Case
6 (Affiliate)
During a party with her friends, she discusses this problem with Rod, who is a trader. Rod makes money by means of arbitrage opportunities on financial markets. He advises Lee to use this idea (arbitrage) in her business.
Lee spends about month to think about this( See AP_MLM arbitrage). She decides to follow Rod's advice and to increase her income using arbitrage.
|
Date |
Event |
Lee’s Actions |
|
2/2/00 |
AP Settings |
Set up AP settings: 5-levels, type=%, period=1 month on the first level-4% on the second level-3% on the other levels-1%. |
|
2/7/00 |
Announcement of AP |
Lee announces her AP. |
|
February |
First 10 affiliates |
Lee registers the first 10 affiliates with IDs from 1 to 10 and Reference ID=0. |
|
March |
The second level affiliates |
Lee registers 10 new affiliates with IDs of 11 to 20 and Reference ID=1, 10 new affiliates with IDs of 21 to 30 and Reference ID=2, 10 new affiliates with IDs of 31 to 40 and Reference ID=3, ..... and 10 new affiliates with IDs of=91 to 100 and Reference ID=10,for a total of 100 affiliates |
|
April |
The third level affiliates, first sales and payments |
Lee registers about 1,000 new affiliates (each old affiliate referred about 10 new affiliates). Each old affiliate generates about $40 sales, so Lee has the following income from the merchants: $40 from the first-level affiliates(10% from 10*$40), $400-from the second-level affiliates. Lee pays $296 to the affiliates. As result Lee has a profit of $144. |
|
May |
The forth level affiliates, new sales and payments |
Lee registers about 10,000 new affiliates (each affiliate on the third level referred about 10 new affiliates). Each old affiliate generates about $40 sales, so Lee has the following income from the merchants: $40 from the first-level affiliates(10% from 10x$20), $400 from the second-level affiliates, $4,000 from the third-level affiliates. Lee pays $3,496 to the affiliates. As result Lee has a profit of $944. |
|
June |
The fifth level affiliates, new sales and payments |
Lee registers new affiliates on the fifth level. Each old affiliate generates about $40 sales, so Lee has the following income from the merchants: $40 from the first-level affiliates, $400 from the second-level affiliates, $4,000from the third-level affiliates, $40,000 from the fourth-level affiliates. Lee pays $39,496 to the affiliates. As result Lee has a profit of $4,944. |
|
July+ |
Sales and payments. |
In July the market of affiliates is saturated, so there is no growth of the affiliate's network. Average sales per affiliate is about $40, so Lee's monthly income stabilizes at about $4,944. |