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When you are contemplating on whether or not to start an MLM Business, it is important to know the difference between all the MLM compensation plans available. It is impossible to include all the types of compensation plans available and their slight differences. Only the most common plans will be covered here. 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 on your 1st level. Teamwork is the key to any successful MLM venture. The very nature of the MLM business model demands it. The matrix compensation plan accomplishes this very important componenet. It limits the amount of people you can have on your 1st level. This forces everyone to help their downline. 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 bringingnew 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. A new variant of the binary is the one leg straightline Powerline. While it is easy to build one straightline powerline, the payouts are often small compared to the effort required to make any meaningful income.The author once sponsored 30 people personally into a reputable Powerline Company, and still did not make enough money to cover product cost. Stay away from Powerlines! 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 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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