.50

$312.50

$1,562.50

$7,812.50

$39,062.50

$195,312.50

Monthly Total $244,142.25

THAT is the POWER of Network Marketing. Some people will say that it's highly impractical for a company to pay you such a high amount of money for simply reading e-mail.

What most people fail to realize at this point is how one single e-mail is still only worth 25 cents. To explain this, let's follow the travels of just one single advertisement e-mail.

Obviously, the advertisement originates from the company who is advertising the product or service (the advertiser). This single ad is placed by the advertiser to the affiliate program for 50 cents. The affiliate program keeps half for their profit and reserves the other half to pay its marketers.

This single advertisement is then sent to someone (a marketer) in the marketing matrix. Remember, we are tracking just one particular e-mail read by a single individual. We obviously understand that an identical copy of this e-mail will be sent to thousands of people, but this example is only focusing on just one isolated e-mail that will arrive in someone's Individual e-mail box.

What happens now when this person opens and reads this e-mail advertisement Remember, the e-mail is valued at 25 cents, and at the time this person reads this e-mail, those 25 cents is divided and paid to the appropriate people.

Let's call this person that just read the e-mail, John. Does John receive any of these 25 cents No. Because no one is paid for the actual e-mail they, themselves, read. So who gets these 25 cents John's up line.

John is in someone's 1st level, and that someone just earned 5 cents.

John is in someone's 2nd level, and that someone just earned 3 cents.

John is in someone's 3rd level, and that someone just earned 3 cents.

John is also a someone's 4th, 5th, 6th, 7th, 8th, 9th and 10th level, and each of them just earned 2 cents.

The advertisement, originally valued at 50 cents, has reached its destination. Out of those 50 cents, the affiliate program has profited 25 cents and the remaining 25 cents has been paid to the marketers who have earned it.

At this point, everyone profits from this Network/Affiliate Marketing campaign. However, there are still some questions that most people ask regarding this concept.

How can a company afford to pay such a large amount to so many people?

Remember, these affiliate program companies are also making money. In the example used, our affiliate company keeps half of what the advertiser pays them. This means that for as much money that the affiliate program pays its marketers, it's making an equal amount itself.

What if the advertiser doesn't have the advertising budget to cover such a large advertising campaign?

By the time the affiliate program has such a large membership as to where this would occur it is assumed that they would have several, if not hundreds of different advertisers. Therefore, each advertiser could operate on whatever sized budget they prefer and the affiliate program would still have enough ads from all of them to distribute to its marketers.

Doesn't it take a long time to build a down line to the point where it's reasonably profitable?

Sometimes it can take a long time to build a down line, but when it's done right and under the guidance of a good, professional marketing team, it can be quicker than you might think.

It is important to remember that the Payout structure and matrix used in this illustration is not the only way affiliate programs can operate. Some use dollars instead of mere pennies. And there are other things that can be marketed through affiliate marketing. Advertisements are just one. And some affiliate programs uses a forced matrix.

What is a forced matrix?

The example used above used a matrix of 10 levels deep and unlimited width. This means you are only paid for the efforts of your down line through only 10 levels. But, you may build each level as wide as you which.

With a forced matrix, the width of the matrix is locked at a certain number of people. This doesn't however mean that a person has to stop recruiting after they reach that limit. Instead, these referrals are passed down through the down line until it finds the first available position and it then fills it. This is known as spillover.

Depending on the pay structure, a forced matrix can be even more powerful than a traditional matrix. The spillover will help new marketers by allowing the efforts of their up line to help them build their own down line. A forced matrix also helps persons down line by forcing it to fill evenly to the point of completion. Also by building evenly, your down line becomes stronger and doesn't have any gaps. This builds a more even and fair cash flow for everyone, and therefore builds loyalty and dedication, and reinforces commitment.

Although Network Marketing has been around for more than 50 years, it has only been truly realized by the masses for the past 10-15 years. It has been proven time and time again to be the most effective and profitable business model ever conceived.

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