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A BRIEF LOOK AT 4 MLM COMPENSATION PLANS
by: Judy Thompson
Copyright 2005 Judy Thompson

If you are thinking about joining a network marketing company, also referred to as multi-level marketing, or MLM, one important item you will want to understand is its compensation plan. Otherwise, “How will I get paid?”

There are four basic kinds of MLM compensation plans that will be described in this article.. Each of these may have several variations. Some plans are better suited for the people who really enjoy sales and may desire to retail a lot of products. Some plans are designed to attract especially the “heavy hitter.” Some plans pay well for the beginner and may or may not be attractive to the big recruiter. Some plans make a serious effort to reward even the little guy or gal who can only sponsor or recruit a few people, but also pay very well to the top distributors.

These plans are called Unilevel, Stairstep Breakaway, Binary, and Matrix.

1. UNILEVEL. This is a simple, straightforward compensation plan. It allows for a distributor to have a first level of unlimited width. The levels the company pays commission on generally range from 3 to 9 levels deep. The more volume generated by you and your organization, the more you can earn. A disadvantage to this plan is that building wide means the distributor may give less help to his personal enrollees.

2. STAIRSTEP BREAKAWAY. This is the most common of all the compensation plans. It is where most of the really big money is made in MLM. This big money, however, is made by a very small percentage of people. Breakaway plans are geared for full-time effort. Attrition is the highest with breakaway plans and it generally will cost more to build your business. This is a work program. It takes persistence, salesmanship, and requires the ability for you to train your recruits. Companies which use breakaway plans tend to pay higher commissions. However, the plan may be extremely difficult for most people to duplicate.

3. BINARY. This is a very complicated and hard-to-understand plan. It does, however, offer a simple system that is easy to duplicate. Otherwise, you recruit just two and help them do the same.

4. MATRIX. This plan allows you to build a limited width organization. For example, a 2 X 12 group means two people on your first level, and paying 12 levels deep. Other examples would be a 4 X 5, 3 X 9, etc. This is generally pretty simple and easy to understand and explain. The low volume requirements usually common to matrix plans helps make it a good plan for part-time distributors.

The above briefing only scratches the surface of these compensation plans. For a more detailed description, you may wish to go to: www.mlminsider.com

Even though some of the internet hype may claim that you can make big bucks with only a little work, don’t believe it! With network marketing, as in any other business, you’re going to have to work at it and make some investments if you expect to be successful. To make money in MLM, you will have to work, no matter what company or compensation plan you select!


About the author:
Judy Thompson, a former teacher and business owner, is also an experienced network marketer. She promotes a nutrition company that has an automated support system. For details, go to: http://automaticbuilder.com/333015895/?source=sya505


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 Network Marketing Do's and Don'ts
 by: Nial Robbins

Why did you become a network marketer? Most people immediately respond, “for the money!” However, this is not the real reason.

No one subjects them to the hard work of building a business just for little pieces of paper with the faces of dead presidents. The truth is you work in order to obtain what those little pieces of paper can bring you.

The first thing you need to do is to find the reason WHY you are a network marketer. Is it the freedom to choose whatever you want to do whenever you want to do it? Maybe you are looking for a different lifestyle. If there is one thing that is critical to your network marketing success, this is it. If you don’t have a reason, there is no motivation to succeed.

A network marketing business is a teaching and coaching business. If you don’t like interaction with other people, a network marketing business probably is not for you. There’s a concept that most network marketers just can’t seem to get a handle on. You do not sponsor “reps,” you sponsor “people!”

If you have to find a reason why you are building your business, then doesn’t it stand to reason that other people will have to do the same thing? If that’s the case, then why is it that network marketers continually focus on how much money your prospect can earn?

There’s no way you are going to convince “Joe Sixpack,” to get out of his Lazyboy recliner unless you find out what his motivation is. Most network marketers literally pound in the amount of money Joe can earn. They bombard him with message after message about how “Successful Sam” has just purchased his 10th Porsche, refurnished his 25,000 square foot cottage and promise Joe that he can do the same!

Just how realistic is this approach? Joe isn’t stupid. He works long, hard hours at his job in order to provide for his family and truly believes that the best thing he can hope for is saving enough money by summer to pay for a camping trip. Then here you come, promising Joe that he can have everything that Sam has and he can have it if he will just sign that piece of paper making you his sponsor!

You will probably sponsor a few people that way, but if you are in business for the long haul you need to change your approach and do it fast.

The proper approach is so simple, but in your rush to sponsor another “rep” instead of helping another person, all too often you talk yourself into and straight out of sponsoring the Joes of the world.

God gave you two ears and one mouth and he did it for a reason. We are supposed to “listen” twice as much as we “speak.”

Instead of pouncing on Joe with the latest and greatest network marketing program of all time, find out what Joe wants and needs. Ask him questions, lots of questions. In fact, in your first meeting with Joe, don’t even mention your business! Yes, that’s what I said. Don’t even bring it up. Remove yourself from the super duper network marketing persona and spend time making a new friend.

Follow these recommendations and you are set to grow your business exponentially.

NOTE: You have full permission to reprint this article within your website or newsletter as long as you leave the article fully intact and include the "About The Author" resource box. Thanks! :-


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