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    dgoin ‎(PAL Red Pro)
    08-07-2017
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  1. #1
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    Default Commission structure of a typical affiliate network, non gambling?

    Let's assume you have a (non-gambling) product for which you have an exclusive right to market online.
    So you go ahead and build up an affiliate network, with a lifetime revenue share.

    You are the guy at the top of the program, so you are going to make a commission for every sale. You are going to hire a couple of second-tier AMs, each one of them targeting a specific market (region).

    Second tier AMs would make a commission based on sales of all affiliates they bring in.

    Next tier would be the actual affiliates, and they can have subaffiliates too, but each affilate will only earn commission for his subaffiliates on the level under their own.

    Let's say the company who actually sells the product has a budget of marketing expenses of 25%. So that means you cannot pay out more than a total of 25% per sale.

    What kind of structure of percentages would be customary for a scheme like this?

    What about this:
    Tier 1 (you): 4%
    Tier 2 (regional AMs): 2%
    Tier 3 (affiliates): 18% plus 1% of their first level subs

  2. #2
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    I never realized AM's got a percentage of commissions but I guess that makes sense that they do. For some reason I was just thinking they earned a salary but earning commissions off their affiliates is definitely a motivator.

    As far as the above structure, personally I think 9x's more than your regional AM's is a little high. If I think of it like having a VP of sales and then sales people, if I were the VP of sales I would want more than 2%. I guess it also depends on how many VP's and affiliates you have. If each VP or (regional AM) has 9 salespeople they would earn the same as the sales people or affiliate. It would all depend on your business. How many affiliates can each AM handle? Your Regional AM should earn at least 1.5x's the affiliate you would think. Middle management is the key to success! They are the backbone of any good business.

  3. #3
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    Most affiliate AMs that I know in the igaming sector are paid on flat salary with bonuses. But this would be an interesting model and I think the breakdown that you gave makes sense economically. Not sure if anyone remembers, but there's a similar program called Tradal about ten years ago that was using the similar scheme to market Casino On Net.


 

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