Before anyone starts an MLM business, one should consider the various compensation plans available from the 1000's of MLM Companies. It is important to know when, how much, and how often one would get paid. There are numerous compensation plans available, however only the most important will be covered in this article.

A popular compensation plan is called the Uni-level compensation plan. It is popular because it is the simplest to understand. You may have unlimited amount of distributors on your 1st level and probably 5 to 6 levels below you, with a percentage of sales paid to you on each level.

Teamwork is the key to any successful MLM venture. The very nature of the MLM business model demands it. The matrix compensation plan accomplishes this very important componenet. It limits the amount of people you can have on your 1st level. This forces everyone to help their downline.

More and More recently the 1up and 2up MLM compensation has been used to create quick and large profits. A distributor can make ALL the commision on the product sold. There is no commission paid on levels which allows this. Once a person has qualified by making their 1st or 2nd sale and passing all that commission up to the next qualified person, they now make the whole commission for themselves on any subsequent personal sales and those unqualified beneath them. It is possible to be paid on infinite levels, however since there is no monthly requirement to order product, the system is reliant on bringingnew sales or distributors in.

A recent innovation is the binary pay plan The reasoning is that since statistics show that the average MLMer only sponsors 2 people, why not design a plan that takes this into account. Basically you have 2 legs and you stack one person on top of the other one. This sounds great in theory, but in practice, what actually happens is that the new distributor has no problem building their 1st leg because of help from the reps above them, but finds it difficult to build the 2nd leg on their own. Since they can't "balance" 2 legs they don't make any money.

I only mention Straightline Powerlines because this MLM compensation plan is gaining in popularity. It seems so attractive.......just one straight line down, each distributor on top of another. Wow......what teamwork! The problem is that the requirements to get paid are so outrageous, you make very little money. The author STRONGLY discourages you from participating in one.

A long time ago......in a different era of MLM compensation plans is the stairstep breakaway plan. Just because something is old doen't mean it isn't profitable. Some of the largest checks in the industry have been made using this plan. Checks of 2-300,000 dollars monthly and larger are not uncommon. You get paid a progressive percentage based on your group and personal volume. When someone attains the same level as you, they breakaway and you make a percentage of their group volume thru multiple levels. Call me a dinosaur, but I know real money when I see it. I wish this type of MLM compensation plan was more prevalent than it is. In my opinion, this is the Best MLM compensation plan.

This has just been a starting point for you to understand MLM compensation plans. You are going to have to make a decision on which MLM compensation plan to utilize based on your own circumstances.