What is the Best MLM Compensation Plan?

Before you begin any MLM Opportunity, it is important to know the pay structure and how it will affect your future income. There are so many MLM Compensation plans availble, that it is impossible to cover them all as well as their nuances. Only the most popular will be dicusssed 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 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.

A very effective compensation plan that allows the distributor to make huge chunks of money quickly is the 1up or 2up plan. This compensation plan works by passing UP the first sale or in the case of the 2up plan the first 2 sales. Let's say that the product cost is $150 of which $100 is paid out in commissions. If you just began your business, your first sale would result in a $100 commission to the next nearest QUALIFIED rep. The Qualified rep is the one who has already made their 1st or 2nd sale. This payplan can literally pay to infinity, and much larger chunks of money can be made upfront.

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.

This has just been a starting point for you to understand MLM compensation plans. You are going to have to make a decision on which MLM compensation plan to utilize based on your own circumstances.

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