Compensation is the main factor which lures more and more people in dabbing a bit into the MLM business industry. For the uninitiated; compensation is the payment or profit given to someone in exchange for a work or sales done to a certain company or business. Well; it can be in the form of salary, incentives, commissions or percentage, benefits and so on. In direct sales industry such as MLM the compensation models are typically set up as single level or multi-level compensation.
While in the single-level compensation plan representatives are paid solely on one’s sales, in case of the multi-level compensation plan they earn commission on both their sales and of those they bring into the company. Your direct sales business needs the right compensation model in order to work.
The good news is; there are in fact a number of variations of compensation plans available and each one of them also has its different MLM software pricing depending on the model.
We will talk about 3 types of compensation models.
Unilevel MLM plan: The unilevel plan is one of the leading MLM or multi-level marketing compensation plan that allows the distributors to make money from every new purchase or repurchasing of the company products. Here the recruits or representatives does not grow or advance in position other than as distributors. They earn according to their performance without any promotion or advancement.
Next is the Matrix MLM plan: In this plan the representatives are typically limited only to a certain number of recruits. It works well with companies whose products are used personally by the distributors than being sold to other people.
Binary MLM plan: In this particular plan the distributor is allowed to occupy one or more business centers each limited to two down line legs. Compensation here is based on group volume rather than percentage of sales.
It is all about choosing the right compensation model and software that has the ideal MLM software pricing. Of course; there are many players in the market so play your part well and select only the best