Why The Best MLM Compensation Approach May Not Be The Best!

Plenty of companies create a big deal about claiming to really have the best MLM compensation plan... BUT What's the idea of a fantastic compensation plan if the merchandise is naff and no-one wants it? Or if the most generous, powerful compensation plan pays out so much that the business cannot sustain it? Picking a Network Marketing business opportunity on the cornerstone of its pay plan is putting the cart ahead of the horse.

You will simply be paid if the merchandise moves and you can only earn residual income in the future if the business has longterm stability. Those are more important criteria. The compensation plan is sold with the business you decide on and is just the icing on the cake.

The Simpler The Better

Some companies seem to delight in the sophisticated, and design complicated unique compensation plans that you'll need a Harvard degree to decipher.

They're designed by compensation plan consultants for MLM professionals and believe that you already know just most of the jargon they choose, like "matching bonuses" and "carry-over volumes"...

Network Marketing is a simple business and must be accessible to everyone. In the event that you can't understand the program then steer clear of it. It might be a brilliant compensation plan, the best MLM compensation plan there is in that's pays out significantly more than some other, but if you don't realize it how can it motivate you.

How can you set your goals if you don't know what you have to attain?

Getting Over The Hump!

A lot of people, perhaps 95% historically, who join an MLM company drop out or become inactive by the end of 3 months. This shows the need for the merchandise to supply value so that individuals will keep on buying it for its sake. Not only because of the business. Distributors are customers too!

Most plans today will place customers on the business database and ask them to dealing directly with the company. As a registered customer you then get a reduced price.

Which makes life easier if you are distributor because most of the admin is done for you, but it means that you don't create a retail profit. In turn meaning there is little opportunity to make quick money. Instead you've to go about patiently building a continuing income from the downline.

But a brand new distributor needs some opportunity for rewards. The best MLM compensation plan can pay you a high percentage commission on the initial order of someone you enrol, in addition to in your first couple of levels.

With an agenda that's not got a retail profit element it is particularly important to take a long term view on the business.

What Do You Need To Qualify?

Go through the minimum qualifying volume to earn a continuing income. Can it be an amount that you and your household can sustain?

The minimum volume needs to be consumable in a month or else your garage will quickly fill up with stock - the bane of the MLM industry!

You may find that the "volume" is calculated on a points system rather than the monetary value and that 1 point does not necessarily equal $1.

This is done to equalise the profit made on different products. A product that's expensive to produce compared to some other product with the same sales price might be have fewer product volume points. Commissions paid to distributors on that product are then lower.

For companies operating internationally this points system provides a standard measure across most of the countries to calculate commissions on. The business then avoids risk of fluctuating currencies.

Other Factors to Consider

How many levels deep does the program pay? The more levels you drop the more people there will be on each level, so an agenda that pays more levels deep can pay well. BUT, you really need to get there and be around good enough to obtain the depth in your downline.

Is there "Spillover"? Some plan enrage building deep and as a result you might get spillover where someone above you places someone they sponsor under you source link.

Treat that as a good bonus!

The best MLM Compensation Plan will reward distributors who produce results. You will most likely find that you might want to qualify for payouts on the cornerstone of your efforts to earn decent money. Nowadays it is very rare to manage to have a really passive residual income.

Regardless of the plan, a sponsor shouldn't compete by having an enrolee but must do everything inside their power to greatly help the enrolee grow their business.

That can help the sponsor's own business too....

The best MLM Compensation plan will reward the best behaviour and not be over-complicated. Network Marketing is a simple but powerful business. It really needs to be properly explained.