Michael, I think there is a pretty big misconception about affiliate programs and MLMs. MLMs can definitely be super shady; especially when there are startup costs and stupid fees.
In the context which I am discussing (mainly for bloggers) I believe it is a good strategy and should be used in most circumstances.
I can only use myself as a point of reference-- I'm in the early stages of setting up some referral programs for my business (and am interested in zferral), and where the idea of having people refer business to my site for an affiliate fee sounds fine, the idea of those same people trying to round up other affiliates for me, well, skeeves me out.
Call me old-fashioned, but I like to keep the incentives clear and close. But maybe that's just me.
First of all, no worries -- you are more than entitled to your own opinion. I agree in many respects, maybe I am naive to think that the company should proactively manage some aspects to ensure the affiliates are ethical and upstanding "referrers."
At some point there must either be:
(1) such an awesome product I will shout it from the rooftops; or
(2) big enough incentive to tell people to try it (still should be a good product)
Dropbox did such a great job because they managed to create the 2nd scenario without a cash outlay.
Appreciate the discussion! Good luck with your programs, whatever you decide to do
Dropbox is a good case in point. I use their service, and happily refer my friends to it-- the "affiliate fee" from Dropbox, in the form of extra storage) is a nice bonus. If my friends refer their friends, that's none of my concern-- and if Dropbox made it my concern (via some incentive), that would feel very uncomfortable for me. I don't want to be that involved in Dropbox's business, and I don't want to start thinking about who I can refer that can refer a lot of other people, or how I can push my friends to refer others, etc.
Similarly, if I have some books I want to recommend on a blog, I have no problem using an Amazon affiliate link. For me to put up a link trying to sign up more affiliates for Amazon, on the other hand, feels wrong-- I've crossed the line from "recommending" to "shilling."
I'm not saying that it is impossible to do multi-tier affiliate systems well; I'm sure there are people that are doing it properly, somewhere. But I'd certainly not make a blanket recommendation that everyone should attempt it, or even that it is appropriate in the majority of cases.
