Before anyone starts an MLM business, one should consider the various compensation plans available from the 1000′s of MLM Companies. It is important to know when, how much, and how often one would get paid. There are numerous compensation plans available, however only the most important will be covered in this article.
By far, the simplest compensation plan to comprehend is the uni level. For the most part it goes 5 to 6 levels in depth paying a certain percentage on each level. You may sponsor as many people you want on your 1st level.
The matrix compensation plan takes the uni level plan to a different level. It does this by limiting the amount of reps a distributor can have on their 1st level. Once you sponsor more than the allotted amount on your 1st level, the rest go under you in the next available open slot. This is called spillover.
More and More recently the 1up and 2up MLM compensation has been used to create quick and large profits. A distributor can make ALL the commision on the product sold. There is no commission paid on levels which allows this. Once a person has qualified by making their 1st or 2nd sale and passing all that commission up to the next qualified person, they now make the whole commission for themselves on any subsequent personal sales and those unqualified beneath them. It is possible to be paid on infinite levels, however since there is no monthly requirement to order product, the system is reliant on bringing new sales or distributors in.
Some very successful companies use the binary payplan. What happens is that you get 2 legs to build…..stacking people one on top of another. This seems great, using the concept of teamwork to the maximum. The problem lies in the fact that you generally get a lot of help from your upline to build the 1st leg……but NO help to build the 2nd. Since the legs must “balance” against each other; for instance 6 sales in leg 1 and 3 sales in leg 2 to get paid……you get a lot of sales in leg 1 and no sales in leg 2 which means NO money paid to you. You guessed it….a lot of people quit this quickly.
I only mention Straightline Powerlines because this MLM compensation plan is gaining in popularity. It seems so attractive…….just one straight line down, each distributor on top of another. Wow……what teamwork! The problem is that the requirements to get paid are so outrageous, you make very little money. The author STRONGLY discourages you from participating in one.
Some time ago, the largest MLM companies used the stairstep breakaway plan. This type of MLM compensation plan produced some of the largest incomes in the MLM Industry. Checks of 2-300,000 dollars monthly and larger were being paid out. Somehow this type of MLM compensation plan was relegated to the scrap heap. This is my favorite type of MLM compensation because it simply pays the most over time. You make an escalating percentage on your group and personal volume sales, sometimes as high as 40%; and you make breakaway money on those who have gotten to the highest point in the payplan based on their group volumes thru more descending levels.
I realize this is a simplistic explanation of MLM Compensation plans. Many plans have variations and other added bonuses to make their MLM company plan special. Choose the one that is best for your circumstances.
The truth is, home-based MLM businesses can work. It simply takes time and careful research to choose the right one. Avoid the problems discussed in this article and you will be sure to find the MLM home business for you.