MLM Compensation Plans

MLM compensation plans vary from company to company and are often based on several different factors. MLM or multi level marketing has been around America for at least sixty five years and has touched the lives of millions of people who are looking for a way to have the good life so often propounded in the pep rallies held by multi level marketers. Sometimes revival like in spirit, these rallies speak of million dollar houses and four cruises a year for the top level associates in the multi level program. And since there may be at least a grain of truth in most statements that are made, it is true that the top people do have these luxuries to enjoy, but the soldiers underneath may be paying more for new products, new samples and more training material than they are making from the mlm compensation plans. But for the person who initially gets involved in a multi level marketing scheme, hope not only springs eternal but the product that they hold in their hand is usually the answer for which the world has been seeking for centuries. Be it vacuum cleaners, air cleaners, an exotic lotion from the South Seas, the world's most pure and unadulterated vitamins or five dozen other products, these privately marketed items carry with them an aura of supreme specialty that drives associates or reps to knock on doors, push their products in the church sanctuary and annoy the stuffing out of friends and family. There is enough evidence to confound the highly spirited multi level marketer who stands in front of cheering crowds of wide-eyed enthusiasts who have bought into the blessings that seem possible from mlm compensation plans. There are a number of different mlm compensation plans that are presented but none of them are called by their formal names. The first is called the unilevel compensation plan. Since the distinguishing trademark of the multi level marketing plan is recruitment, this first plan for getting paid allows a person to recruit as many people as possible. There is never a limit and thus since actual reimbursement for profits must be paid out over a very large group of associates. This means very small profits for those nearer the bottom of the pyramid. There is never better advice in life than to know as much about the important things as possible. Solomon, called the wisest human that ever lived had this to say: "My son, let them not depart from thine eyes: keep sound wisdom and discretion; so shall they be life unto they soul and grace to thy neck." (Proverbs 3:21-22)

The second type of income plans form multi level marketing is the binary compensation plan. This is one of the more intricate mlm compensation plans and so a person who discovers that their multi level marketing company pays with this type of structure should study it in detail before signing up. Basically is allows a representative to only recruit two other persons to be company associates. In fact every new recruit is only allowed the recruit two other persons. Essentially what it does is increase the profits for those above and below your trio. While not perfect, this plan is far more profit friendly than the unilevel approach. IN fact the unilevel approach has been the back breaker for most mlm compensation plans because the people at the bottom of the pyramid have historically made next to nothing for their efforts, producing dropouts faster than a flea treatment.

Multilevel marketers have since figured out that a different approach to their mlm compensation plans were in order and they came up with the compressed multi level plan. Without going into a lot of detail here, this plan gets more money for the reps that have been recruited directly under the initial recruiter. This is done by limiting the money made by the recruiter for those new associates under his care, but does increase profits from those further down the line. But then there is what is called the matrix compensation plan. It is based on a person getting a certain number of reps beneath them. But the mlm compensation plans that are based on this paradigm assume that all the members of one's matrix are purchasing a particular amount of product each month. In fact, before someone does make money, a particular product buying quota must be met. Something fishy really smells here.

But there are also the Australian compensation plans that are train wrecks already happening. This is all about recruiting and almost nothing about a product to sell, and the only money made is off of people recruited who then have to buy training materials for a large sum of money. There is no possibility of making money from the work of people you have recruited to the system. Stay absolutely clear of any multi level plan that looks or smells anything like the one just described. In fact, there are many well known companies across the country that are using mlm to promote their products as a way of cutting down on operating costs. Company names that do not carry the stigma that often makes friends and family say, "Ooooooooh, you are into that, uh?" Studies will make one conclude that in most cases, the mlm idea is a dud and only the people who initiate such a plan are the ones who make the big money.