hello

it works like this:
if an affiliate refers a user to your website using his affiliate link, and this user purchases something in your website (through J2Store), then a new "conversion" will be created for this affiliate, which means it will assign a commision (whatever you set.. 10%, 5%.. whatever) for that affiliate.

whenever you want, you can pay your affiliates the money you owe them, from their accumulated commissions.

multi-level affiliates means this: https://www.joomlathat.com/multi-level-affiliates/affiliate-tracker/mulit-level-affiliates

it means that if you have affiliates that refer other affiliates, then you can have a "tree of commissions". meaning that the first level affiliate will get a commission, but the parent will get a commission as well.