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 main 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/services directly to end-user consumers but also are incentivized to invite more affiliates to be their downline distributors.
## 2. **How does MLM work?**
With [**UpPromote: Affiliate marketing**](https://apps.shopify.com/affliate-by-secomapp), each affiliate can invite or recruit unlimited distributors and their network commission will be calculated on either **program commission** (commission of the affiliate who directly brought the order) or **total sale of the order** with the percentage set by the merchant.
**For example:**
John signed up as an affiliate, and then he invited Michelle. Michelle invited Victor, and Victor invited David.
If David brings a referral order with the total amount of $100 and the commission percentage set to the affiliate program is 5%, then David (Original affiliate) will get the commission of 5% x $100 = $5.00. Other affiliates who are at higher levels will receive network commission as below:
* Commission level 1 (Victor who invites David) gets 5%.
* Commission level 2 (Michelle who invites Victor) gets 4%.
* Commission level 3 (John who invites Michelle) gets 2%.
*a. If you set network commission to be calculated on **Program commission:***
The upline's commissions will be calculated based on the commission amount that **David earned**.
*b. If you set network commission to be calculated on **Total sales:***
The upline's commissions will be calculated based on the total sales of the referral.
Each option has its own benefit.
1. With the Program commission option, the merchant can optimize the commission amount that needs to be sent out to affiliates.
2. With the Total sales option, the commission that needs to be paid will be higher. On the other hand, the upline will be encouraged to recruit more people to their team because they know they will earn so much more. Obviously, with more affiliates, the merchant will get more sales.
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***Note:*** If the upline MLM's program is deactivated, they cannot earn the network commission for their downline affiliates.
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## **3. Setting up MLM:**
To activate the **Multi-level marketing**, go to **Outreach > Affiliate recruitment >** **Multi-level marketing** > select the program and **Activate MLM***.* You can turn on/off and configure the MLM rule for **each program** separately.
Next, select the program that you want to put the invited affiliates in **Program for invited affiliates to join.**
Lastly, you can add a recruitment bonus for your affiliates as an encouragement with the **Recruitment Bonus** option. The bonus will be added as a new referral when the newly recruited affiliate is approved.
**Note**: When a new program is created, its MLM status will be off by default. In case you want to turn on MLM for that program, please go to Multi-level settings and set up your preferred rules.
Once the MLM feature is turned on in a program, the affiliates in the program will have the **network link** available in the account.
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When a new program is created, its MLM status will be off by default. In case you want to turn on MLM for that program, please go to Multi-level settings and set up your preferred rules.
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If one affiliate successfully invites another through his network link (shown on the Affiliate's Dashboard), that affiliate will get a recruitment bonus which is recorded as a referral in the **Affiliate referrals** page.
We recommend you activate **the** [**Auto active affiliate**](https://docs.uppromote.com/settings/general-settings/auto-activate-affiliates) feature so any invited affiliate can start their work right after requesting to join without waiting for your review.
## **4. How do affiliates recommend others**?
Each active affiliate has a **network link** to invite others (after the **MLM** feature is activated), which can be found right on their affiliate account's dashboard:
If other participants click this link and register as new affiliates, they will be considered as the downline distributor with one level lower than the one who owns the link.
The performance of the downline affiliates will be updated on the merchant’s backend and the upline affiliate’s backend.
## 5. Manually set upline affiliate to an existing affiliate
Merchants can manually connect one affiliate to another in the merchant account. Go to **Affiliates** > cick on an affiliate name > **Network** tab > **Set upline affiliate**.
Enter the upline affiliate name/email and click **Set**. Kindly note that one affiliate can have only one upline affiliate.
## 6. See MLM tree
You can have a visual look at the affiliates' relationship in the MLM network by clicking **See MLM tree.**
In the **See MLM tree** page, you will see the **Affiliate tree** section where you can view an affiliate's uplines and downlines on a visual board.
1. Search for and select an affiliate, then click **View affiliate tree**.
2. The visual board then opens to show you the uplines and downlines (if any) of the selected affiliate.
* If the selected affiliate has multiple uplines, all upline levels will be fully displayed.
* If the selected affiliate has multiple downline levels, only level 1's downlines are shown by default while the remaining will be hidden in the **Plus** button. You can click on it to open the next levels one by one.
Besides, on the See MLM tree page, you will see the Network list, which shows all upline affiliates with their tree. Any affiliate that has downline(s) will get a **Plus** icon, so you can click on it to see them. Here's an example:
Additionally, you can click **Export all** to view and manage your entire MLM network in an exported Excel file for easier management.
The affiliate's MLM tree via the visual board can also be found by clicking on the icon in the **Action** column.
## **7. How the MLM commissions are displayed.**
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 the **Referral** section.
There would be a small note with “+” below the original affiliate commission, which is the network commission amount, the merchant can see its details by clicking the eye icon in the **Network** column, and commissions for related affiliates will be displayed including their level.
In **Payments**, figures are listed by affiliates' total commissions, so you can click **Review referrals** to observe their detailed incomes including the direct order commission (Referral) and network commission (Network) 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 his/her commission amount. They can see their downline distributor's performance and their network commission in the **Network** tab on the [Affiliate page](https://secomapp.zendesk.com/hc/en-us/articles/360024581612-Affiliate-Page) to see whether their team is bringing them any interest.
**Multi-level marketing** (MLM), known as **network marketing** is a popular and promising method to grow a business at a great pace using 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.
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