Are You Confused By Network Marketing Compensation Plans?

There seems to be loads of different network marketing compensation plans out there and many appear to be very hard to understand, which is why a lot of newbies become baffled and disappointed when the promised income doesn't materialise. The type of network marketing compensation plans a company offers shouldn't be your first thought. If you are new to the industry you need to check out the product you're promoting as your top priority. This has to be something you can get passionate about, so that you can promote with confidence when you start to generate leads.

The Different Types Of Network Marketing Compensation Plans

Matrix Plan

You usually have a first level of between 2 to 7 and anywhere from 5 to 50 levels deep. So with a 4 x 12 matrix you would have 4 legs on level 1, then 12 down each leg. If people drop out, which is common, your earnings are affected as to what you can achieve.

 
Binary Plan

You need to recruit 2 people to your first level, then from there infinite levels can be created. This can involve more work because you generally get paid from the side with the lowest sales, so you might wait longer for your commission until your lower leg achieves a certain volume.

Unilevel Plan

Consists of unlimited first level width, so you can personally sponsor any amount of distributors at level 1, then create a depth of 5 to 10 levels. With this plan you can predict and control your earnings based on the effort you put in, plus receive bonuses from your downline's efforts.

Breakaway Plan

Basically the same as Unilevel except that once a member of your downline reach's a certain leadership level, they "breakaway" to form their own plan. This is good for encouraging members to sponsor, but means you lose income as they breakaway and someone less qualified replaces them.

Perpetual Leverage Plan

This model is used in many home business opportunities and it rewards all members the same amount at each level, so the downline get the same amount from each of their sales as the guy at the top. The ability to earn a substantial residual income comes from when the people you recruited start to make sales as well, because you get 50% of the commission on offer for each of their sales. So, if you had 10 team members, you would have the income from all their recruited members, plus all the new ones you were bringing on board as well.

The thing to remember when choosing your plan is whether you are up to the task of hitting those levels. How many people do you need to sponsor to get your income going. The Unilevel and Stair-Step Breakaway require you to sponsor large numbers of frontline distributors to earn a good income so you need to be confident of your ability, whereas the Binary Plan needs less sign ups, but more effort put in on training and support to help distributors establish their business.

To sum up, you need to choose a company that provides you with the best opportunity and one that supports you and your distributors each step of the way. Pick a company with a practical business model that has a product you are happy to promote and that others will be attracted to investing in.

For more information on starting a network marketing business, CLICK HERE or check out TimIdle.com for useful start up tips.