Understanding a Compensation Plan Basics
What is a Network Marketing MLM Compensation Plan?
If you are looking at a Network Marketing opportunity you are going to be very interested in the compensation plan of that opportunity. Your interest level will be high as the compensation plan is how you are going to get paid! As a responsible entrepreneur, you will want to make sure that you understand how you are going to get paid and that is the purpose of the information contained on this page.
The information will break down the terms and phrases that you will come across when looking at a compensation plan. If you are new to the network marketing industry, this information will allow you to see past the industry jargon and understand what your bottom line will be . . . how you will get paid. If you are a seasoned veteran of the industry, this information is for you to share with your new prospects to leverage your time.
4 Basic Compensation Plans
When looking at Network Marketing companies you will be told they have the newest, latest and most lucrative compensation plan in the industry. While there are some plans that are better than others, all variations aside, it boils down to 4 Basic Types of Compensation Plans. They are as follows:
- Binary Compensation Plan
- Matrix Compensation Plan
- Stair Step Compensation Plan (and which may include a Break-away portion)
- Unilevel Compensation Plan
Understanding these 4 basic compensation plans will allow to you see what is the best compensation plan for you.
How to Understand Compensation Plans
It may be hard to believe that for all the plans that exist in the Network Marketing industry, you can bring them all back to the 4 basic structures listed above. Where you obviously have to put your attention is how will the compensation plan that you are looking at pay you, and that is where understanding what you are looking at becomes most important.
While the compensation plan is how you are ultimately going to get paid by the network marketing company you are going to join, it should not be the only reason why you join the company. It cannot be stressed enough that when you are evaluating a network marketing company, the compensation plan is only one aspect of the opportunity. You need to keep the "big picture" in site and that includes, leadership and support, products, company track record, etc. It has to be the total package and be right for you.
To understand any compensation plan clearly, you will obviously need to understand the jargon that is used when explaining them. While terms may vary slightly, the basic principles of what and how these industry terms are used are very similar. Our goal is simple. Our goal is to explain in easy to understand language the industry terms. Terms such as sponsor, distributors / associates, business center, organization width and depth, organization levels, organization legs, upline, downline, crossline, business volume, commissions and bonuses. Confused yet? Don't be . . . lets get started with explaining all these terms.
More information on Compensation Plans, go to . . . Page 2 >>
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