Before You Choose That Affiliate Program - Special Qualifications You Should Look For In Any Affiliate Program!

This may be a pretty tall order to reach but considering that the great majority of start-up online businesses fail within their first three years, you must take this seriously.  You don’t want your income stream to suddenly dry up!  It’s no picnic to discover that after you’ve spent time, effort and money to build a solid organization the company closes down because one of those essential elements was missing.

There is the prevalent myth that the best time to join an affiliate company with a network structure is at start-up—the so called ‘ground floor opportunity’—, but if the truth be told, the ground often caves in leaving many people very unhappy.  This does not mean that you should wait for five years to see if a company would do well, because logically, this would mean that no company will ever get started.  The point here is that you should assess your risk and know that the chance of losing your money is higher with a new company than with a company having a proven track record.

A sad reality of online businesses is that there are many scam artists that come along just for the quick cash just before they close shop and disappear.  This would require that you do your due diligence, such as checking consumer alert websites as FTC.gov and WorldWideScam.com among others.  These scam artists will normally emphasize the compensation plan over the actual product—if there really is a product—and apply high pressure sales tactics to persuade you to join the “ground-floor opportunity”.  These criminals prey on human greed and have little sympathy for the naïve. 

2.  High quality (unique if possible), reasonably priced products or services that should be, ideally, consumable so users will have to buy over and over again.

Also remember that you want to be paid continually so you need a product or service that is a consumable so the customer has to keep refilling his supply.  Nutritional and telecommunication companies fit this requirement very well.

Apart from being consumable, another important factor is how ‘needed’ this product or service is.  The negative side of pushing nutritional products is that most people are only concerned about their health after it is already failing!  (You’ll do well recruiting at the local hospital).  If you are marketing a service such as web hosting, medical coverage or legal services you are more likely to have less attrition in your downline.

The “acid test” question to apply to the price of the product or service is, “Would I purchase at this price if there wasn’t a compensation plan attached to it?”  If your answer is “No,” then you are looking at a potential pyramid scheme where a product is just attached to the compensation plan to make the opportunity appear legitimate.  In these cases you will always find that the compensation plan becomes the selling point and the product or service rarely mentioned

3.    A Compensation Plan that is fair to all affiliates with leadership bonuses for those who build large and productive teams.

We have already mentioned that a successful affiliate program will have a “distributor first” philosophy.  In no other place should this be exhibited more than in the compensation plan.  It takes only some simple arithmetic to see how many sales or affiliates you need in your downline in order to be in profit.  Most people don’t take the time to do the math and sometimes are “deceived” by the fancy potential income charts that are put out by the company.

The point here is that you need to read between the lines and the fine print to be sure what you are paid for your effort.  Most people will skim this section because it may read like a tax code and who likes to do their taxes?  That’s why we hire accountants.

Compensation plans fall into basically four types:

(a)      The Break Away Plan.  This is the oldest and most traditional compensation plan carried over from MLM companies.  It allows affiliates to build and be paid on an unlimited number of frontline affiliates. When the frontline affiliates reach a certain predetermined volume they can “break away” from their upline and form their own organization.  In this break away plan the leaders are paid on all their frontline and also certain levels down in their break away groups.  In this model if you don’t work you don’t eat.  You have to recruit in order to be compensated.

(b)     The Unilevel Plan.  Here you are only paid on a certain number of levels determined by the company.  In this case there are no ‘break away’ groups.  The larger your frontline the larger will be your total group size.  The lower levels would therefore be much larger than the upper ones.  Again if you don’t recruit you don’t get a check.

(c)      The Matrix Plan.  In this plan you are limited to the number of recruits you could have on your frontline.  So in a 3 X 5 matrix you’ll have 3 on your front line then 9 on the second level, then 27 on the next and so on.  Compared to the two other plans we’ve looked at the matrix plan limits your success to a certain level.  What’s so appealing about this plan though is that affiliates are told they only need to get 3 and are even promised “spill-over” from a “heavy hitter” in their upline.  The results are that everyone joins looking for spill-over and never makes any personal effort.  Results? Certain failure.  A matrix, though limited, can work but the affiliates must depend on their personal efforts and allow the spill-over (if any) to be just an added bonus.  

(d)      The Binary Plan.  This plan is a special case of the matrix where you can only have two on your frontline, hence ‘binary’.  The only caveat here is that many such plans require you to balance both sides of your organization before you can get paid.  This is really a trick so that the company can keep your money as long as possible and sometimes forever.  Some dishonest companies will start off by opening only one side of the binary—called a ‘powerleg’—as there is no possibility of you getting paid until the other side is opened.  By the time the other side is opened many people may have left the company leaving their commission checks behind as well.  You are forever left, not only with recruiting, but trying to balance the sides of your team.  Beware of such plans!

There are variations of these plans that have come along with more affiliate programs such as the straight line plan where you are paid on every one that comes in after you. 

Affiliate Companies that follow these plans don’t seem to survive very long since most people just join and stand by waiting on their checks.  There is no real incentive to work the plan.

Warning:  You should always be particularly suspicious of compensation plans that pay out over 60%.  This normally means that the product is overpriced, qualification quotas or volumes are almost unreachable or the breakaway structure can rob you of your investment and hard work.  If the company uses the breakaway plan you may find your downline disappearing just as you are about to hit the big numbers.  If a company intends to be deceptive it will be in the compensation plan; so study it well!

4.  Training and solid upline support for your team.

Many affiliate programs provide training and promotional materials for their affiliates but it is often difficult to strike a balance between product promotion and affiliate training.  And affiliate training normally takes the backseat.  You should be wary of companies that charge exorbitant prices for their promotional materials.  You are investing your advertising dollars so the company should not seek to make a profit from you here—although many do.

You should seek to align yourself with an experienced leader and learn as much as possible from his or her recruiting methods.  Be sure to investigate your upline because that can be the one factor that determines success or failure for you.  Study the company literature to see who the ‘big hitters’ are and join their group – if this possible.  It is said that misery loves company; so does success.

5.  A wide and even global market if possible.

Apart from the sheer geography of the company’s market reach, is the potential customer base as well.  For example, many American nutritional companies are aiming for the ‘baby boomers’ who are now in their midlife years and make up a good percentage of the buying public—in means and numbers.  This demographic of customers want to look younger and are very health conscious.  Any affiliate product that caters to their needs will most likely have a ready market.

Choosing a company that has a product or service for which there is no ready market will make it very difficult on the affiliate.  And in this industry one needs a lot of encouragement.  

To really understand how all these works you may want to check out some affiliate programs.  Go through the conditions laid out, check the products pay careful attention to the compensation plan and of course how the website.  You may want to check out these two programs  SFI Marketing Group and  GNE. You'll definitely learn much from them.

Chadrack Irobogo

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Chardrack Irobogo is a writer with a passion for helping people achieve their personal and professional dreams through the provision of inspiring and empowering content.

The over-riding mission of his website http://www.themarketingmouse.com is to reveal proven and tested tactics and strategies to help you generate real and consistent revenue from your online business even when you are on a shoestring budget.

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