Many people come into online business and assume that MLM or network marketing is the only way to earn residual commissions.
If your not familiar with residual commissions they are commissions that are paid monthly without having to physically resell a product.
These types of commissions are common in the insurance industry, as well as the MLM industry.
Residual commissions in the MLM industry are usually the result of selling a 'residual' generating product.
The most popular product of this type is the health and vitamin lines.
These products are sold with an auto ship option.
Meaning at the end of the month, the customers credit card will automatically be rebilled and a new supply of the product will be sent out.
This means that every month the sales agent will receive a commission on the product.
This type of commission has made MLM and network marketing extremely popular.
The appeal of the Multi Level Marketing Compensation Plan, is the fact that you can also recruit others to generate these types of commissions, and you also earn a small portion of commission off their monthly residual.
This can amount to massive income if you are able to move a lot of product through personal sales volume and through your sales organization, and this possibility attracts millions to Multi Level Marketing.
The downside of this system is most of these programs force self consumption, meaning the sales agent becomes his first customer.
This is done to guarantee a certain income to performing members of the sales agents 'upline.
' In addition to this monthly fee, many aspiring MLMers pay hefty starting costs, sometimes over $1000.
Since the internet has come around, many things related to this industry has changed.
com we had the first 'affiliate' program.
Which created the first true home based sales agent, and the affiliate industry revolutionized the way commissioned sales is done.
By signing up for an affiliate program, an aspiring home based business owner did not have to put out any upfront money, and made generous commissions off of the products and services he sold.
These were almost exclusively one time commissions that paid no residual.
However, by leveraging off the internet correctly, many were able to make fantastic incomes with these types of opportunities.
It soon became standard for websites to have built in affiliate programs.
The average commissions paid out on these programs have been 5-%15% and the affiliate had to hope to make income by selling their products and services in bulk.
Business owners were buying massive traffic packages to their websites, as most of these affiliate programs kept strict stats and monitored performance.
They would buy traffic in the form of pop overs, pop under, domain redirection etc.
Then came the second generation affiliate programs.
This second generation of affiliate programs did not care about the amount of traffic sent to their sites, and paid out higher commissions.
Digital product affiliate programs became wide spread, and we saw the creation of click bank.
And one time commissions of 50-75% were common place.
The affiliate program scene had been revolutionized.
There was still one problem however...
affiliate programs lacked the ability to offer residual, and the ability to 'recruit' others to leverage off of.
What we have today is probably the most powerful form of affiliate programs ever available.
These are called the "two tier" affiliate programs.
These programs allow affiliate business owners to make huge upfront commissions (40%-60%) while allowing them to recruit others and be paid override commissions on their first level sales.
Two tier affiliate programs only pay down one level, but the huge commissions offset that limitation.
, and may of these programs have also began offering residual commission products.
These can be membership sites, a monthly shipment of a digital product (video, audios etc) which pay the affiliate monthly, and their upline sponsor monthly.
These programs have all the advantages of an MLM, without any out of pocket expense to get started, but the same problems exist for these opportunities that exist for MLMs.
A coherent system of marketing.
MLM's biggest weakness may be the difficulty of getting started, and the same applies to two tier affiliate programs.
By having a powerful marketing system, and a way of generating leads and prospects, this problem can be overcome and huge amounts of money can be made.
Two tier affiliate programs will generate many millions of dollars over the coming years, and now is the time to position yourself to take advantage of this powerful new income opportunity.