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How To Decide On A Compensation Plan Multi-Level-Marketing Business Opportunity


Businesses created by utilizing network marketing principles are founded nearly daily. The huge financial incentives that go along with being successful in a multi-level-marketing business makes this niche extremely competitive. The freedom of a person being able to run their own portion of the business makes it great for self-starters and those motivated by cash. People that are successful at these companies have a lot of endurance as they constantly need to sell and recruit to continually grow. Companies that attract the top talent in these niches have the best payment plans. If you’re going to thrive in one of these position it’s important that you find a company that interests you with a compensation plan that rewards performance.

How To Decide On A Compensation Plan Multi Level Marketing Business Opportunity

Understand Your Strengths

Multi-level-marketing success stories have to do with hard work as building as large of a network as possible is a grind. There are those people that recognize talent that can recruit a small team of expert sellers. Finding people that will continually grow your network is also important depending on the payment structure. If you have a team full of people that grow at a high rate but don’t sell you want to make sure that you’re paid fairly for what you have given the company.

A company that provides great training should also be a target as they can help provide strategies to help succeed. This doesn’t mean that you can’t train yourself but opt for a company that cares about those that are networking and selling for them. MLM opportunity compensation plans can be difficult to understand at points so drawing it out makes it far easier to visualize.

Ask The Tough Questions To Get Real Answers

The best thing that can be done is to ask as many questions as you can about the compensation system. Also don’t skim the paperwork on this as one sentence can impact your income by thousands of dollars if you’re a high earner. Writing out the pros and cons of each compensation plan can allow you to pick the company that will pay you the best for your work and compensates in a way that compliments your skills in multi-level marketing.


This is by far the most simple payment plan which is easily grasped by new recruits to a multi-level marketing company. A lot of the time people are weary to get into a company like this due to a complex payment structure that doesn’t make a lot of sense. You’re paid through what you can sell as well as what the people that you recruit can sell. This usually goes 5 to 8 levels down so creating a great base at the top of your organization will yield huge results. Seeking reliable sellers as well as recruiters is paramount as these people can allow you to earn a large sum of money in a passive manner. The drawback is that the income is limited to a certain number of levels which can lead people to stop putting in hard work and only work part-time. This structure is perfect for a great seller or recruiter that wants to earn without having to put in large amounts of hours.


This means that a salesperson can finally breakaway from their original recruiter and pay far less in fees. This compensation system is attractive to those that want to work full-time to build their front line of sellers and recruiters. The more breakaway organizations and those selling at your first level the better with this payment structure. Organizations utilize this type of structure as it is a great motivator to finally breakaway and start earning more per sale and their recruits. This impacts teamwork negatively though as many people don’t want a person to breakaway as this will impact their income in a negative manner.  


A forced matrix is a payment structure where both the width and depth of your organization is limited. This not only limits income but stresses quality of those individuals that are involved in your matrix. Bonuses have been used to motivate those who have a full matrix yet continue to increase their sales. For those that want unlimited income and want to grow a team of hundreds or thousands should avoid working for a company with this payment structure. High percentage of commission is the only draw for people that otherwise would thrive and earn more in other compensation plans.


Binary payment plans have unlimited depth but limited width. This is perfect for a person that has a few incredible sellers below them as well as an eye for talent as the number of recruits is limited so it is important to recruit only the best. For those people that get great sellers under them this can be a huge income boost. This payment structure makes it imperative to train recruits to the best of your ability as having two or three high earners with them recruiting great sellers can create a great base income. The disadvantage of this payment structure is that the leg of the two binary legs that produces the most money goes to the company while you earn off of the earnings of the less profitable leg.

Those that have mastered the game in MLM or multi-level-marketing understand that payment structure is imperative to analyze alongside your skills. Understanding your skillset is also important as a person that trains incredibly might have a completely different payment plan benefit them from a person that stresses recruiting quantity over quality. MLM can be extremely profitable and offer a sense of passive income when earning from those who are running their own teams. Startups can benefit from these types of compensation plans as well as it is a scalable way to increase sales as well as brand exposure. Multi-level-marketing works and is profitable which is the reason so many companies utilize this strategy to grow!


Ram Kumar blogs at DeviceBowl. He is a graduate in Computer Science and Engineering. Addicted to Blogging and Coding.

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