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Explaining Buckets: Affiliate Payment/Incentive Methods

Posted on 10.31.2006
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Multi-level Marketing (MLM) gets a bad rap, but rightfully so - it's simply too closely associated with the "pyramid" (usually followed by 'scheme')style of marketing to be legitimate in the eyes of many affiliates and publishers. Is there a better way? Many affiliate managers believe so and are returning to a once-popular way of rewarding those that contribute the most sales to a business.

The concept is called "Buckets" and it's nothing new, but one way to motivate affiliates to produce more and reward them when they do. Here's how it works:  You have a $100 product. When an affiliate generates five orders, you give them a certain percentage - say 5%. When an affiliate generates six to ten orders, you would give them 7%, 11 - 20 orders - 10% and so on. These small increases in percentages may not seem like it would mean much to affiliates, but it does. And here's why - if an affiliate generates 20 orders of a $100 product and you offer them 5% - that's $100. Using buckets, if that same affiliate generated the same 20 orders of a $100 product, the affiliate would earn $200.

Will this cost you more money? Of course. However, you'll be making more in the long run. Strong, effective affiliates and publishers are attracted to these types of offers. Naturally, the better an offer, the harder an affiliate is going to work for you and your brand.

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