One of the biggest draws to joining a network marketing, direct sales or MLM company is their comp plan. There are a few different comp plan structures companies use but the usual common denominators are the payments are based on the sales you generate (from customers and your own purchases) and those of your recruits (downline).

The key to finding a company you would consider joining the “team” is finding one with products/programs  and a mission you resonate with.  This will allow you to be passionate about your business and represent it with enthusiasm. Now mix that with a comp plan that will pay you well and BOOM you have a match!

About 98% of the comp plans out there fall under one of these four kinds of plans:

  1. Binary Plan (about 6% of all Direct Marketing companies use this plan)
  2. Breakaway Plan (also known as a Stairstep Plan) (about 62% of all Direct Marketing companies use this plan)
  3. Hybrid Unilevel Plan (about 18% of all Direct Marketing companies use this plan)
  4. Forced Matrix Plan (about 12% of all Direct Marketing companies use this plan)

Quick Overviews:

Binary Plans

  • Will have a structure requirements prior to comp plan kicks into gear
  • You work with two “legs” and you recruit one per leg in your first level (only 2 first level personal recruits allowed)
  • Any other personally sponsored recruits become your second level…and so on
  • You are usually paid out when the two legs equal the designated “pv, points or sales” accumulated
  • Some plans allow you to carry over any unpaid “pv, points, or sales” generated to the next moth

Breakaway Plans:

  • There is NO limit to the amount of personally sponsored recruits on your first level
  • Each recruit on your first level becomes its own leg to build, and any one; every recruit brought to the team by a first level become your second level, third level and so on…
  • Usually you are required to meet a monthly personal or group target in sales or team structure
  • You are rewarded with promotions and higher percentages as you hit targets
  • The members in your downline build their own structures meeting targets, as they grow and build at a point those leaders and those teams will breakaway from your basic structure
  • You usually will generate commissions on a “breakaway” team as long as you stay ahead of them with promotions to higher ranks
  • The more first line recruits you have the stronger your business foundation will be because as one team breaks away with that team leader in your downline when they hit their targets and build you have others to fill in

Hybrid Unilevel Plans

  • This plan also pays out on your “breakaway teams” like the Breakaway Plan
  • You are trained/encouraged to recruit from your customer base sometimes referred to as members or associates
  • Members and Associates receive wholesale buying privileges and can go to the company directly to order for themselves
  • In this plan you usually earn higher payouts on personal recruits than in other types of comp plans

Forced Matrix Plan:

  • There is a limit to the amount of personal  recruits you can have in your “top line”
  • With this structure your personal recruits are one level down so they are on your second level, so the recruits brought in by your personal ones will be on your third line and so on…
  • You downline level can be “capped” and your payout on the depth of them will be capped off
  • If you recruit over your limit become “spill over” and will drop a level in your structure

Compensation plans can be confusing at the least.  Trust me you are not the first person that has felt this way in reviewing all of this information.  The representative you are speaking with should be able to explain the comp plan to you, connect you with their upline or get you the information from the company in documentation form.


    2 replies to "Direct Sales Businesses Compensate YOU!"

    • student loan

      Great, I never knew this, thanks.

    • […] Every network marketing company has a compensation plan for the people who join their “team”. There are different compensation plans out there so be sure when you are researching what opportunity is best for you that the compensation plan also fits! Understand the payouts and the way they are calculated… you can read more on network marketing compensation plans here… […]

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