Network Marketing or MLM

Compensation Plans of every MLM company varies from one to another. Generally, the commission or margin of the distributors depends upon the level accomplished by them in compensation plan structure as well on the overall sales volume.

Distributors of some companies make commission say up to 20% on their own sales as well as somewhat lesser on the sales made by people working under them. Percentage of commission varies for these distributors. Distributors can earn up to 7 % on sales who are recruited at level 1, similarly 5% of sales who are at Level 2.

For E.g. If a person recruited at Level 3 sells good worth $50, then she can earn commission of $10.00 and hence, level 2 distributor i.e. the person under whom she is working can make $3.50 as a commission on her sale. And the distributor at level 1 would earn commission of $2.50. Different rules are set by various MLM companies for the distributors as to the number of levels deep distributors would be getting paid. Some MLM companies number the levels as per the sales volume, and adopt different kinds of procedures based on the sales volume. That is dividing from the parent distributor chain and does operating at the top of the chain

How big a down line can get even the top level distributor gets the commission from his or her down line. These distributors are also responsible for providing training to the down line. Making money in MLM Bretzke, says that long view is important. According to him, it takes a year of working and almost 10 to 15 hours a week in order to earn about $1,000 a month. The residual income, can take 3 to 5 years with concentrated efforts.

Compensation plan

The compensation plan is the system by which you get paid. It helps to let you know volume of sales, you need to do, the criteria for getting bonuses etc. These plans generally have names like stair-step breakaway, unleveled and matrix. Plans that combine one or more elements of basic plan structure are known as “hybrid” plans.

Suitable compensation plan

Eldon Beard distributor of Watkins says that many people in network marketing have a misconception that whatever plan their company is using is the best one. "Some plans are designed to pay a higher percentage. Others are constructed to pay more in the deeper levels

Regardless of the type of plan, the key to remember is that you can make money with all of the legitimate plans.