FAQ on Compensation Plan
Posted on | January 25, 2011 | Comments Off
How do most MLM pay distributors?
Most marketing plan pays distributors’ commissions based on their personal sales volume and their group sales volume (dictated by the level they have achieved in the compensation plan structure).
How deep does MLM companies pay?
Different MLM companies differs on the depth when it comes to calculation of commission. Usually the depth depends on some condition the distributor have to achieve. For example: higher personal sales more depth or the more managers or directors lines that a distributor have will entitle him or her to override greater depth.
What happens to the unearned depth commision when a distributor fails to qualify?
For MLM companies that practice a full payout plan i.e. paying a constant percentage of sales as commission to members, unearned commision from sales deep in the group goes to the uplines who qualify. Therefore the company do not derive any benefits when a particular distributor does not qualify for any depth commision as the commision will go to the uplines.
Why doesn’t everybody make money in MLM?
Everybody can and will make money if they do the basics on MLM : find some customers and later recruits people who also wants to do the business. You can earn money even if you do not have any downlines via selling. Like other businesses, not everybody make the same amount of money. The money earned in MLM is usually proportional to the effort, time, commitment, and planning that goes into building the business.
How important is the marketing plan?
Marketing Plan plays a very vital role in the growth of a MLM company. Needless to say, if the marketing plan does not pay well or the criteria to achieve higher commission is difficult to achieve, then many will the business. In general, most MLM marketing plan today reflects the reality that many does not like selling and hence have lower personal sales compared to their predecessors. Comtempory marketing plans also takes into account that majority of active distributors only sponsor an average of 2 downlines and hence the popularity of binary plans today.
Having said everything, we need to remember that the marketing plan is just one component, albeit an important one, to the overall success of the network marketing company. Other important factors includes products, training and support and management experience.
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