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Top Network Marketing producer shares What You Need To Know About MLM Compensation Plans. Click the link above for a complementary presentation.


0:22 What EVERYONE is going to tell you that is not necessarily true.
1:17 What you need to ask these people
1:27 Big Red Flag
1:52 Four different types of comp plans

"My company has one of the best mlm compensation plans in the business." Ever hear that? Between you me and the wall, that's what everyone says. There are a lot of things to know about MLM compensation plans and if you're looking at starting your own business, it's important to have a basic understanding of the four major MLM compensation plans that exist in our industry today.

The first is called Unilevel and it's popular because it's super simple to explain to prospects (Direct Sales and Network Marketing companies are notorious for complexity in their comp plans.) The only problem with this type of comp plan is that you don't get paid deep. It encourages you to "go wide" leaving it's distributors/consultants feeling left out in the cold. A good way to think about it is, Width is your paycheck and Depth is you're security. Unilevels don't give this type of flexibility, so it's not so desirable.

The next of the major types of MLM compensation plans, seems to be a response or answer to the Unilevel Plan. It's called Stairstep Breakaway. This plans "brings it" as far as giving the distributors/consultants depth. The question is, how much depth? The big money that everyone gets in the business for, really begins in the 5th level, so a plan that has a 5th and 6th level is going to be really generous and additional levels will bring in only more money.

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It will take time to develop those levels however, so just like any of these plans, you need to find lots of people to talk to so your business can develop to have a robust 5th and 6th level. The "breakaway" part of this plan alludes to the fact that once a team member hits the same rank as their sponsor, they break away into their own line. It may cause some frustration that there seems to be a "penalty" for promoting people to your current level but I assure you, this is a generous model albeit very traditional.

The next of the major MLM compensation plans is called a Matrix plan. The name conjures up a visual a visual for me, it looks like a geometric plate or elevator. Everyone goes up and down together. There's also limits on how many people you can bring in and this type of plan, in my experience, can exhaust someone right out of their business. There's also a bit of sketchiness around it as well. I'd categorically stay away from. They say this plan "fosters non-producers" and is frustrating at best for the people who find themselves in it.

And last but not least of the MLM compensation plans, there's the Binary Plan. Long misunderstood as "all work and no PAY," (lol) many will find that the binary plan has been very well enhanced to make the hard working network marketer make the money they deserve. There's a lot of neat stuff happening with the binary plans and it's exciting to see how well people are doing with this plan.

I would strongly suggest, if you are looking to learn about MLM compensation plans, that you ask someone that you know, that you can trust, to take a peek at the company you are considering. Ask them to give their unbiased opinion. If they are cool, they'll help you out. ; )

Someone who would be great to explain MLM compensation plans to you would ideally have been in a few MLM's before. Or at the very least, they've been at their current company for at least a year or two and have risen at least one to two ranks in their company.

I hope this helps you even if just a little in understanding MLM compensation plans. There's a lot to know, way more than I can share in a short video and quick article. My best advice is to one, find out which of the four MLM compensation plans, your prospective company is using to pay their distributors. Two, take a few hours and research it online. Find out the good the bad and the ugly and then make your decision. MLM compensation plans seem hard to understand at first, but have someone draw you some circles and you'll understand it before you know it.

We all know, that after we've recruited every warm body that we know or are related to, finding qualified people to talk to is probably the most challenging parts of this business (aside from understanding MLM comp plans!)

To get headed in the right direction learning what to do and how to find the best MLM company for you, check out our FREE Video training that will guide YOU to MLM Success.

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The creator of this video may receive financial compensation for actions resulting from this video.

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