Wednesday, July 31, 2013

What's The Difference Between Affiliate Programs Offering Direct Sales Or A Matrix?

By Howe Russell


One of the main problems with learning how to make money online is the sheer volume of misinformation surrounding every new opportunity. From Empower Network to Avon, every company claims to be the one you are looking for as an affiliate business. Today we will help you to decide one of the most important aspects of becoming your own boss.

Which type of compensation plan is the most profitable - a matrix layout or a direct sales package?

As an affiliate you receive your own ready made home business and you stand to earn a commission each time you sign up a new member or make a sale on a product. This is a growing area of interest for people who are looking to become their own boss in their spare time and perhaps lack the hours it would take to start something from scratch, as this allows them to join an already established company.

You'll generally see two different types of pay structure within these companies. One offers a direct sales structure and another provides you with a matrix style format. What does each one do? Which one is better suited to you? []

First, let's look at how the direct sales package generally works. This involves the affiliate promoting products and services of their chosen affiliate business via a unique link. Each time a customer buys something via that link, the affiliate earns a commission. In most cases this type of plan offers the individual a fairly high rate of pay. Something in the region of 90% to 100% is common.

Let's put this into context so that you can see it in monetary terms. If a company agreed to pay you a 90% commission rate and you referred a customer who spent $10 on a product, you would then earn a $9 commission from that particular sale. This makes it easy to generate a large income in a short space of time.

However, there is one side of a direct sales structure which is not advantageous. Usually they pay you a higher rate per sale because you only earn from your efforts. You won't earn for helping your referrals to earn. This leans to a lot of poor sponsors being attracted to this type of program because they don't need to help anybody else to succeed for themselves.

A matrix format offers a slightly different take on things. First of all, there is a substantially lower pay grade. While that might dim your enthusiasm slightly, this factor may be offset for most people by the advantages which we will show you in a moment. The lower pay structure usually results in a 10% or 20% commission being paid. So if a customer became a member or bought a product from you which costs $10 you would earn a $1 or $2 commission.

The major benefit of a matrix system is that you earn every time a referral makes a sale, too. So while your individual reward is smaller, this combines with the sales you earn every time a team member builds their own business. When you combine both aspects this can lead to a very lucrative income. It also promotes the idea of helping your team regularly, because their success is your success.

Of course, promoting the idea of helping your team can also have a negative aspect. It tends to lead to in-fighting and competition between teams promoting the same affiliate program. It is not uncommon to see teams trying to outsell each other by making bigger and bolder claims, until they reach the stage where they are practically promising to do all of the work for new members if they choose them over other teams. This is impossible, of course, and tends to only attract freeloaders.

Both type of plans have their benefits and drawbacks. Before you jump into any opportunities you should take some time to decide whether you believe you would be able to make money online via a direct sales package such as the one on display in Empower Network or you would feel more at home with a matrix style setup such as Global Domains International. Now that you know how both work, making that decision will be far easier for you.




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