MLM compensation plan
When you first take a look at any company’s business presentation, you’ll be shown the compensation plan. There are many different types of plans out there. There are binary plans, matrix plans, unilevel and many more. How are you to know what the best MLM compensation plan is?
I have one rule about MLM compensation plans. I have to understand them. If they are so complex that I have no idea what I’ll be paid or when, then I don’t want anything to do with them. I figure if they are making that difficult to understand, they are probably going to cheat me.
I’m not sure if any company would really cheat me out of money that I had legitimately earned or not. But I won’t take that chance. I need to know what work needs to be done to achieve the levels involved in moving up. I also want to know how my checks will be calculated so I’ll know exactly what to expect.
That’s great to know but, which plan is best?
I always tell people that it doesn’t really matter what the compensation plan is. If you sponsor a bunch of people and they sponsor a bunch of people and you all sell the products, then you’ll make money.
That kind of over simplifies things but, in general, that’s it.
If you look at the top levels of most plans, you will see that the compensation is about the same. There will be some differences but, to me, it’s not enough to make any MLM compensation plan that much more lucrative than any other.
If you have been on my blog before, you have probably noticed that I spend a fair amount of time trying to get people to NOT go into business for themselves. For most people it’s not worth it. Most people in the network marketing industry lose money. Less than 3% make money and fewer than 1 in 7500 people ever reach the top level of any company. Those are not very good odds.
Does it really matter what the compensation plan is if, mostly likely, you will never make any money in that business? I don’t think so.
Does it really matter what the compensation plan is if you happen to be one of those top earners in your company? Probably not.
Should you even look at the MLM compensation plan?
Well, of course. You should join a company that is going to fairly compensate you for the work you do for them. But it shouldn’t be the deciding factor on which company you do sign up with.
What should the deciding factor be?
I think that you should look into the products that the company sells. You need to feel like you can sell them. You don’t have to like them but, it does help. If you are going to sell a bottle of shampoo, you should probably like the way it makes your hair look. If it is a product that you are passionate about, all the better.
The company itself should have a decent track record. What do I mean by that? A lot of people feel that joining when a company is fairly new is the best time to get in. Kind of like getting in on the ground floor. Growing with the company. That does have its advantages. But there are downsides to ground floor opportunities. They may never get off the ground and all your work is for nothing.
You could go as far as to look at the company’s fundamentals. Do they have a lot of cash on hand? The more the better. Do they have a lot of debts? The fewer the better or none is the best. Do they have a history of paying the rank and file members? If not, run!
The main thing that you should be concerned with is not the MLM compensation plan but, who it is that you are joining with. Who is you sponsor? Are they someone who has a good business plan in place. One that has been tested and proven to work? Will they show you what needs to be done and also how to do it?
Although, there are many reasons why people fail at network marketing, I think the number 1 reason is that no one knows what to do or how to do it. No one has a plan.
Rather than worry about the MLM compensation plan is, worry about who will be your sponsor!
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