The Fallen of Affiliate Philosophy

An Opinion from Jacky's Opinion

I need answer from my question below;
What the first company did affiliate program as their marketing tools?

Exactly I don't know the answer, but Let me continue my opinion. The affiliate system has grown up in 19th century as a new invention for company to cut their marketing cost. If we learn more for today; how much Nokia, Samsung, Banks, Food Companies spend their money for advertising? No one know except them, the management staff.

The philosophy of affiliate as I told above have two huge advantages;
Cut Promotion and advertising Cost (Lower in Variable Cost means Lower in Price per unit finally increase profit.). By Affiliate program, the new tool is used to advertise or promote their product are replaced by mouth to mouth; door to door and by buyer (affiliate). So the cost of Advertise equals to bonuses to affiliate. For example; If A sell a product from the company (reseller), A will get a bonus, the bonus also works if A invite a new affiliate ( B ) to the system ( A become Up line and B become Down line. In Economic approve, Bonuses per referral and bonus for reseller Affiliate become best tool.

The second ones of the advantages is The Philosophy itself. Affiliate contains a sense by Company that their product sold out. So if a new referral enters means he buys a product. That's all. Affiliate or referral must buy their product so the company can pay the bonuses.

The experience of Affiliate program, when first time launching worked best in the beginning. But today, it's meaningless. Why? Up lines haven't enough information about the philosophy and Up line just fight force to increase their number of referrals (higher in referral quantity, means more bonuses).

Lastly, when the new trend goes on and on, Affiliate becomes useless, leaved and mo interesting anymore.