Everything You Wanted to Know About The 7 Major MLM Compensation Plans
- Date: 2007-07-05 - Word Count: 727
Share This!
With major Authors like Robert Kiyosaki Endorsing MLM Home based businesses it is no wonder these Network Marketing plans are growing daily. As the growth in MLMs continue the growth in MLM compensation plan follows, Here are 7 Major MLM payment plans explained. Many of the TOP MLM plans use a compensation structure based on one or more of these 7 Methods.
1 - Uni-Level MATRIX PLANS
This is often referred to by the un-informed as the Dreaded "Pyramid". A Unilevel Plan is popular because it allows you to grow your organization wth infinite Width and Infinite Depth. Simply Point let's say that you are personally responsible for signing up 10 team members. You will earn a commission on all sales generated by your 10 Team Members. (You could in fact sign up 100 or 1,000 or even 1,000,000 or more people on your first level). Now lets Say each of your 10 Team members Sign up 10. Since 10x10 is 100 You will now have 100 People on your 2nd Level. You would also earn commissions on all Sales Generated by your 2nd level. A Typical Uni-Level will pay down 5 or More Levels. Lets see what the Power of 10 can do for you, if each person were to continue to get 10 this would leave 1,000 people on your 3rd Level, 10,000 People on your 4th level and 100,000 People on your 5th level. While very promising this scenario is extremely unlikely.
2 - FORCED MATRIX Pay Plans
A Forced Matrix is Similar to a Unilevel Matrix but it limits the amount of people each person can have in their first Level. A 3x9 forced Matrix pay plan seems to be very popular among the forced matrix pay plans.
With a 3x9 Forced Matrix The Most People you can have on Level 1 is 3. Now the most people each of those 3 can have on there level 1 is 3 which leaves you 9 people on your 2nd Level, A 3x9 Matrix By the Levels
Level 1 would have 3 People, Level 2 would have 9 People Level 3 Would have . 27 People .... .... Level 9 Would have 19,683 People
* Total - 29,523
One Advantage of a Forced Matrix is Spillover. Spillover occurs when you sponsor more people then can fit on your first level. So if we use the Unilevel Example above and Assume Everyone Sponsors 10 You Would not only completely fill your 3x9 Matrix but you would actually have enough people left over to fill a 10th level of 59,049 and partially fill an 11th level of over 170,000.
3 - Fast Start Bonus
A Fast Start Bonus is Seldom the only part of the compensation plan. More often then not it is used as an extra incentive to sponsor more people. The Fast Start Bonus is Typically a Lump sum payment of up to 100% of the First Months Membership for anyone you sponsor
4 - Sponsor Bonus
A Sponsor Bonus is often used with a Forced Matrix. It is usually a Monthly Recurring Bonus and is paid each month on everyone you personally Sponsor.
5 - BREAKAWAYS
Breakaways are used with Matrix Pay Plans. When a Team member reaches certain qualification they break away from your team and you no longer receive the Matrix Pay out on that team member or anyone in that part of the Matrix (the Break Away). You do however receive a Lump Sum Monthly Commission of the entire Volume of the Break Away Unit.
6 - INFINITY BONUSES
Are often Used with matrix Pay plans. They allow you to earn down an Infinite number of Levels if you meet the Qualification. You could be blocked by someone on a lower level who also qualifies.
7 - BINARY PLANS
A Binary Plan is like a 2xInfinity Forced Matrix with a Twist. In a Binary you would have 2 Legs. You would typically earn a commission on the Entire Volume of your weakest Leg. Many binary's have systems in place that may allow you to earn Commissions at a later (via a Carryover) on your Strongest leg.
While the pay plan is important. It clearly is only one small part of the MLM you choose to join. You should look at the whole package, Pay Plan, Product, Automated Tools. Market Size, Start-Up Costs etc.
------
Mike Makler has been Marketing Online Since 2001When he Built an Organization of over 100,000 Members. Mikes Newsletter http://mastermind-team.info/ Permission Based E-Mail Marketing Methods http://ewguru.com/hbiz/amazingoffer.html Copyright ' 2005-2007 Mike Makler
1 - Uni-Level MATRIX PLANS
This is often referred to by the un-informed as the Dreaded "Pyramid". A Unilevel Plan is popular because it allows you to grow your organization wth infinite Width and Infinite Depth. Simply Point let's say that you are personally responsible for signing up 10 team members. You will earn a commission on all sales generated by your 10 Team Members. (You could in fact sign up 100 or 1,000 or even 1,000,000 or more people on your first level). Now lets Say each of your 10 Team members Sign up 10. Since 10x10 is 100 You will now have 100 People on your 2nd Level. You would also earn commissions on all Sales Generated by your 2nd level. A Typical Uni-Level will pay down 5 or More Levels. Lets see what the Power of 10 can do for you, if each person were to continue to get 10 this would leave 1,000 people on your 3rd Level, 10,000 People on your 4th level and 100,000 People on your 5th level. While very promising this scenario is extremely unlikely.
2 - FORCED MATRIX Pay Plans
A Forced Matrix is Similar to a Unilevel Matrix but it limits the amount of people each person can have in their first Level. A 3x9 forced Matrix pay plan seems to be very popular among the forced matrix pay plans.
