Understanding MLM Compensation

The vast majority of folks thinking of starting an MLM home business have a reason or two as to why and the reasons are usually very clear. Pay off debt, pay off credit cards, improve their lifestyle, replace a lost income. So, understanding MLM compensation is important. In this article I am going to address the different MLM compensations plans that are typically available.MLM Compensation Bonuses:Some plans employ hybrids, this is where they combine 2 or more of these payment types into their MLM compensation plans. In addition to the staple plan, you may also find where a weekly bonus is offered, or maybe an infinity bonuses where once qualified you can get paid on infinite downline activity. Sponsor bonuses are also attractive; this is usually affiliated with a matrix plan and can be a recurring monthly bonus. Fast start is another popular bonus offered; it is designed to motivate new distributors to sponsor more people. These bonuses are a great way to boost your earnings, but you do have to qualify.Uni-Level Matrix PlansA Unilevel Matrix will allow you to have unlimited width and limited depth in your downline. Let's look at an example, let's say that you are personally recruit 10 new distributors into your organization. You would earn a commission on all sales generated by your personally sponsored 10 new team members. Remember that you could in fact sign up 100 or 1,000 or even 1,000,000 on your first level. Now follow the math, if each of your 10 new distributors each signs up 10 new distributors that's 10x10= 100. You would now have 100 people on your 2nds level. Most Uni-level MLM compensation plans pay down to your 5th levelForced Matrix MLM PlansA Forced Matrix MLM compensation plan is pretty close to a Unilevel Matrix. However it does limit the amount of new distributors you can have on your first Level. A more common version of a forced matrix plan is a "3x9 forced matrix". With a 3x9 forced matrix the most distributors you can have on your level 1 is 3. Now the most distributors each of those 3 can have on there level 1 is 3. So this would leave you 9 people on your 2nd Level. One of the attractions of a forced matrix MLM compensation plan is the spillover. Spillover happens when you sponsor more new distributors then can be placed on your first level. If you refer to the Unilevel example above and make the assumption that everyone sponsors 10 distributors, you would not only completely fill your 3x9 matrix, but you would actually have enough people left over to fill a 10th level and an 11th level.Binary PlansA binary MLM compensation plan is like a forced matrix plan, but with a slightly different twist to it. In a typical binary plan you have 2 Legs. You would normally earn a commission on the entire sales activity of your weakest leg. I have seen some binary systems that may allow you to earn commission at a later date on your strongest leg.Researching the MLM compensation plan before joining any MLM opportunity is important. But, you need to also look at the upline support, product line, marketing tools and more. This will allow you to paint a complete picture before joining.To Your Success,Gerald Stidham