MLM Compensation – Are you confused?


MLM CompensationThere are many forms of MLM Compensation.  It can be very confusing trying to make sense of all the different types of pay plans in the industry.   There are many different terms and phrases used when explaining mlm compensation.  It is very important to understand the different types of pay plans so you can determine which one will suit you best.   In this article I will explain different types of plans and the nuances of each one.

The first type of mlm compensation is a binary plan.  A binary plan consists of two legs which go unlimited levels deep, so everyone you enroll will be on the left or the right side.  A binary plan is one of the strongest types of plans for residual income, but it is not very strong for earning upfront money.  In a typical binary plan you get paid a percentage of the total volume from your smallest leg.  In many companies they also allow you to get paid on your biggest leg at a later point.

Forced Matrix vs Uni Level Matrix MLM Compensation

The second type of mlm compensation is a forced matrix plan.  Forced matrix plans are easier to understand then most compensation plans.  An example of one of these is would be a 4×10 forced matrix plan.  In this plan you would have 4 people on your first level, 16 on your second, 64 on your third, and so on.  All the way down ten levels deep.  Spillover can be a big factor in these types of pay plans.  If you personally sponsor more than 4 people then you will begin to put people on  your second level which is the first level of the first 4 you enrolled.

The third type of mlm compensation is a Uni-level Matrix plan.  In this plan you can have unlimited people on your first level, and a limited amount of levels deep.  Uni-level pay plans can be difficult for beginners because you have so many legs.  In order to get a lot of depth out of a uni-level plan your team will need to duplicate.  If you are more experienced and can teach your team the best ways to duplicate success then this plan can be very powerful.  Most of them pay at least 4 levels deep, but some go several levels deeper.

Another element of mlm compensation are bonuses.  There are all types of bonuses in network marketing.  Some of the most popular bonuses are Fast Start Bonuses, Sponsor Bonuses, Infinity Bonuses.  Most bonuses are a way for people to earn some money in the beginning before the residual income builds up.  These bonuses are paid when you personally enroll someone or any of your sponsored members personally enroll someone.

Is the MLM Compensation Plan the Most Imporant Thing?

While many people get caught up in the different aspects of compensation plans, the truth is it is not the most important aspect of being successful in network marketing.  The biggest factor is someone’s success is their ability to generate leads and market their business.  If you do not learn basic marketing skills, then the mlm compensation plan of your company will not even matter.


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