2 Major Examples Of How Assuming Can Cost You A Boatload Of 2 Tier Commission
JV Broker 101: 2 Major Examples Of How Assuming Can Cost You A Boatload Of 2 Tier Commission.
By Mike Merz Sr
Regardless of how well known and respected the platform, never take for granted that you’re being paid what is owed you when introducing affiliates into a Vendor’s affiliate program via their 2 Tier referral option.
Whether the vendor you’re working with is using stand alone affiliate program software, or their shopping cart’s AP module, the following chain of events has remained virtually unchanged over the years (from my experience) …
1) The prospective affiliate arrives at the affiliate registration page via the JV Broker’s 2 Tier referral link.
2) The affiliate prospect creates an affiliate account, is tagged as the 2 Tier referrer’s referral in the system, and the latter receives an agreed upon 2 Tier commission (the industry standard is 10% of the total sale (100%)) for sales made by that affiliate … minus negative adjustments (refunds, chargebacks, etc.).
3) The JV Broker/2 Tier referrer receives commission on sales of all approved products for as long as the affiliate remains in the system +/or the 2 Tier referrer’s affiliate account remains active.
For those of you with experience using a 2 Tier referral option to earn 2 Tier commission for your affiliate recruitment efforts, that’s pretty much the way it’s supposed to work … correct?
What if I were to tell you that of those 3 no brainer, common knowledge segments of the aforementioned scenario … only the first one is likely factual when using many of today’s popular platforms?
That’s a fact, Jack … or Jill, which is not always made known in the JV Broker/2 Tier referrer agreements … or as part of the affiliate agreement, seeing as you’d be hard pressed to find an example of the former.
Truth is, some popular platforms that advertise a certain % 2 Tier referral commission are actually pulling that % from the Vendor’s take … as opposed to 100% of the pie (sale).
If the affiliate is being paid a 50% commission, your (the JV Broker’s) 10% is coming from the remaining 50% … which is actually only 5% of the total (100%) sale. If the affiliate commission is 75%, your supposed 10% commission is actually 2.5%, and so on.
IMHO, and what I’d think most of my peers would consider common sense … the affiliate and JV Broker should be paid first, out of the original 100%, leaving the remainder as the vendor’s cut … minus overhead. Unfortunately, for reasons unknown to me … and without reasonable explanation from the representatives of these platforms, the pieces of the total pie are not being shared in what most would consider a logical manner.
You’d also likely assume that you will no doubt earn a commission for sales of all products being offered within the affiliate program that your referred affiliate generates. After all, if the affiliate you brought into the system and the Vendor are making money, it goes without saying that you (the 2 Tier referrer) are due your fair share … as well, no?
Well … I hate to break this to you, but not necessarily. ;)
There are those that would like you to believe that even though the referred affiliate, Vendor and the owner of the platform (in some cases) are making money on the entire sales funnel … you’re only entitled to commission generated by your referred affiliate's FE (front end) sales, which in most cases are the lowest ticket and highest affiliate commission (hence lowest 2 Tier commission) in the funnel, and that you’re not owed a dime on sales made by your affiliate referral through what it usually a multiple product BE (back end). Therefore … you wind up with a fraction of the 2 Tier commission you are actually due, IMHO. And even if a choice is available, it’s usually left up to the vendor to decide without necessitating the JV Broker’s input … rather than being part of a contractual agreement between the 2.
Conclusion …. don’t assume (there’s that word, again) that you’re being paid what you think you should be earning as a JV Broker/2 Tier referrer, and I would go as far as to say do not trust that you’re being given all the necessary information regarding the 2 Tier referral option. Before you start referring affiliates into the system, it doesn’t hurt to contact the platform’s support desk and ask them what their exact policies are in regards to how the 2 Tier referrer commission is calculated and whether you’re paid on just FE sales or on the entire sale funnel. Even if the support team has no answers for you, you can work with the Vendor directly to arrive at mutually agreed upon terms.
WARNING: Not following up on any of the above could wind up costing you HUNDREDS and even THOUSANDS of Dollars in 2 Tier referral commissions … DON’T ASSUME, ASK QUESTIONS!
Cheers,
Mike Sr
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Mike Merz Sr is a well known JV Broker and JV Marketing Consultant, owner/admin of www.JVNotifyPro.com, www.JVNewsWatch.com and Internet Marketing For Newbies LLC.
This article may be republished as long as both it, and this resource box, remains intact.
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