What is the point where its considered MLM? I know that network marketing requires registrations in several U.S. states. I want to create a multi-tiered affiliate program that’s at least 2 tiers, and maybe up to 10. I’ve heard that 2 tier affiliate programs are legal in all 50 states but I wasn’t sure about 5 or 10 tiered affiliate programs.
Multi-tier affiliate programs ARE MLM! If you go to 5 or 10 tiers, you are quite likely to be investigated (or charged) for Ponzi-Scheme type of fraud. You absolutely must hire a good attorney on this one, someone with experience in setting up MLM and multi-tier affiliate marketing. Failure to get a good attorney to advise you on this and draft proper legal agreements for affiliates will definitely cost you a bundle, and could quite likely land you in jail.
Get a lawyer!