How to Choose The Right Compensation Plan in MLM

Each MLM company uses a different type of compensation plan. It is easy to get confused how a plan works when you see one for the first time, even if you already have had previous experience in network marketing.

Here are the 4 main Compensation plans network marketing companies will utilise:


Binary Plans:

Companies will emphasise the 'spill over' concept with this type of plan. The consequence of this is that if you have a sponsor who is growing their organization rapidly, you can profit from the introduction of new distributors. The potential in this case, is you only need to focus on building one of your teams. However, most of the companies that use this type of program, generally pay you on the weaker leg in the binary so you are still responsible for keeping a good balance on both legs of your organization.


Matrix Plans:

The typical matrix is limited in width on the first level to usually 2 positions although with some companies it can go much wider. And it usually has a predefined depth level of 5 to 12 with linear commissions. The issue with such a structure is that the 2 posititions you enroll don't duplicate your work. Binary and Unilevel pay plans are increasingly favoured by MLM companies now, so this type is becoming less popular.

Unilevel Pay Plan:

This type of compensation plan only allows you to personally build one level in your organization. With no limitation on the width of your frontline (first level) the objective is to recruit as many distributors as you can and target them to do the same. Commissions are usually restricted to a maximum of 7 levels however. To earn a commission using this structure there is normally only a minimal amount of personal volume that is required, which essentially makes it easier for part-timers to earn an income.
A drawback of this type of system is that everyone you bring effectively competes with everyone else, which means that they are a part of your team but not team members that are really working with eachother.

Stair Step Breakaway Pay Plans:

The Stair Step Breakaway plan is the most familiarised comp plans. Once distributors in your team get to a specific level, they effectively breakaway and form their own organizational unit within the company.
This may not appear to be very appealing at first, however most network marketing companies will pay out a percentage of commissions to you on these new business units.
This system is good for those who can maintain a good level recruiting new reps and able to grow several breakaway organizations.

If you are still not sure how a compensation plan works when you come across one, be sure to ask your sponsor or someone more experienced person to explain it to you so you fully understand it. Only then can you be assured it suits you. It does not matter how good a compensation plan appears as you still need to take everything into account regarding the company. - Do you like their products or service? Does it take a lot of sales to make the comissions you want? etc.

EveryMLM Compensation Plan has its advantages and disadvantages. Providing you get your marketing strategy right you can make any of them work for you and profit from it nicely. If you would like to learn the EXACT system to market and build any MLM or home based business successfully on the internet by generating huge traffic, unlimited leads, and income all on autopilot visit Online MLM Domination now!