With a 3x9 Forced Matrix The Most People you can have on Level 1 is 3. Now the most people each of those 3 can have on there level 1 is 3 which leaves you 9 people on your 2nd Level, A 3x9 Matrix By the Levels
Level 1 would have 3 People, Level 2 would have 9 People Level 3 Would have . 27 People .... .... Level 9 Would have 19,683 People
* Total - 29,523
One Advantage of a Forced Matrix is Spillover. Spillover occurs when you sponsor more people then can fit on your first level. So if we use the Unilevel Example above and Assume Everyone Sponsors 10 You Would not only completely fill your 3x9 Matrix but you would actually have enough people left over to fill a 10th level of 59,049 and partially fill an 11th level of over 170,000.
3 - Fast Start Bonus
A Fast Start Bonus is Seldom the only part of the compensation plan. More often then not it is used as an extra incentive to sponsor more people. The Fast Start Bonus is Typically a Lump sum payment of up to 100% of the First Months Membership for anyone you sponsor
4 - Sponsor Bonus
A Sponsor Bonus is often used with a Forced Matrix. It is usually a Monthly Recurring Bonus and is paid each month on everyone you personally Sponsor.
5 - BREAKAWAYS
Breakaways are used with Matrix Pay Plans. When a Team member reaches certain qualification they break away from your team and you no longer receive the Matrix Pay out on that team member or anyone in that part of the Matrix (the Break Away). You do however receive a Lump Sum Monthly Commission of the entire Volume of the Break Away Unit.
6 - INFINITY BONUSES
Are often Used with matrix Pay plans. They allow you to earn down an Infinite number of Levels if you meet the Qualification. You could be blocked by someone on a lower level who also qualifies.
7 - BINARY PLANS
A Binary Plan is like a 2xInfinity Forced Matrix with a Twist. In a Binary you would have 2 Legs. You would typically earn a commission on the Entire Volume of your weakest Leg. Many binary's have systems in place that may allow you to earn Commissions at a later (via a Carryover) on your Strongest leg.
While the pay plan is important. It clearly is only one small part of the MLM you choose to join. You should look at the whole package, Pay Plan, Product, Automated Tools. Market Size, Start-Up Costs etc.
------
Mike Makler has been Marketing Online Since 2001When he Built an Organization of over 100,000 Members. Mikes Newsletter http://mastermind-team.info/ Permission Based E-Mail Marketing Methods http://ewguru.com/hbiz/amazingoffer.html Copyright ' 2005-2007 Mike Makler
Related Tags: mlm, binary, forced matrix, pay plans
Your Article Search Directory : Find in Articles
Recent articles in this category:
- Marketing And Customer Relationship Management
Send your notice of rent in time, for free. His Craigslist ad rental unit will be available on the s - Google Fundamentals - Simple Ideas You Need To Know
Google has made easy the lives of many of us by making it possible to search on the internet. But, t - Rss Feed Marketing Strategy
There never seems to be an end to new marketing buzz words on the internet. You most likely have hea - Common Mistakes You Should Avoid While Twitter Marketing
A Twitter marketer makes his first mistake by bragging about his products and services. But let's fa - A Tactical Approach To Social Network Marketing
For many social network marketing involves joining any of the available online communities, making c - How To Turn Your Website Visitors Into Customers
Some websites only get a dose of the cost from the money they spent on building up the website. Visi - Content Rich Marketing Strategies For Attorneys
More then just a smartly designed website is essential in today's competitive online market. To succ - Should You Include Video Seo In Your Seo Techniques?
Orange County SEO experts always look forward to include newer SEO techniques in their process. This - Internet Network Marketing - Don't Give Up, You May Be Just 3 Feet From Gold!
One of the most common causes of failure in Network Marketing business is people quitting when they - As Recession Persists Small Businesses Record Success Making Money Online
As the third quarter of the year comes to an end by September, statistics from the 'New York Stock E
Most viewed articles in this category:
- Affiliate Marketing: Feel The Fear And Do It Anyway
It sounds funny to be talking about fear and affiliate marketing in the same sentence. You normall - John Reese Review: What makes Traffic Secrets, Auction Secrets, and the Reese Report a Success
John Reese is one of the most experienced people working on the net today, and has been getting atte - Internet Marketing - Selling To Tony
As usual, I was scanning a forum the other day, and the inevitable question arose: What is the best - MySpace Marketing: How To Distinguish Yourself From The Crowd
When I checked my MySpace Inbox yesterday, one of my "friends" had sent me a message asking "What do - How To Avoid Internet Marketing Misery
Every day you can read stories about people who have made a fortune online. Being an Internet entrep - All About Affiliate Marketing
Affiliate Marketing is a broad topic that primarily deals with you (the affiliate) selling - Make Money with Niche Health Content
The health industry is much bigger than the internet marketing industry. Billions are spent each an - Why Make Money Online
There are so many opportunities on how to make money online. You can start your own business, sell p - Establishing Your Identity on the Internet
If your business plan involves establishing a personal identity on the Internet, this requires some - Internet Marketing Consultants And How They Help You Market Your Business Online
An Internet marketing firm can offer the push that any business web site needs to be recognized by t