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There are various types of affiliate programs. As mentioned in the introduction about affiliate programs, hundreds have been developed to accommodate the different business models that have formed on the Internet over time. Below is a list of the basic types of affiliate programs and how they are intended to be used. Realize that just because it works well for one website doesn't mean it will work for another.

Multilevel Marketing (MLM)

You're likely already familiar with this form of affiliate program. Many folks argue that MLM is not an affiliate program. Certainly the similarities are there and truly, most affiliate programs concepts spawned from the MLM. The concept is the same as other programs, accept the focus is generally different.

In a nut shell, MLM is multi-tiered, meaning three or more tiers or levels. Generally the focus for MLM is building the down line and "selling" the opportunity. The product or service of the MLM is more of a means to allow the opportunity to exist rather than it's main focus. Therefore you have more loyalty from the affiliates to just work with the one program and to work with their down line

Two-Tier

Two-tier programs have two levels of pay out. Similar to the above MLM example except there is only two levels (you and any sub affiliates you sign up). It's not really called a down line, because with only one level, the matrix goes wide.

Also, generally the focus is no longer on the down line or opportunity, but more on the sale of the product. For instance, let's say that Sue signs up for the program who's product is cheese cakes. Sue is considered the first level (or first tier). Any sales that she makes, she earns a set commission of say 30%.

John comes along and decides he'd like the opportunity to earn money selling cheese cakes, so he signs up under Sue. He is considered Sue's sub affiliate (or second tier). If HE makes any sales, Sue would earn 15% of his sales.

So now, she not only can earn 30% from her own efforts, but also 15% of someone else's. It's very similar to the MLM concept, the main difference is often the focus isn't the opportunity in the program itself, but more about selling the product.

Pay Per Sale

Pay per sale is either commission based or a flat pay out per sale made. For instance, if you sell a $75 product, you can either get paid a certain percentage (like 30%) of the sale or a flat rate (like $25). There is no second level to earn additional income. Obviously the focus here is just selling the product.

Often affiliates will integrate this or the above two tier example into their existing sites.

Pay Per Click

Pay per click is simply getting paid for every click that you send the company. Let's say that ABC Company is paying 5 cents for every click their affiliates send them. You decide to add their link to your site. Anytime a visitor to your site clicks on the link, you would earn 5 cents.

There are pros and cons to this form of program. As the affiliate, you would need to filter quite a bit of traffic through the link before it would be considered lucrative. Folks who gain the most from this form of program is those who have high traffic sites.

Let say, for example, that you have a high traffic site. You have about 1 million visitors per month. Well, by simply adding a pay per click program to your site, you could easily make big money JUST from the traffic. Not counting the income you might already be making from other methods.

Pay Per Lead (or Co-Registration)

Pay per lead is the same thing as getting paid for the actions your visitors take. There are multiple programs available that will pay per subscriber, per free report requested, per registration etc.

As an example, I know a company that was paying $1 for every registration they received for their sweepstakes. All you, as the affiliate, would need to do is place it on your website. For every visitor that filled out the registration for the sweepstakes, you would get one dollar. Again, for best results, this program works great on high traffic sites or to large email lists.

Summary