The MLM Opportunity's Smoke and Mirrors - Compensation Plans

This is a series of five articles that I am writing to help you determine which opportunity will make you successful and which ones you might want to steer clear of. These articles go over each one of the rules I use to determine whether the opportunity you are presented with is workable or if you need to keep on looking for a worthwhile MLM opportunity.MLM Opportunity Compensation plans can be pretty hard to completely nail down. The bonuses can be varied in how complicated they are but they usually have something to do with recruiting. This is generally the largest part of the MLM opportunities "opportunity presentation". Enter the Smoke and Mirrors.Most of the hype that you hear during an MLM opportunity presentation will revolve around all of the bonuses. The next time you are sitting through one of these presentations see how quick they move through the monthly percentages and how much time they spend on the bonuses. This is how they make their pay plan sound really good.Think about this a little bit. What are your ultimate goals with your opportunity. Most people that join an MLM opportunity would like to retire someday and live on the residual income that continues to come month after month after they quit actively recruiting.At the point that you are ready to retire your down-line will have earned enough rank with your MLM opportunity that any recruiting bonuses that you earned on your down-line recruiting will dry up as well. The only part of the compensation plan that is sustained is the monthly residual percentages on the volume created by product movement in your down-line. With this in mind the money that really matters is the monthly percentages you get from the volume created in your down-line.What you really need to concentrate on are the monthly residuals and the percentages on the different levels in your organization. This is where your income is going to come from after you retire. This is also the easiest area to compare between MLM opportunity compensation plans.Create a test that you can use for any MLM opportunity compensation plan. The easiest way to do this is to pick a monthly income that you want to achieve before you retire. Figure out how many people it will take to achieve that kind of income on a consistent basis. Remember this does not include bonuses.For the sake of this article I will use $10,000.00 a month as an easy round number to work with. MLM compensation plans can vary greatly when you compare compensation plans this way. The number of people required can vary anywhere from 400 people to 4,000. Now we are starting to get somewhere. With a disparity like that you can really start to figure out which MLM compensation plans are achievable and which ones are completely unreasonable.Let us say that MLM opportunity "A" is 400 people and MLM opportunity "B" is 4000. I am in opportunity "A" and you are in opportunity "B". With the same kind of effort in both MLM opportunities after 4 years we both have 400 people in our opportunity. I am making a residual income of $10,000.00 a month and you are making $1,000.00 a month. Does that seem fair. How do you think our retention differs. In my MLM opportunity my down-line is making enough to cover their auto-ship and break even at about 5 people. In your MLM opportunity compensation plan it will take them 40 or 50 people in their down-line.Most people quit MLM opportunities because they are not making the kind of money that they thought they were, and they do it within the first 60 to 90 days. The down-line in any MLM opportunity needs to start seeing some money within that time period. Is it more feasible to get 4 or 5 people or 40 or 50. Think about it. Make sure that you are aware of exactly how much your MLM opportunity is willing to pay you for your effort. Good Luck.