Well, that simple little explanation of how we make money with every one putting forth just a little effort is what the whole concept of network marketing is based on.
So what's the deal with all of these different compensation plans? Here are just a few of the comp plans that exist today:
1 ups 2 ups Forced Matrices Recycling Matrices Binary Power-lines Breakaways Hybrid Unilevel Breakaway Stair Step - And a few more I probably forgot to mention
If you don't know what any of these are then you're probably a lot better off than the rest of us.
Now all the semantics aside, let me share with you the real deal.
I don't care how you slice it, $1 always equals: 100 pennies 20 nickels 10 dimes 4 quarters Or some combination of such
My point is that the different compensation plans are pretty much just different ways of dividing up a $1. There are advantages and disadvantages to all of them. But the reality is simply this:
No matter what the compensation plan, as long as duplication exists you WILL make a lot of money (and it doesn't even matter if you understand how the comp plan works)
The problem is that companies focus on how wonderful the compensation plan is just like they focus on how wonderful the product is.
Here is an excerpt from a little piece I wrote back in 2005; this should explain my take on compensation plans:
---Start Excerpt
I know of this relatively new MLM Company that explained their compensation plan by saying:
?Our compensation plan is a 4 by 7 forced matrix with roll up and compression, we also pay 13% on the bottom level and we have a 2 up bonus structure that pays to infinity...this is a million dollar pay plan?
WHAT THE HELL DOES THAT MEAN????? Oh I understand, you have a 4 by 7 forced matrix... and blah blah blah why didn't you just say so...well if that's the case then sign me right up.
Understanding the intricacies of a dumb compensation plan that has ?BV? and ?PV? and ?Overrides? and ?Bonus Pools? and a bunch of other crap that takes a PhD just to comprehend is stupid (I think someone created this crap just to make themselves feel smart).
The reality is when most of us are considering joining a new opportunity the questions is our mind are quite simply:
How much money I can make and how many people I am going to have to get to make it happen? Everything else will take care of itself.
---Excerpt Finished
You'll have to excuse me if I sounded a little sarcastic when I wrote this but the reality is this:
Compensation plans are simply ways of dividing up $1. If you are able to get your 3 people (or however many) and those people are able to duplicate each others efforts then you will be successful
(Yes I know I'm repeating myself)
Compensation plans (like products) don't really matter. Having a REAL SYSTEM is WAY more important
Understanding the types of network marketing compensation can be difficult. There are many types of plans, and choosing the best one is not always easy. Different network marketing companies go for different plans, complicating the issue further. Generally, the compensation plan depends on the volume of your sales. This article discusses various types of network marketing compensation plans and how to choose the best plans.
Types of Network Marketing Compensation Plans 1. Binary The Binary Network Marketing Compensation Plan has two branches, each in a different business. The aim of this compensation plan is to ensure that each branch sells some minimum volume. If there is one branch that sells a lot, while the other fails to take off, then you will lose a percentage of your compensation.
2. Stairstep The stairstep compensation plan is where most Network Marketing distributors start. You are promoted to a different level each month depending on the volume of sales.
3. Breakaway Once your Network Marketing business reaches a certain level, a part of it can break away and become an independent business. Though many distributors feel they are losing what they worked so hard on, the breakaway compensation plan has its merits.
4. Matrix A computer program assigns a member to the group the person must work with. It decides the position that the member can be assigned to. Of course, if you think that the person is more suited for another position, you can overrule the computer's decision.
5. Unilevel The Unilevel plan involves no promotion. The company pays you a standard amount once you have made the minimum volume of sales agreed on.
Parts of Network Marketing Business Depending on the areas of the Network Marketing business where you will be paid, the compensation plan is divided among the business. Some of these parts are discussed below.
1. Retail Profit The compensation plan for the retail profit area generally includes 50 percent of the package.
2. Representatives If you are able to make a successful team of company representatives, it generally translates into some kind of benefits package for you.
3. Leadership Bonus If you train successful team leaders who help the company by expanding its affiliate business and boosting sales, the company rewards you in some way.
4. Other Rewards If you are highly successful in your business, the company may give you a bonus, including a free holiday trip or some other reward to show its appreciation to you. This does not generally count as a predetermined compensation plan, but is a pleasant surprise for most distributors.
Additional Help If you have any other questions regarding the network marketing compensation plan, you can approach small business consultants for help. Choosing the right network marketing compensation plan is the first step towards a highly successful business.
Both Devon Brown & David Gass are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Devon Brown has sinced written about articles on various topics from Multi Level Marketing, Emotional Intelligence and Multi Level Marketing. Devon Brown (a.k.a The Success Renegade) Is one of the fastest up and coming superstars in the Network Marketing Industry.Devon is showing the Network Marketing world why the MLM companies and Gurus have it all wrong! Learn more about Devon and take adva. Devon Brown's top article generates over 1900 views. Bookmark Devon Brown to your Favourites.
David Gass has sinced written about articles on various topics from Accounting Guide, Finances and Network Marketing. David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site. David Gass's top article generates over 246000 views. Bookmark David Gass to your Favourites.