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MLM Compensation Plans Explained

Do you know — and understand– your network marketing company’s stairstep breakaway compensation plan? Could you explain the advantages and disadvantages of a typical binary plan?

Many people involved in MLM believe they have a great product, good commissions…but couldn’t explain every little detail of the comp plan if their life depended on it! (myself included) And what they don’t know might hurt them down the track.

Though most companies ARE good companies, you might be surprised to learn that your company’s comp plan is NOT what you thought. You can continue to bury your head in the sand, or learn the whole truth now before you continue down an undesirable path. It’s up to each of us to do the homework on our company. Even if things looked above board when you signed on, plans and policies can and do change. Protecting your income means that you’ll need to stay informed.

Don’t feel badly if you don’t fully understand the Policies and Procedures, Compensation Plan and Affiliate Agreement. These documents were written by lawyers, and were not written for recreational reading. They are legal documents, disclosures and agreements — so by nature, they must be exact and thorough. And quite honestly, most policies and procedures are meant to protect the company first, not the associate. Just KNOW what you are dealing with

However, just because these documents are lengthy, boring and technical, does not not mean that we should brush them aside or gloss over their contents. If you don’t know the rules, the procedures, and how you are compensated, one day you may wish that you had not buried your head in the sand. There are plenty of good companies. Are you associated with one of the best? Or are you unknowingly aligned with a bad apple?

Want to be able to explain, AND understand a matrix compensation plan?

A unilevel plan?

A binary plan?

Stairstep/breakaway plan?

An Aussie one up? Two up?

I have located some excellent resources on the subject that should help you unravel the mysteries of your MLM company’s comp plan, once and for all.

Recommendation #1: MLM Compensation Pay Plans

Recommendation #2: Network Marketing Compensation Plans – Understand The Mechanics

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Comments on this entry are closed.

  • Perig July 7, 2009, 6:56 pm

    Great site that you have here. A LOT of information which is really good! I also wrote a post on my blog about the differences in the different types of compensation plan.

  • Jimmy Plymouth January 15, 2010, 9:12 pm

    This is why I love TraVerus, being new to the MLM/Network Marketing Industry it really helps to know the compensation plan and the terminology.

    David Manning did just that when he broke down step by step the 3D Compensation Plan he has with our company. I have yet to find another CEO do this. In the videos at http://TraVerusPayChecks.info he goes over in full detail the pro’s and con’s of the Binary, 3×9 Forced Martix and Coded Plan.