What is MLM?
MLM (Multi-Level Marketing) is a system where affiliates earn commissions not only for their own sales but also for the sales made by the people they recruit (their downline). It’s used to motivate affiliates to build and grow a network, increasing overall sales.
With Tracknow’s advanced MLM feature you gain access to the following benefits:
6 Levels MLM
A sale made by an affiliate can generate commissions for 5 levels in his upline.
4 Payout Types
Choose between 4 types of payout types such as fixed commissions, percentages from commissions or the sale itself
Visual Hierarchy Tree
Entering the affiliate manage screen allows to view a visual representation of the affiliate’s downline
Customize MLM Settings
Tracknow allows you enable MLM globally or personally on an affiliate level
Transparent Commission Data
Each affiliate can easily view the commissions he earned from his recruits
Level Relativity
The entire point of MLM is rewarding the upline of an affiliate that is making a sale.
So when we talk about affiliate levels in an MLM structure, we will be looking at the structure from the affiliate making the sale and upwards.
For example, let’s look at the following MLM structure:
If we’ll start with Affiliate 12, we can see that :
Affiliate 10 is ONE level above Affiliate 12
Affiliate 8 is TWO levels above Affiliate 12.
In other words, Affiliate 10 is level ONE for affiliate 12 and Affiliate 8 is level TWO for Affiliate 12.
If we’ll start with Affiliate 11, we can see that:
Affiliate 8 is ONE level above Affiliate 11 .
In other words, Affiliate 8 is level ONE for Affiliate 11.
As you can see Affiliate 8 is both level ONE and level TWO because it depends on who are you relating him to.
Since we allow for up to 5 levels of an upline to gain commissions, based on the structure in the screenshot above, if Affiliate 12 makes a sale, the affiliates that could also be rewarded for his sale are:
Affiliate 10, Affiliate 8, Affiliate 6, Affiliate 4 & Affiliate 2.
Affiliate 1 cannot be rewarded for Affiliate 12’s sale because he is out of scope as he is 6 levels above Affiliate 12.
Commission Handling
Even within the MLM structure, affiliates that make a sale will have their commission handled by the campaign payout, only their upline’s commission for that same sale will be handled by the MLM tool.
Example:
The campaign’s payout is set to reward each sale with 10% of the sale’s amount.
In this example, we’ll apply a 3 level MLM with the following settings:
Imagine that Affiliate 9 shares his tracking link, a potential customer clicks the link and makes a purchase for the sum $100.
Affiliate 9’s commission will be handled by the campaign payout because he’s the one making the sale, so he will be rewarded with 10% of that sale which translates to $10.
Now, since we enabled MLM, the affiliate 1 level above him will be rewarded with 6% of the sale’s amount (based on the MLM settings in the screenshot above) and the affiliate 2 levels above him will be rewarded with 3% of the sale’s amount.
In conclusion:
Affiliate 9 makes a sale for $100. His commission will be handled by the campaign payout.
Affiliate 6 is one level above Affiliate 9. His commission will be handled by the MLM tool.
Affiliate 4 is two levels above Affiliate 9. His commission will be handled by the MLM tool.
Choosing the MLM Type
It’s crucial to understand the differences between the MLM payout types to ensure commissions are calculated as intended.
To simplify the explanations, let’s use this example of a 2 level MLM chain:
On this hierarchy tree you can see that:
Affiliate A recruited both Affiliate B & Affiliate C.
Later, Affiliate C recruited Affiliate D & Affiliate E.
We’ll be focusing on the right-most branch to show how Affiliate B & Affiliate A earn when Affiliate D makes a sale.
In this case we can determine that Affiliate B is Level 1 in relation to Affiliate D (1 step higher in the hierarchy) and Affiliate A is Level 2 in relation to Affiliate D (2 steps higher in the hierarchy).
These commissions are not deducted from Affiliate D’s commission and are paid separately
MLM Type
Commission Based
Upline affiliates earn a set percentage from the commission their downline affiliates generated from a conversion/sale/event.
Example:
Affiliate D generated a sale that rewarded him $100 commission.
The MLM settings are configured to reward the 1st level 10% and 2nd level 5%.
Affiliate B will earn $10 and Affiliate A will earn $5.
MLM Type
Fixed Commission
Upline affiliates earn a fixed amount for each conversion/sale/event generated by downline affiliates.
Example:
Affiliate D generated a sale that rewarded him $100 commission.
The MLM settings are configured to reward the 1st level $20 and 2nd level $10.
Affiliate B will earn $20 and Affiliate A will earn $10. These commissions will remain constant regardless of the amount generated by Affiliate D.
MLM Type
Amount Based
Upline affiliates earn a set percentage from the sale amount their downline affiliates generated.
Example:
Affiliate D generated a sale where a customer spent a total of $100.
The commission Affiliate D earned for this sale is irrelevant because Affiliate B & A’s commissions are calculated from amount of the sale itself. In this case Affiliate B (Level 1 in relation to Affiliate D) will earn 3% which is $3 and Affiliate A (Level 2 in relation to Affiliate D) will earn 1% which is $1.
MLM Type
Relative Commission
Upline affiliates earn a set percentage from the commission their relative downline affiliates generated from a conversion/sale/event.
Example:
Affiliate D generated a sale that rewarded him $100 commission.
Affiliate B (Level 1) will earn 10% from that commission ($10) and Affiliate A (Level 2) will earn 5% from Affiliate B’s commission ($2).
The difference between the Relative Commission and Commission Based types is that when using Commission Based, the percentages are calculated from the commission generated by the downline affiliate who generated the sale.
In Relative Commission, the percentage is calculated from the commission earned 1 Level below relatively.
How to enable MLM?
- Open your main dashboard on Tracknow
- Click the ‘Settings’ button
- Select ‘Multi Level Marketing’ under the ‘General’ section
- Enable the number of levels you’d like to have
- Set the MLM Type according to your needs and fill out the amounts/percentages next to the enabled levels
- Don’t forget to hit ‘Save’
How to see an affiliate’s downline tree?
- Expand the ‘Affiliates’ tab
- Click ‘Affiliate Management’
- Click the 3 dots under the ‘Actions’ column and select ‘Manage’ for the affiliate you’d like to view
- On the manage screen, select ‘Multi Level Marketing’
Here you’ll be able to see all of the Pending and Approved commissions the Affiliate received with the MLM system, filter it by dates, view the downline affiliates who generated these commissions and see the affiliate’s downline tree.
