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First Tier and Second Tier Affiliate Commissions Explained
First Tier Commissions
Tier one commissions or first tier commissions are a simple percentage of the profit of a sale. This is usually the total price paid for a product or service you referred with your affiliate link minus the payment processing fees and then the percentage your commission rate is.
For example, using the Platinum Level MAP account, which has a 75% commission rate for sales of membership levels.
If you are a Platinum Level or MAP Backer your commission rate on membership levels is 75%.
If you refer a Platinum level annual membership through your affiliate link. The total your referral paid is $797. The fees incurred by MAP are approximately $42. MAP receives a profit of approximately $755. Your commission is 75% of the $755 ie approximately $566.
Second Tier Commissions
Tier Two commissions or second tier commissions are when you earn on when someone you refer makes a sale. This is not part of every affiliate program, but can be very profitable when it is.
Staying with our example above, using the Platinum Level MAP account, which has a 25% second tier commission rate for sales of membership levels.
If you are a Platinum Level or MAP Backer your tier two commission rate on membership levels is 25%.
If you refer someone to an annual Platinum level who then refers a Platinum level annual membership to someone else. The total their referral paid is $797. The fees incurred by MAP are approximately $42. MAP receives an initial profit of approximately $755. They pay the first affiliate 75% ie approximately $566. MAP’s profit after fees and first tier commission payout is approximately $189. Your second tier commission of 25% of that is approximately $47. Remember, those are annual membership commissions that you get paid every year in this case.
