Is there a Better MLM Compensation Plan?

By: joe cotroneo

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.

A popular compensation plan is called the Uni-level compensation plan. It is popular because it is the simplest to understand. You may have unlimited amount of distributors on your 1st level and probably 5 to 6 levels below you, with a percentage of sales paid to you on each 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.

A popular MLM compensation of late is the 1up or 2up payplan. The 1st sales of any distributor in this plan is passed up to the next qualified rep. You begin to make this commission when you qualify by making your 1st 1or 2 sales. This allows you to make larger commissions since the payment is not spread out over multiple levels and you can in fact be paid to unlimited levels in depth. You can make a quick huge income with this plan. A drawback is you must continue to make sales, there is generally no monthly requirement to order product

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.

The author strongly despises one type of MLM compensation plan. That is the Straightline Powerline. It seems so enticing. You participate; and everyone who signs up after you goes under you. The only problem is that in order to get paid, you must meet some outrageous requirements and you make very little money.

The dinosaur of compensation plans is the stairstep breakaway plan. While most of the MLM Community shuns these type of plans, they have the potential for the largest payouts. Some people involved in these type of plans can literally make 100's of thousands of dollars monthly. You make a certain percentage of money based on your group volume......generally up to 25%, and then get paid in depth multiple levels deep based on your breakaway downliners ENTIRE group volumes. Some of these plans can pay breakaway or infinity bonuses 20, 30 or more levels in depth! This is where the security and big money comes from. I consider this the best MLM compensation plan.

I know sometimes it is difficult to decipher different MLM compensation plans. Use the information here as a primer to make your very important decision.

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