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MLM Compensation Plans- What You MUST Know
by Doug Firebaugh
Show Me the MLM Money!
What should you look for in an MLM Network Marketing
Compensation Plan?
Simple answer:
Money.
That is what drives the MLM industry: The quest for a better
life, a better future, and a better income.
Why did you join your Network Marketing company?
For something to do?
Yeah, right.
That is why 99% of all folks who enroll in MLM companies join
for a better lifestyle, and the hope of making more money is
what drives the industry.
Every company has a way they pay their distributors, known as a
“Compensation Plan”, or “Comp Plan”. Every company has one and
that is how you are paid by the volume you have created by the
Compensation Plan.
You go out, and create Volume of sales, and you get a certain
percentage of the sales. Most plans focus on the sale, or
movement of products and services to the marketplace, and that
is what drives the wealth vehicle.
There are different types of Comp Plans to know about and
consider, and there are many more Hybrid forms. But generally
there are 5 different types, and you need to really understand
the Plan that your company has.
There are 5 Types of MLM Compensation Plans, and the 5 Basic
Kinds of Network Marketing Compensation Plans are:
1) The Stairstep
2) The Unilevel
3) The Binary
4) The Breakaway
5) The Matrix
Here is a very simple and brief explanation of each:
1) The Stairstep
The Stairstep is a simple plan that has requirements that you
must meet to get up the “Stairs of Success”. Each stairstep is a
promotion based on Volume usually, and each promotion you make
more money. Usually you must qualify each month for the rank you
obtain to get paid at that rank. And the stairstep usually has a
number of levels or generations it pays down to.
2) The Unilevel
The MLM compensation plan called Unilevel is a simple “Number of
levels” that the company will pay you, and usually there is no
promotion or rank. You make money by getting a certain override
off of the volume, and usually there is a requirement of volume
to qualify for a check.
3) The Binary.
The Network marketing compenation plan called Binary is an
interesting design for a Comp Plan. It usually has 2 “legs” that
you can have “Business centers” in, and you have a volume
requirement to get paid on each leg. There is what is called
“balance” in the Binary. You must balance the volume from each
leg to make sure you don’t have a runaway leg. If one leg
explodes, while the other one sits idle, you must balance the
two with certain volume requirements for each center, and you
usually can override the same volume a number of times with
different business centers.
4) The Breakaway.
This MLM comp plan has been said to have become somewhat
unpopular in the industry, as you could lose the business you
build, once it gets to a certain level of success, and it
“breaks away” to no longer be a part of what you get paid on. It
usually is a stairstep type of Plan, but I have seen it in
others as well. I disagree. It is a good plan for those who work
it.
5) The Matrix
The matrix is a computer driven plan that people are put into
your group by computer, and they go in the next available slot.
Usually this plan is combined with some form of a Binary, and it
does work well if there are a lot of people that are recruited.
When you recruit someone, the computer searches down for the
next open slot, and positions them there. There are some plans
that allow you to override the computer’s selection if you want
them to go a particular place in your downline.
Ok. So now you must choose what kind of plan you feel you want.
Once you join a company, see your upline if you have any
questions at all, and get familiar with the plan you have and
how it works.
INFERNO Secret:
DO NOT get too complicated about Compensation plans. Keep it
simple and make sure you understand that you CAN MAKE MONEY with
it, as that should be a great concern.
The 4 General Areas of a Network Marketing Compensation Plan.
Generally, when you consider an MLM Compensation Plan, you will
want to know about 4 general areas about it that many people
will want to know about:
1) The First area is Retail Profit.
You must show the prospect that they can earn a retail profit
with your products and services. Usually it about 40-50%.
2) The Second Area is Team Overrides.
This is where, just like a Real Estate broker, or Insurance
Broker, you can develop a team of Reps and help them become
successful, and get paid a certain % of override off of them,
just like the Real Estate and Insurance Brokers do. You are sort
of a “Master Broker” for your company, and help others do the
same thing. This is where most people have trouble with MLM.
They don’t understand that what we do is just like a Real Estate
or Insurance Broker, only better.
3) The Third Area is Leadership Bonuses.
This is where you help develop Successful leaders in your group,
and you get an additional bonus or override from your group. You
get rewarded by helping others develop their Leadership, which
is the most fair compensation in the world.
4) The Fourth Area are Rewards -- like trips and cars.
This area is a favorite among Network Marketers. Once you have
reached a level of success, many companies will give you an
additional car payment money, and also take you on trips that
you can qualify for which is a great incentive to work!
Be sure you understand the components of the Network Marketing
Comp Plan you choose. This was just a VERY General Overview, and
that is all.
Again…..KEEP THE COMP PLAN SIMPLE. Show me the money should be
your battle cry!
The More Simple you keep it, the more powerful it becomes in MLM
and Network Marketing.
blessings...
Doug Firebaugh
PassionFire International
http://www.passionfire.com
Copyright 2005 Doug Firebaugh. All Rights Reserved
----------------------------------
About The Author
Doug Firebaugh is one of the top MLM Network Marketing Trainers
in the world. Over a million people a month read his training
ezine. He spent the last 7 years traveling the world speaking
and training on Success. He lives in Birmingham Michigan, and
you can receive a FREE subscription to his training ezine- The
MLM Success HEAT- at: http://www.passionfire.com/pf_heat_4.html
http://www.passionfire.com
Notes On Agel's Compensation Plan:
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Agel's compensation plan is a hybrid of several of these types of payment methods. Agel has one of the first compensation plans designed by network marketers, for network marketers.
Agel takes the cooperative synergy and rapid growth of the binary structure, but leaves behind the balancing and volume requirements enforced by most companies. You are simply paid 10% on the volume of your smaller side. And the unpaid volume on your larger side accumulates until you are able to use it!
Agel then takes the unilevel concept and builds that into a separate sponsorship tree where in addition to earning volume commissions on your binary downline, you also earn bonus overrides on the volume commissions of the people you sponsor down to 7 levels! (And as many wide as the number of people you sponsor.)
In addition to this Agel adds three global sales volume pools of 3% each which are awarded based on sponsorship efforts, downline growth and leadership.
Add to all this outrageously generous sponsoring bonuses of up to $200 and you have a compensation plan that just begs to reward you!
For more information on Agel's compensation plan click to our Agel Compensation Plan page.
Want to start making some REAL MONEY - REAL FAST?!
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MLM Compensation Plans- What You MUST Know - Agel Network Marketing
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