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