Monoline, matrix, binary, unilevel – yes there are many compensation plans in MLM business. MLM compensation plans can be confusing. Also; there are a number of aspects to consider when it comes to the point of selecting a good MLM compensation plan.
With this comes the next important question – how can you pick one that will allow you to be successful? The goal is to be educated enough to recognize a good MLM compensation plan
Here are some factors to consider
Can You Make Money Right Away with the MLM compensation plan that is being presented to you?
It makes sense to mention here that most of the MLM compensation plan typically reserve most of the money for the big distributors. Well; that’s a good strategy however you should inquire and look for an MLM compensation plan that also allows those just starting out to get paid too.
Take it in writing; the compensation plans that do not allow new members to get paid in the beginning risk a high dropout rate. Yes; it’s quite a fact that people tend to get discouraged if they do not see results from their efforts early on. So here’s a tip – I suggest looking for MLM compensation plan with a “fast start” bonus of some kind.
Is the Company Properly Capitalized?
Here’s the process for you – an MLM company makes money in a number of ways such as the product, membership fee, annual renewals, training and marketing tools and beyond. The company then pays out money to its distributors. So; here’s another tip- a successful MLM never pays out more than it brings in. Otherwise, it will go under. This makes the MLM Company sustainable.
Now take a closer look at how the MLM plan you are considering is capitalized.
This is yet another important aspect to consider. Consider where it is making its money. What is the percent of the money it brings in is it paying out to its distributors. So here’s another tip – you do not want a company to pay out more than 80% of what it brings in.
Is the MLM Compensation Plan easy to understand?
You need an easy to understand compensation plan to make your business successful. Here’s another tip – MLM companies with complicated or compensation plans will set you up for failure.
Worry not; the traditional plans have proven to be successful. They work!