The basic idea is that "Maderia" (working title) will be an incentive based website, a paid to shop website if you will, where users are paid a percentage of our affiliate commission to shop through our supplied affiliate links. The twist is that Madeira will have a lot of community aspects to it, including the innovative idea of "clusters" and the "activity ladder" which will be explained later. The basic idea of the community aspect is that high players are rewarded, following the Darwinian system. Additionally, there will be a three tier referral system with referrers earning very high percentages of points that the people they refer earn. So this means that people don't even need to shop to make money, as they can just refer people who shop for them.
Every time a user buys something through our affiliate link, we are paid a certain comission on the sale. A percentage of each commission goes to different funds, including:
Here is a detailed breakdown of where the money goes. What each one of these things does is not necessary to know right now and will be in their own sections.
| Where it Goes | Percentage | If $20 Commission |
|---|---|---|
| The User (Buyer) | 40% | $8.00 |
| Activity Ladder | 4% | $0.80 |
| User's Cluster(s) | 11% | $2.20 |
| Tier 1 Referrer | 10% | $2.00 |
| Tier 2 Referrer | 7% | $1.40 |
| Tier 3 Referrer | 3% | $0.60 |
| Profit | 25%, 28%, 35%, or 45% | $5.00, $5.60, $7.00, or $9.00 |
As you can probably see, the profit percentage totally depends on how many tiers of referrers there are. Perhaps most commonly there will be no referrers, which will yield a 45% profit margin.
Perhaps the most lucrative way to earn money through Madeira will not be by actually buying items, but referring other people to do that for you. The basic idea of a referral system is that you give someone a special link (e.g. madeira.com/refer.php?referrer=miles) that when clicked puts a cookie on their system marking you as their referrer. This cookie, in our case, will last for 20 days (an adjustable number of course) and if another cookie is installed, it will override the previous one. When this user (User A) signs up within those 20 days of clicking your special link, you will be credited for their signup and marked as their referrer. That user then joins your Tier 1 referral pool, which means you referred them directly, and you will earn 10% of all commissions generated by that user, as denoted in the table above.
Now, suppose that user that you referred refers a user (User B) to Madeira in the same fashion. While this new User B joins User A's Tier 1 referral pool, they join your Tier 2 referral pool because they were referred by User A, whom YOU referred. You would then earn 7% of all commissions (17.5% of user's earnings) generated User B (25% of user's earnings). In addition, if User B now refers someone (User C), they join your Tier 3 referral pool, the final pool possible. You now earn 3% of all commissions (7.5% of user's earnings) generated by User C.
Obviously, this three tier referral system has HIGHLY lucrative potential. Imagine referring hundreds of users and having them refer even just 10 users a piece. That would put a lot of people in your referral pool. But since this is not a marketing piece and is instead a programming overview, I will not detail that here.
As an additional incentive, there will be contests where the user who collects the most people in their Tier 1, 2, 3 referral pool is rewarded with increased referral commissions.
The idea of clusters is the driving force behind the community aspect of Madeira. Basically, a cluster is a group of 10 people who pool their earnings which are then distributed amongst the users in that cluster at the end of the cluster period (an arbitrary number, most likely two weeks). Money is distributed amongst the users based on their activity, where the more points a user contributes, the higher of a dollar reward he receives.
NOTE A: As a universal rule in any aspect of Madeira, users are ranked based first on their total accumulated points, second on their total number of purchases, and third on their registration time.
Every item a user buys will carry a certain amount of POINTS designated to go towards the user's cluster. Our system will associate these points with a dollar value (11% of our affiliate commission), but the user will only see how many points they have contributed to their cluster, as this is the primary ranking factor and maintains the idea that they are receiving a BONUS. At the end of each cluster period, before realigning the clusters, the system will distribute to everyone their dollar bonus they have earned...
The whole point of a cluster (and Madeira as a whole) is that the people who buy the most are rewarded. Below is a table showing how much a user would be rewarded assuming the number of 314 points to one dollar. This ratio really doesn't matter, and any random number can be assigned.
| User | Receives | Contributes $ | Contributes Points | Receives $ |
|---|---|---|---|---|
| A | A + 20% F | 10 | 3140 | 11.00 |
| B | B + 20% G |
9 | 2826 | 9.80 |
| C | C + 20% H | 8 | 2512 | 8.60 |
| D | D + 20% I | 7 | 2198 | 7.40 |
| E | E + 20% J | 6 | 1884 | 6.20 |
| F | 80% F | 5 | 1570 | 4.00 |
| G | 80% G | 4 | 1256 | 3.20 |
| H | 80% H | 3 | 942 | 2.40 |
| I | 80% I | 2 | 628 | 1.60 |
| J | 80% J | 1 | 314 | 0.80 |
As the table shows, the top 5 users in each cluster receive much greater rewards than the bottom five, feeding off 20% of each of the bottom five. The marketing campaign will ensure that users understand the top five are rewarded, once again proving the universal Darwinian theory on Madeira.
Every two weeks or so, clusters will be realigned and payout their users their respective earnings. The way clusters are realigned is by grouping consecutive sets of 10 people together from the activity ladder. For example, the top 10 most active users will be in a group, users 10-20 will be in a group, etc. This ensures that high players are not stuck in dead clusters. As new users join the site, they are placed in the queue for the next cluster to be made. Users can contribute points to these new clusters even before they reach 10 users, but they cannot receive their payout until that happens.
Obviously, clusters are where the most user to user interaction happens. Individual cluster rankings will be viewable in real time by each user in that cluster. Additionally, each cluster page (only viewable by users in that cluster) will have a message board feature where users can post messages to each other and interact with the cross-site private message system.
The third way to earn money on Madeira is through the "activity ladder." That's just the term for the current ranking of users, which will be viewable from its own page on the site. The idea is that every time a user buys something, 10% of the 4% of our commission (0.04%) goes to each of the ten users above. The difference between the activity ladder and clusters is that clusters have a two week delay until the next "cluster realigning period," while the activity ladder is realtime. The 0.04% goes to each of the users above you WHEN you buy a product.
For the people in the top 10, any left over percentages will be kept as profit. For instance, if the 9th user down buys something, 0.04% will be added to the profit.
Since a large idea of Madeira is competition, it will be inherent in many aspects of the site. For instance, there will be competitions from time to time. An example of such a competition is a referral contest. The person(s) who puts the most people in his referral pool (Tier 1 + Tier 2 + Tier 3) will win a prize. An example of this will be the opening competition. While Madeira is in beta, a referral competition will be going on until a month after the public opening. The top 10 referrers at the end of this time period will receive their choice of the following prizes:
In addition to competitions such as that, during every period, a raffle will be held. Every 50th user (1/50x where x is the number of users) will be entered into it. Every 20th user in this raffle will win and be able to choose one of the above prices (unless they have already won before.) If they have one before, they may apply for consideration of further rewards.