Multi-level marketing compensation plans consist of the way in which the company compensates or rewards distributors taking into account different aspects. They are the way in which companies introduce their products and services to the market, offering commissions to those who promote them and attract more people to do so. They also allow many people to create their businesses based on it. The main compensation plans are:
- Staggered, earning a commission on personal sales and group sales below until they match in step.
- Stair-step breakaway, similar to the previous one but without depth and width limits.
- Binary, with a width of each level to two fronts, but without steps or levels. You earn the same from all distributors regardless of their level.
- Matrix, the sponsored ones of the first level are limited. Each level offers different commissions.
- Pyramid scheme, in which you have to buy the product to be able to access the business.
- Modified or hybrid compensation plans, using some of each of the above.
Analyze what is the compensation plan that benefits you the most .
To create a business around multilevel marketing, it is necessary not only to choose the multilevel product but also to choose a multilevel company taking into account, among other relevant aspects, the compensation plans that are offered. You have to study them to see which is the one that best adapts to your own characteristics both in the short and in the medium and long term.
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The company that offers these compensation plans thinks very well which one to offer taking into account the effort, work, and time that is invested in the business, the results that are obtained, and they are not created to give money to someone “for nothing.” Each of these compensation plans, including compensation plan calculation software, has its advantages (and drawbacks) with respect to the others, and therefore both parties have to perfectly analyze which one they are using. To choose the ideal plan, you must take into account:
- The way of working to be used
- The referrals that could be obtained
- A sales forecast
- If you are going to buy and use the product yourself
- The pros and cons of each of them
- If the business plan will work in the long term
Many are attracted to the binary plan, and many dare to mention a binary hybrid, but it is not the best for everyone. For this reason, everyone must choose what best suits them. If you want to adapt to a hybrid plan, you have to see that the company is trustworthy and know other people’s figures, thus realizing if it is worth getting into this business or not.
Multi-level marketing has become a very profitable business for a long time for many people, even some of them have seen their standard of living increase considerably, although it is clear that nobody gives anything away and you have to work on it. In addition to the compensation plan, you have to think about the company, the product or service, the current moment, and the team with which you will be working. With good selections and a lot of work, you can earn a lot of money with it.