Multi-level marketing
1. Multi-level marketing definition
Multi-level marketing (MLM), as 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.
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.
With UpPromote: Affiliate marketing, 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 with the percentage set by the merchant.
For example
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:
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b. If you set network commission to be calculated on Total sales:
Their commissions will be calculated as below:
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To activate the Multi-level marketing feature in UpPromote, go to Growth > 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.
Note: When a new program is created, its MLM status will be off in default. In case you want to turn on MLM for that program, please go to Multi-level settings and set up your preferred rules.
Next, select the program that you want to put the invited affiliates in.
Lastly, you can totally add a recruitment bonus for your affiliates as an encouragement. The bonus will be added as a new referral when the newly recruited affiliate is approved.
If one affiliate successfully invites another through his network link (shown on the Affiliate's Dashboard), that affiliate will get a recruitment bonus.
We recommend you activate the 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, go to Settings > Notifications & Others > switch on Auto active affiliate).
Network commission can be set in percentage or a flat rate. If it is in percentage, the amount will be based on the commission of the original affiliate, or the total sale value. Merchants can add up to 20 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 a network commission.
To make sure how the MLM works in a real scenario, you can click See in live action:
Once you're done setting up, don't forget to click Save changes.
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 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 downline affiliates will be updated on the merchant’s backend and the upline affiliate’s backend.
Merchant can manually connect one affiliate to another by on merchant account. Go to Management > Affiliates > click on an affiliate name > Network tab > Set upline affiliate.
Enter the upline 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.
With this function, the merchants could have a visual look at the affiliates' relationship in the MLM network. Simply click See the tree.
A list of all upline affiliates will show up. Click the Plus icon next to any affiliate (if any) to see their downlines.
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) 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 his/her commission amount. They can see their downline distributor's performance and their network commission in the Network tab on the Affiliate page to see whether their team is bringing them any interest.
You can go ahead and try this feature out and we hope to hear what you think.
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