In Network Marketing there are four (4) types of Multi-Level Compensation Plans.

Here are the different plans broken down by Wiki definition:

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  • Unilevel or Stairstep Breakaway plans are the oldest and most popular. They feature two types of distributors — managers and non-managers — and three types of pay:
    • Baseshop overrides are overrides (commissions) paid to managers by their subordinate non-managers, collectively called a baseshop. This is the same as any other sales organization.
    • Generational overrides are overrides of managers from the baseshop of managers who were previously their subordinate. Most plans compensate at least three generations of such managers.
    • Executive bonuses are commissions for managers who exceed a sales quota. For example, 2% of the total company sales revenue may go to a bonus pool that is shared monthly pro rata to managers who exceed $10,000 in that month.
  • Matrix plans limit the width of each level in a distributor’s group, forcing strong distributors to pile (”spillover”) their recruits over people who did not sponsor them.
  • Binary plans limit the width of each level to two legs. Commissions are based on “cycles,” where a distributor is paid a fixed amount whenever both legs achieve a certain number of sales units each. Commissions are paid incrementally when the sales volume in each leg matches.
  • Elevator or Matrix schemes feature a board or a list on which each distributor pays in one or more product units to participate. When a certain number of units have been paid in, the structure splits and the earlier participant receives consideration.

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In MLM, besides finding the best product or service to market and the money will follow, you also need to watch out for the compensation plan your company maybe using.

I think the Uni-level Plan is the best, because you are being paid for your hard work and yes network marketing does involve team work but if the majority of your group is not working together then you will not be getting paid, of course the focus needs to be on your product or service you are offering.

In a Matrix plan you have to do depend on your sponsors to have a ’spillover’ before you will be receiving an income, which gives folks the idea that they do not have to do anything except ‘wait’. WRONG, WRONG IDEA! People already think that once they join a company all the work will be done for them.

With a Binary plan you have to earn the company so much money on either leg before you begin earning your income. Now how fair is that? Which means you also have to work extra harder in order to see a penny.

Both the companies I am involved in are Uni-level Plans. JD Premium Products and YTB.

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