First off, I prefer non-tiered affiliate marketing for the record but there are many effective multi-tiered affiliate marketing campaign possibilities out there. If you choose to offer multi-level tiers to your affiliates, I would highly suggest not going beyond two-tiered marketing approaches. The basic affiliate structure goes like this:
Single-Tier Affiliate Structures – The simplest approach of the two meaning you pay a commission for every sale or lead your affiliates generate. Your affiliates only promote and sell YOUR product.
Two-Tier Affiliate Structure – This can be expanded to multiple tiers and is a more complex model. This structure separates your affiliates into two categories:
The first tier, those who attract affiliates, receive a percentage of what the affiliates signed under them bring in, while the second tier are those doing all the grunt work and actually selling, also earning an additional commission.
Each of the approaches can work and do work. The first one works best if you have access to a large amount of potential affiliates and you want to keep it simple. The second works best if you have access only to a few very active affiliates and you dont mind some extra complexity.
Like I said, if you are just starting out, keep it simple with a Single tier structure